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Articles - Successful Management Techniques in the Family - Business

Should your children leave the nest - and business - behind?

Friday, April 12, 2002




By Kathy J. Marshack, Ph.D., P.S.


Every parent faces the day when their children are no longer children. They must make their way in the world as adults. Some are off to college, others to travel, others the military, and many straight off to work. Whatever their direction, they are no longer kids. We may think they still need guidance, but they will move into adulthood without looking back. If we haven't prepared them for this move by now, the parents in their lives have little to say anymore about the life paths they will choose.

In a family-owned business, preparing children for entering into adult life is different in some ways than for other families. In addition to teaching life skills, parents assist their children to integrate independence and confidence. They are preparing their children to fly freely and strongly when they leave the nest.

But in a family business the assumption may be that the child will stay in the nest; that they are being groomed to take over the family business when the parents retire. There is an inherent conflict in grooming your child for independence and yet holding that independence in suspension until the parents retire from the business.

Family business owners, who wish to groom their children to succeed them in managing the business, need to work with this inherent conflict. Too often the mistake is made that the child is never fully prepared for leadership and thus they remain a child indefinitely (much like Prince Charles). Another mistake is to assume that the child will take over the business when they are not interested nor inclined to so.

Preparing children for taking over the family business requires that parents selflessly attend to preparing their children for healthy independent adulthood first. A child who has grown into a self-sufficient, wise and autonomous individual is in a much better position to assume the role of leader. A child who remains subordinate to the parent into his or her 40s can hardly be practiced at autonomy or leadership.

Therefore, parents with family businesses who plan ahead for succession require a more thoughtful approach to emancipating their children. Having young children work in the family enterprise teaches them skills they could not learn otherwise. They not only become familiar with the product and style of the business, but they acquire confidence. They are participating in taking care of the family - an important value to instill.

As children get older they can be given more responsibility, even management duties. However, their progress up the ladder should not be based upon the fact that they are the son or daughter of the owner. They need to be evaluated, as would any other employee. This teaches the child to do the hard work of improving themselves.

There comes a point in adolescence when a decision needs to be made about whether a particular child is leadership material. If so, a new path must be developed for this child. It is impossible for the child to become a leader and continue to work under their parents. They need a period of proving themselves in the world, apart from their parent's protection. If they have never worked for anyone other than their parents, how can they or you be sure that they really can handle decision-making alone?

Parents are often very reluctant to let their children leave the nest. In a family-owned firm this reluctance is extremely strong. The business has evolved as a reflection of the family identity. It almost seems as if the family or business is breaking up if a family member leaves. But for the health of the child, the family and the business, children must leave and discover their own talents.

Family firms who have handled this transition gracefully, have encouraged their children to leave home and work elsewhere for a period of years. If after this time the child is ready to return to the family enterprise, and there is a suitable position for the child, then the match can be made.

The risk, of course, is that once out of the nest the child will never return, that they will find another life that suits them better than working in the family business. But then isn't that what parenting is about? The business will be much more successful being managed by strong capable leaders who want to be there and by a leader who has proven his or her talent in more than one arena.

It is important for families in business to be open about their planning for business succession. Children should be advised early about who is being considered for leadership. But there should also be flexibility about this decision. Over time another child may prove to be the better successor. Or perhaps the chosen one chooses another direction.

If parents keep in mind that their job is to raise healthy autonomous children, then they are a success no matter which direction their child chooses. Whether the child chooses to return to the family business or not, they can always be a contributing member of the family.