When I think about high-achieving businesses in Acadiana, I often see a powerful and steadfast family behind the scenes. Acadian has the Zuschlags, KTC Telecom has the Turnleys, and families like the Franks, Godchauxs, Patouts, Heberts, Broussards, and plenty more, consistently deliver quality services and community participation generation after generation. As outsiders we see the bonds of family bring companies to high levels of success, but rarely see the work it takes to translate those bonds into business achievement.
Recent research suggests that family-owned companies are more resilient over time. And in uncertain times, sustainability is key. Vermilion is lucky to have a foundation of family values coursing throughout the business community, but what does it take to find “success” in succession? What are the steps to ensure that a business can transition from one team to the next without upsetting the fundamentals, culture, and business plan?
Long-term planning – The beauty of well-functioning family-owned businesses is that the management is usually thinking beyond their own tenure. They focus on the next 15 to 20 years as much as the next five. Their personal legacy is important to them, but so is the success of their brand when they are no longer handling the day-to-day operations. Work with existing leadership and the next generation family members to craft goals. Including multiple generations not only creates the buy-in needed to carry out long range objectives, but will also yield different perspectives, more discussion, and ultimately a better product. The responsibilities can be shared by all parties, ensuring a “job” for even retired family members – even if it’s just counsel and visioning.
Establish a chain of command – Handing over the reins is difficult, and even more so if there’s no agreement on who is in charge of what. Identify the successors and put everything in writing. Who will manage versus who will own. This keeps the family unit and business structure intact and ensures everyone is “singing from the same sheet of music”. Be sure to consider taxes and penalties that can come with transferring ownership of a business and related properties. It’s important to hire an experienced professional that can not only ensure the most cost-effective way to transition your business, but can also serve as an impartial third party mediator.
Outside opinions matter – In addition to hiring a mediator to assist with a takeover, make sure you have non-family members in the fold at all levels of the operation. Families are great because they carry forward many of the same ideas, but too many “yes men” in the room can stagnate even the best of businesses. Establish trust with key outsiders from the top to the bottom of the organization to vet ideas and come up with new, out-of-the-family-box thinking to boost what you already have in place.
Empower the next generation – Instincts may tell us to snatch up that daughter or nephew fresh out of college, but there’s something to be said for real world experience. Encourage future generations to pursue their educational and career goals while talking about options in the family business. Give them the opportunity to be an apprentice, intern, or part-time worker to see if the company’s culture is a good fit. Blood may be thicker than water, but that doesn’t always translate to the workplace. The relationship should be mutually beneficial. Pay a fair and appropriate wage for prospective successors. Apply the same industry logic when hiring, establishing compensation, and meeting expectations. At the end of the day, employees are employees. If they’re not helping you reach your goals, they may not be the best fit.
Be an open book – Your business’ ability to carry out a successful succession plan ultimately depends on openness. Effective, consistent communication can eliminate the anxiety-riddled decisions that must be made. Establish a regimen – conference calls, staff meetings, retreats, (and even family vacations), can keep the lines of communication open between all parties.
Henry Ford – the founder of arguably the most famous American, family-owned dynasty – said it best, “Coming together is a beginning, staying together is progress, and working together is success.”
If you need assistance with your family-run business, let us know and we’ll be happy to help. Call (337) 740-0433 or visit our website at www.developvermilion.org for resources and instructions on setting up an appointment.