This discussion is a great reminder that what’s good for companies in general is also good for family businesses! Too often, family businesses tend to have the view that catering to what’s best or most convenient for the family is an acceptable priority (and sometimes, the main priority!). In our highly competitive, rapidly evolving, technology fueled world, this approach can be particularly dangerous. Consider the following realities:
- Consumers favour flexibility and convenience, in terms of how they procure goods and services. With a world of options at their fingertips, consumers have never had more choices, and companies that do not perform well or fail to meet expectations are quickly replaced by more savvy competitors. Getting a customer back once they have been lost is difficult, if not impossible, in many cases.
- An abundance of things that used to be done “manually” are now driven by technology, think shopping, logistics, communications, manufacturing, and even depositing a cheque. Companies who have not kept up with the technologies that impact their industry or have failed to invest in these areas are unlikely to have a future (they barely have a “present”). Family business leaders who consider succession to be as simple as handing over the keys to the next generation need to think again.
- A well managed company leads to good outcomes, including financial performance, customer loyalty, and longterm employees; these are some of the building blocks of establishing a brand. When a company is guided by what is most convenient for itself, shuns the systems and processes that generate good performance, and fails to seek advice to bring valuable perspective and expertise, it is not in a position to establish a brand presence that represents meaningful value to a potential successor or acquirer down the road.
Think about what this means. When family businesses fail to operate in a manner that is based on fundamental business practices and the needs of the marketplace, they put the future of everyone involved at risk; this reality has never been more true. Business leaders must take action, now, to ensure viability over the longterm, to the benefit of the company and the family (and those in the Baby Boomer generation, who have led companies for a while and are now facing retirement are a particularly important group, when it comes to succession considerations).
Get started by reading Defusing the Family Business Time Bomb, helping business leaders face the most explosive challenge in a generation. Your business and your family’s wealth generation should have a future, right?