The desire of every business leader is to pass on the business to one of his own sons. This desire would be easy to achieve if all sons were interested in the family business. But as you may already know. Not all sons have interests in their father’s business. When a business leader has a willing and competent son. It means the business leader has successfully inspired one of his own to take after him. But if a willing son is missing, family Business leaders can do one more thing before they give up. They can discover the real reason for disinterest and ascertain whether a disinterest can be reversed. There are two types of disinterest over a family business. The first is the revocable disinterest and the second is the irrevocable disinterest.
Revocable disinterest is disinterest that can be reversed. There are caused by certain factors that are linked to a misunderstanding or misalignment of purpose. For example, Sons may lose interest in the family business for the following reasons. The fear of losing their autonomy. The possibility of losing themselves in the shadow of their father. The tendency to be micromanaged and treated like a child. The lack of a clear career path for independent growth and development in the business. The rejection of certain ideas, interests, and agendas. The fear of being stuck in a business that is run the old school way. And the fear of not having the capacity to run the business. These kinds of disinterest can be reversed when the right kind of help is sought. A revocable disinterest is thus not a real disinterest.
It is only the presence of certain concerns or fear that discourages sons from taking over their fathers’ business. A business leader can, thus, salvage a revocable disinterest. An Irrevocable disinterest, on the other hand. Is disinterest that result from certain early childhood neglect or a difference in passion and destiny. When a son has this type of disinterest. He is best left out of the business. Irrevocable disinterest is expressed in a total lack of passion for the family business. A silent or expressed resentment towards a business leader. Certain long-held blame that causes a rift between business leaders and their sons and so on. These types of disinterest can be difficult to resolve. A family with this type of disinterest must find other ways to preserve the family business.
But how do sons develop disinterest in the family business in the first place?
The lack of interest in the family business is caused by business leaders. Business leaders cause disinterest in the family business in two related ways.
First, they misunderstand what passing on their family business means. They interpret it as a privilege or favor rather than a fair exchange. And this affects their attitude. While passing on a business to the next generation help them gain certain wealth advantage. It is also beneficial for the preservation of wealth.
Handing over one’s business to the next generation is thus not a privilege or favor. It is a fair exchange and here is why. The only reason business leaders pass on their businesses is because they have a limited time disadvantage. While business leaders have a wealth advantage. Their time is limited. Therefore, the only way to perpetuate wealth is to leverage the time advantage of the younger generation. The younger generation has the time advantage business leaders need to save the life of their business. When sons take over their father’s business. They gain a wealth advantage they previously did not have. And make up for the time disadvantage of the business leader. This makes the exchange a fair and mutually beneficial exchange.
Second, business leaders see succession as a reverse relay rather than a normal relay. A normal relay is a race in which athletes run a pre-set distance carrying a baton and running towards the next athletes in front of them. A normal relay race is therefore about moving the baton towards the finish line. This means that arriving at the finish line is the most critical factor for winning a relay race. There has never been a reverse relay where the start line becomes the most critical factor. Athletes never run back towards the start line or maintain a start line position. A relay race is all about moving the baton forward. Business leaders must, therefore, shift base and prepare their businesses for the future. They must allow their businesses run into the future. And must be able to see today, what they need to do. To make their businesses relevant in the future. To achieve continuous relevance.
Business leaders must move from the rules that govern businesses today to the rules that will govern businesses tomorrow. They must work with their successors to understand the mind of future consumers. The more suited a business is to future consumers. The longer it will live.
Handing over your business to the next generation and preparing your business to succeed in your absence takes planning. It requires a business leader to overcome the reluctance of a son to join the family business. Overcoming this reluctance means resolving any pending issues that are holding Sons back. Without the resolution of these issues, the life of your business hangs in the balance. A business that lives on is the business that can protect the financial security of your children. This is one of the ultimate goals of creating wealth.
Perhaps your nights are full of worries about who will take over from you. You can mute the late-night worries by getting the right kind of help. If all your years of hard work is burned to the ground shortly after your exit. What have you done? Preserving your business for many generations. And securing the future of your children will not happen by doing the same things you have always done. You need fresh insights, new expertise, and a new mindset. I hope you are able to take the action that preserves your business today.
Updated Bio-Please Kindly Update.
Grace Agada is a Generational Wealth Advisor, Business Longevity Expert, and Author of the popular Solid Wealth Book. She Consults and Coaches a private group of clientele comprising Family Business Owners, C-Suite Executives, and the Boards of multinationals. She helps her clients prepare their businesses and leadership for generational relevance, competitive advantage and Goodwill with consumers. Her role is to help her client plan and execute Leadership succession, Business succession, and Consumer succession.