Integrating Multiple Generations in the Family Business

Family businesses are a huge factor in the U.S. economy, contributing an estimated 57 percent to the nations gross domestic product with 35 percent being Fortune 500 companies. Thats the good news. The bad news is that only 30 percent of family businesses survive into the second generation.

Clearly, theres a lot to gain by getting it right, and while the factors that result in failure may be varied (such as lack of innovation or poor financial management) its often plain old family dynamics that get in the way, especially when it comes to bringing in the next generation.

Here are a few keys to success for navigating the tricky landscape when the next generation comes knocking at the door.

Check Intentions. Some of the best advice my mother gave me when I was considering coming into the business she started was to be open to saying no. It wasnt that she didnt want me in the business. It was that she wanted to ensure for both of us that I was joining the business for the right reasons. That I had my own personal passion for the work and wasnt blindly following her lead or opting for what may be deemed initially as the easier path (which is laughable to me now!).

1. If a family member comes to you with an interest in joining the business, I recommend asking them to take a step back and thoroughly and honestly evaluate their motives. Ask that they become crystal clear on what is driving their desire to join the family business, and then report back to you. There is a big difference between wanting to carry on a tradition for traditions sake, and wanting to do so because there is a real passion for it. As with any business, you dont want anyone there as a default. You want them there because theres no place theyd rather be.
2. Manage Expectations. Each person will likely come into the business with a fantasy of how things will operate, including how decisions are made and what impact theyll have on the organization. Unfortunately, much of it will have nothing to do with reality. Before you end up in a nightmare scenario of confusion and resentment, sit down and have a candid conversation to clearly outline mutual expectations that expand well beyond the basic job description. Clearly define levels of decision-making in each core area and identify any sacred cows within the organization that, in the past, have been untouchable. Then, challenge yourself to open access to those areas. Many family businesses fail because they are unable or unwilling to move beyond the founders vision. Ongoing success requires change and the recognition that the next generation can be the best catalyst for it.
3. Respect Generational Differences. This issue may appear insignificant given our tendency to either downplay our differences or assume the other will come around to our way of working or thinking. Yet it is the one area that nearly caused my working relationship with my mother to implode. Seriously.

   I was on maternity leave and, as a typical Gen Xer, had a hard and fast rule that I was off limits to work unless there was an emergency. On the other hand, my mom wanted to have a conversation with me around an issue important to her and, as a typical Baby Boomer, was offended when I didnt respond. Neither one of us was right in our actions that wasnt the point. Instead, we were both completely dug into our positions, which then turned into a metaphorical game of Chicken that nearly cost us everything. When we finally realized what was underneath all of the noise our core values at odds with each other I think we both felt a bit silly. What was obvious now wasnt so obvious then.

5. When you have an issue come up where each party seems immovable, step back, get curious, and investigate. More than likely, youll find its a generational difference that can provide an opportunity to understand each others perspectives and set new framework while deepening the relationship on both a personal and professional level.

Halley Bock is the CEO of Seattle-based Fierce, Inc., a leadership and development training company that drives results for businesses by developing conversation as a skill.