The evolution of every business includes times when the mantle of leadership passes from one person to another. The shift of ownership or leadership can create anxiety in an organization, pull the team off focus and cause performance issues in the business. It is important for any move in leadership to build on what has been the core of the business and promote a clear direction moving forward. If the team sees and feels a lack of continuity or a lack of direction in the transition they will lose focus on what is important and create additional problems at a time that will already be stressful for the entire organization.
Providing leadership in and through a transition of ownership or leadership is more important than day-to-day leadership.
Through a transition, people need day-to-day leadership but they also need to understand 3 main questions during the transition:
What is changing?
What is staying the same?
What does this mean to me personally?
Creating a very clear and detailed plan that starts at the board or ownership level and before any announcements of a change being made is clear. The organization needs to see the change as a positive one and that it is not an ending but a beginning for the organization.
The dynamics of a family business are similar to other business structures as they have all of the same pressures of transacting with suppliers, customers, and employees. The family business structure is also completely different bringing with it several positive attributes and also some negative ones. A family business deals with the overlay of personal interactions, emotions, roles, and responsibilities that are different outside of the business.
A family business needs to understand, set, and enforce positive boundaries that overlap the business and family and define roles for the people who are members of both groups. When the controlling interest of a business is one or more generations of a family there are important positions that need to be addressed:
Family members working in and having ownership of the business.
Family members working in but not having ownership of the business.
Family members not working in the business but have ownership.
Family members not working in the business and do not have ownership.
Owning and operating a family business can be a positive experience when proper boundaries, operations, and logistics are discussed, documented, and enforced in the business and family.
Taking a proactive stance on the oversight of both entities will provide a higher degree of certainty that both will continue to grow and prosper.
Sofus Group can help your family business establish operating guidelines, set up family and business governance policies, and give guidance into healthy boundaries for all of the categories of family and business members.
The Sofus Group can show you how to develop a plan to make any transition of ownership, leadership, or overall direction a benefit to your team and provide a smooth transition for everyone involved.
Contact us about transition planning today to discuss the timeline, communications, and specifics of your company.