There is no smooth path to becoming a CEO, much less taking over and transforming a longstanding family business to compete in the 21st century. As I took the reins of my second-generation multimillion-dollar business from my mother and father, and partnered with my brother, I realized the importance of striking a balance between my family life and my professional life, because family businesses can be fantastic and yet, very messy.
If you’re stepping into the family business, congratulations. I have some good advice for you—that I wish someone told me—that will help you succeed and prepare you for the challenges of taking over your family business.
3 Things to Consider When Taking Over Your Family Business
1. Get Ready to Not Know Everything
Even though you may have grown up in and around the family business, you likely still need to brush up on specific skill sets. I personally have three degrees, in accounting, law, and gerontology, which provide me with the expertise to grow and expand the business sustainably. Even with all that education, the most important thing I had to do was embrace our family business’ objectives and make sure that my education was aligned with what the business required of me.
I rely on key experts within the company to complement my training and education—and hire well. I know what I am good at—and I know what each of the employees is good at, too. I know where to turn when I need expertise. Do not connect only with managers, but those at the front lines of service to make sure you are getting an accurate view of the company from all angles.
Studies show family business successions tend to be more successful because there is more support in place to give incoming leaders assurance and resources. However, 70 percent of these businesses fail to last beyond one generation due to a disconnect between incoming leaders and their employees.
To avoid becoming a statistic, shadow as many positions as possible to gain insight into your employee’s workflow. Get involved and connect with the employees to garner their support and trust. By meeting with staff and involving them in the transition, instead of maintaining business as-usual, you may be able to refine their workflow as well as identify untapped skills that can provide business value. Build empathy for your employees’ concerns. Letting others have their say also mitigates potential turnover and other losses to your bottom line.
You are the new generation and you can make the changes to improve your business so it can continue to grow and excel.
2. Treat Employees Like You Treat Your Family
From handwritten notes to simply remembering an employee’s names, the personal touch will ensure that your company’s values are always realized in every aspect of its operations. My mother Darnelle taught me the importance of treating employees like family early on—and this is especially true when family runs the business. As former head nurse, she built bridges between residents and staff and made sure they all felt heard and valued.
The most fundamental value of any family is that everyone feels appreciated. We are extremely supportive of employees who may need time to regroup in order to bring their best selves to work. Burnout is a problem across many industries, but in the field of caregiving it’s particularly important to ensure that employees have the energy to adequately care for residents. I have learned that by treating employees like family, it’s very easy to want to provide them the very best care and support—and they seem to like working with our company, as a result.
In addition to a generous benefits program, it’s crucial to have frequent and open communication with staff. It’s important to do regular informal check-in with employees between formal meeting times, if possible. Even if you can’t be everywhere at once, staff understand it’s not for lack of caring. This trust in their workplace allows the team is assured they are valued.
3. Mastering the Hand-Off
As an incoming leader it is important to acknowledge those who’ve paved the way. Reach out to decision-makers across all departments and offer to have them serve as your mentor. In addition to showing you the ropes, ensure that managers are empowered to give you constructive feedback. This secures their support over the long term and reassures them the change in leadership doesn’t threaten their livelihoods or alter company values.
To avoid misunderstandings among family members, host transitional conversations on neutral ground. Going on a family retreat, free from distractions, can be a good way to make sure everyone is comfortable voicing their suggestions on the direction for the business. By having a direct say in succession-planning, family members will be likely to support your decisions down the road.
It is important to create allies early on and weed out those who may hinder growth and development. It’s not always easy but having honest conversations earlier on prevents damage to your long-term relationships as well as business functions. Encourage them to become involved in activities that do not immediately affect your bottom line or outside philanthropic and community initiatives. You also need to gently but firmly restructure any stake they hold in the business to reflect the move forward.
Successions are not only a great way to enhance your organizational structure, but also an opportunity to meet with employees at the front lines of services. Take time to gauge individual goals and target growth areas that may not have been apparent to the previous leadership.
Putting It All Together
As you assume your new role, keep in mind your job is to not only achieve success for your organization, but to cultivate the next generation. Family businesses are often entrenched in the local community, so reach out to leaders in nearby business organizations as well as supportive peers to help your transition go smoothly.
Immerse yourself in business operations and the organizational culture as soon as possible. Make sure to empower managers and key-decision makers to ensure a smooth transition. Finally, make sure that all family members are on board in terms of your objectives for the firm and boundaries in terms of communication and management style. A successful succession maintains the integrity of your family’s legacy, maintains employee morale, and most importantly, prepares your company for its next phase of growth.
It is one thing to grow up in the family business and another to be truly qualified to take the reins. Whether you are a mom-and-pop shop or an emerging leader in a given field, it’s important to have a deep understanding of your business objectives as well as demonstrated skill in navigating your organization’s culture. Taking over your family business may be a daunting task, but establishing clear objectives early on—from onboarding to team-building—can save you huge expense and relationships in the long run.
About the author: Lauren Zimmerman-Cook is Chief Executive Officer of AEC Living, a second-generation family-owned group of independently operated senior living communities, a home health agency and a Medicare-approved rehabilitation agency.