A recent Wall Street Journal article focuses on a potential positive in what is otherwise described as “grim statistics” for family businesses. The statistics: Only 30% of family businesses survive into the second generation; 11% survive into the third generation and 3% beyond that. Use of words like “grim” and “only” connote a terrible fate for the families of businesses that do not “survive”. However, selling the business can be the best path for many families. And, as noted in the WSJ article, now is a good time for families to consider selling. (more…)
-
Are family businesses different?
Are family businesses different?
I recently had the opportunity to sit down with a co-founder of a small, entrepreneurial company and learn about his experiences. The company was formed in 1998 and saw quick, continued growth that was only slightly curtailed by the downturn in 2008-09. Now, he and his partners are facing challenges as transitions and growth bring in a new, younger group of managers. Hearing this founder’s story, I was struck by how much his company’s path had in common with a family-owned business as well as what was different. Here is a short checklist (more…)
Communication: What Reddit’s story has to tell all businesses.
It’s been a busy month for Reddit. July has included a major shutdowns, the loss of a CEO and the return of a co-founder who quickly cracked down on errant users. It’s a storyline that could inspire TV soap opera writers!
In reality, there are two, overlapping stories which offer valuable lessons in communication for all managers. (more…)
-
Planning: Don’t put off until tomorrow.
Planning: Don’t put off until tomorrow.
Do you know a business owner with a good idea for expanding their business but they “don’t have the time” to plan out let alone implement the idea? This is the reason a client engaged my services. His idea was a good one: A natural extension of his market with little competition. The owner just never took the time to create an implementation plan in the two years since conceiving the idea. Then the recession hit and the business’ lack of diversification almost put him out of business.
So what was my client (or any of us) waiting for? (more…)
-
Succession Planning = Business Planning
Succession Planning = Business Planning
Business planning is an integral part of the Succession Planning process. I was reminded of this when I read about a local lumber supply company closing its doors after 155 years of service. Curious if this was now a common phenomenon for retail lumber yards, a quick internet search revealed five closing announcements since February. All of them were family owned and, on average, been in business for 90+ years. One common theme for these closing was competition from big-box national chains.
This is where a good Succession Plan comes into play. (more…)
-
Governance Policies: A Family Constitution
Governance Policies: A Family Constitution
Imagine our country without a Constitution. Our founding fathers had the foresight to codify a basic framework of beliefs and laws in the form of the Constitution of the United States. Our Constitution continues to provide structure and unite us even in these times.
Every family owned business should take inspiration (more…)
-
Overcoming Barriers to Succession Planning
Overcoming Barriers to Succession Planning
Family businesses are on the threshold of a historic transition. As of a 2007 study, the median age of top executives in family businesses was 50 years old and 40% of them expected to retire by 2017. Baby Boomer owners are relinquishing the reins of their companies.
So you would expect businesses everywhere to have succession plans in place or to be deep into the planning process. Yet, (more…)
Succession Planning Done Right: Disney Style
People flock to Disney films for the entertaining comedy and drama. The process for picking Disney next CEO seems downright boring in comparison! And that’s the way it should be.
Based on the New York Times’ (NYT) article Disney Tackles Succession, This Time Without Drama, Disney’s current CEO Robert Igor appears to be addressing the planning process for his succession with abundant prudence and foresight. The article reports (more…)
-
Business Longevity Insurance (Part 2)
Business Longevity Insurance (Part 2)
In a previous blog, I pointed out how Succession Plans are insurance for when the unexpected results in the business owner’s absence. The most common response to this I hear from business owners is: “Yes, but that’s not likely to happen to me.” While that may or may not be true, owners also need to ask themselves: “Can my business and my family afford the consequences if the unexpected happens?” Others’ experiences and the research provide a clear answer. (more…)
-
Miles Davis’ Lessons on Leadership
Miles Davis’ Lessons on Leadership
Miles Davis’ cantankerous personality is legendary. That is why I was pleasantly surprised to hear what his drummer, Jimmy Cobb, had to say about Miles’ leadership style. Mr. Cobb, the only surviving member of the sextet that created the groundbreaking Kind of Blue, was interviewed about the making of this album on BBC’s Witness. Here are some of the lessons from Mile’s leadership style that I gleaned from this interview. (more…)