Helping Family Businesses
Prosper Across Generations®


Succession: Whose Turn Is It?

Dear Advisor:

The ownership of our family’s garden center operation is split evenly among two branches of the family. My aunt (with half the stock) and her two sons are employed here, as are my father, my brother, and I. Dad is 75 and CEO/chairman. My aunt is almost 20 years younger than Dad, but is only three years older than I am. The result is a more-than-20-year spread in our third generation. Aunt Bee (not her real name) is a nice person, as are her two kids who work here. However, none of them have anywhere near the skills needed to run our business (seven locations in two states). It is worrisome to my brother and me that our dad intends to work until he dies and then probably pass the reins to our aunt—not because she is best suited to run the company but because it is “her turn.” I can’t imagine working for Aunt Bee, and I don’t want to see the value of our family’s three-generation-old business driven into the ground.

It would be appropriate for you, your aunt, your cousins, and your brother to be clear about one another’s expectations of the company, your capital, and your family. Before considering who will be your father’s management successor, we suggest a frank dialogue around the purpose of your continued ownership. Is it to grow the company such that it will be able to support another generation beyond you and your cousins? How big will the company need to become to support that vision? What are the strategic initiatives that will most need to be implemented to make that vision a reality?

We find more and more families are holding family meetings to clarify the benefits of, and vision for, future shared ownership of the business by the family. In addition, we are seeing family firms increasingly appreciate the utility of a well-functioning board of directors, one that is truly capable of evaluating the company’s top managers and that is actively involved in making the tough call of selecting the most appropriate person to run the company.

Many families understandably avoid having difficult conversations, and in the spirit of frankness, we wonder what you and your brother thought would ultimately happen with succession and whether this was a conversation the family should have had before so many became employees. Many families who are anxious about succession feel that way as a result of the conversations they haven’t had and because of the questions that have not been discussed and addressed openly and in a businesslike manner. There are experts—here at FBCG and elsewhere—who can professionally and safely facilitate those conversations. Alternatively, there are many books available on our Web site that address matters of family meetings, succession, and governance—and these may be a good place to start.

It is unlikely that your father will cause a family feud over this issue. He may purposely avoid the conversation, if only to preserve the family peace. We find most business leaders in their 70s are unlikely to change—and, in truth, maybe at 75 your dad has earned the right to some peace. It will likely default to members of your generation to show the unity and passion needed to put the hard questions on the table with a commitment to do so in ways that protect both your family and the family enterprise.





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