Business Succession Issues Changing with the Times

 

 

 

Reprinted with permission of The Capital-Journal

 

I received a letter the other day from a family business owner struggling with a question I think many business owners/fathers struggle with today. He asked, "As the first-born male child. I became the successor of my father's fast-paced family business. With the help of capable and hard-working employees I have managed to make the business very profitable. "My 30-year-old son and my 26-year-old daughter both work in the business and seem to enjoy it. The other night my daughter point blank asked me if I intended to appoint her brother my successor or if l would allow her to compete for the position. She wants to know where I stand on this issue so she can better plan for her future. I hedged my response, telling her I needed some time to think.

 

 

"To be honest, my daughter shows more professional promise and motivation than her brother. However, he is my only male child and if he wants the business it seems only right that I should pass it on to him. Besides, someday my daughter might get married and then where would the business be? I’m confused.”

 

I responded as follows:

 

 

One thing is very clear to me. You are in danger of making a crucial decision about who should lead your business in the future based on gender, obligation and guilt rather than previous performance, competence and motivation. When you were growing up, primogeniture was the socially accepted approach to succession planning. The domain of work belonged solely to men. Thus, very few women entertained the thought of being involved in business and even fewer were allowed to do it. Women provided the support and bedside counsel to their husbands, who ran the show.

 

 

Things have changed. Today women represent 45 percent of the work force, a proportion expected to rise to 47 percent by the year 2000. Women are more empowered today than ever before and they experience greater autonomy. Your daughter, for example, is 26 years old, unmarried, which was extremely unusual a generation ago but quite typical of today's woman. Women are waiting longer to marry and delaying or choosing not to have children. Because of the slower population growth and labor force shrinkage, businesses need women today. Men cannot fill all the jobs businesses create each year. As a father and man of your generation, you may not like or feel comfortable with the changes, but they are here to stay.

 

Businesses need the talent women bring and most women enjoy the autonomy, power and self-respect that working brings them. Most women, just like most men, want to enjoy both the world of work and the world of family. They find, as do many men, that focusing only on career is too isolating and focusing only on family deprives them of the rewards of mastery and self-fulfillment they want. Your daughter wants the fun of competing for and winning the top job. She seems like an intelligent, assertive young woman who is career focused, competent and driven. If your assessment is correct, it appears that she will be better suited to be your successor than your son. Your concerns about your daughter's commitment and availability to the business are understandable. Although she is single at this time, someday she may choose to marry. If she chooses to marry and have children, for example, she would he unable to run the business and single-handedly carry out the responsibilities of child rearing, i.e., attending school activities, doctor appointments, dinner every night, laundry. etc., etc. Your daughter can't do it and neither can any man. For generations most men have had women at home to take care of their children, maintain the house and support their careers.

 

Men, on the other hand, have had to sacrifice time with their children, vacations with their wives and evenings at home to advance their careers. Neither men nor women can "have it all." They have to set priorities, make choices and realize that life includes trade-offs. Over the years you, and perhaps your children’s mother, must have encouraged open communication within the family or your daughter could not have been so candid with you., Congratulations. Keep talking to both your daughter and your son, Tell them you plan to choose your successor early so there is time to make a smooth and successful transition. Tell them you plan to make your choice based on competence, the needs of the business, performance and motivation rather than primogeniture.

 

 

Today it is possible for both men and women to make choices and determine how they want to balance work and family. Your son, for example, may not be as achievement-oriented as your daughter and may not be interested in making the sacrifices required to lead your company after your departure.

 

 

Your daughter, on the other hand, may have already considered the tradeoffs necessary to assume your position — and decided the sacrifices are worth the personal reward. In either case, it is important that you not only talk to your children but also listen to them. With continued discussion, a focus on the needs of the company, and a willingness to be flexible, I am confident that you will arrive at the best decision for your company. Good luck.

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