Home » The Family Business: Will the Second Generation ‘Earn and Learn’ Their Way to Ownership?

The Family Business: Will the Second Generation ‘Earn and Learn’ Their Way to Ownership?

Source: BryansBizBlog.com

You own and operate your family business and now you have an adult-age child who wants to join the family business.

• What are their skills?
• Where do you start them?
• How do they develop and grow within the business?
• How will this impact the morale of the other employees?
• Will they have to prove their abilities to advance and take over the company, or is it a given they will own the business eventually?

Enough questions yet?

Family businesses have historically been the backbone of every country’s economy. As businesses have grown in complexity, the economy has become global and as young people have more opportunities on a global scale, the business development of a family business has also grown in complexity. No longer should any first generation family business owner assume their adult-age child has the desires or the skills to join the family enterprise successfully. Nor should any adult-age child assume they will be ‘handed the business’ eventually and they simply have to out-live dad and mom to secure leadership of the business.

When a family enterprise is anticipating the entry of an adult child or grandchild into the business there are many questions that must be asked and answered, even when those answers may be difficult. A realistic understanding of the child/grandchild’s interests and skills is the beginning point of any discussion. I make this statement bluntly because upon entry into the business, every employee will be watching very closely. Will this second/third generation family member be an ‘entitled employee’ who has little if any accountability for their contribution to the success of the business? The skills and skill development of this newest family member must demonstrate, if not initially, then over time, that they are serious about “learning and earning” their way into the eventual ownership of the business.

There is a great deal of work that must be done prior to and during the emersion of a new generation family member entering into the business. If the work is done well, the transition can be extraordinarily successful and establish a blueprint for bringing additional family members into the business in the future.

Weekly postings on management and organizational issues for both businesses and non-profits from Bryan Nelson of Vista Management Solutions.

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