Succession, which has never been easy for families, is getting tougher. Today, greater longevity means many patriarchs stay in power much longer, forcing a whole generation of family members into other pursuits.
“Kids” these days don’t want to wait until they’re 50 plus to take charge. By that time, they have usually found their own passion or are weakened by waiting in the wings, so to speak.
This is an enormous threat to the ability of the company to survive and thrive when the next generation do finally pick up the reins. Cracks in the family happiness are often showing too. There is nothing sadder than seeing a family where Dad has not given a clear line of succession and worked hard to pass over the real decision making and leadership before son or daughter reaches middle age.
At the same time, too many patriarchs adhere to the age-old practice of passing the reins to progeny, regardless of talent. That tradition brought acceptable odds of success in less competitive eras. One way to allow the next generation to remain in the business is to bring in 30% private equity partners who understand how to accommodate family business dynamics but make sure there is an excellent COO to run the show. I have seen some talented managers work well within the family business environment, respecting the family business ownership structure as well as drawing on the private equity skills.
Jacoliine Loewen, family business expert recommends: