Essential Paradigms Shift in Family Business

Paradigms are the strongly held beliefs and assumptions we use to "filter" incoming information. They are the eyeglasses through which a manager in family business "sees" problems and potential solutions to those problems. A family business manager suffering from paradigm paralysis fails to change his or her beliefs and assumptions when new information shows a change is needed.

Paradigms may be long standing:

"Salespeople are only interested in selling me something."

They also may be new:

"The web makes hard copy obsolete."

In their most constraining form, they appear to be completely consistent with common sense and the decision maker's life experiences. Note the following paradigms about management succession - the challenge of transferring management to a new generation of people that every family business eventually faces.

The paradigms labeled as "new" avoid an artificial separation of family and business. The paradigms labeled "old" summarize the more traditional views that have dominated thinking about management succession. Imagine two families each facing similar management succession challenges. The first family has all the old paradigms. The second family has all the new paradigms. Undoubtedly their management succession problems solving would differ markedly.

New: Some families will decide, for good and justifiable reasons, to liquidate their successful businesses rather than pass them to the next generation.

Old: Managers of successful family businesses oppose liquidation in their life times and believe they owe the next generation the opportunity to continue their businesses.

New: In management succession, family and business concerns are overlapping and inseparable.

Old: In management succession, the business concerns dominate and family matters are secondary and separate.

New: Mission and goals for the family business continuously address management succession.

Old: Management succession, retirement planning and estate planning are relevant issues only at the end of the business founder's career.

New: Planning of management succession encompasses the extended family.

Old: Planning of management succession concerns only the people directly involved in ownership and operation of the business.

New: Successful management succession does not guarantee the long-run viability of a founder's thriving family business.

Old: A family business thriving in this generation depends primarily on management succession to be successful in the next generation.

New: Employment outside the family business may provide essential perspective, maturity and experience necessary for success in the family business.

Old: Haste in joining the family business is essential because the opportunity may be lost.

New: Joining the family business as an employee in a non-management capacity with a formal job description and regular performance evaluations provides a beneficial testing period both for the family and the family member employee.

Old: Family members come into the business as managers and co-owners so that they have an immediate sense of responsibility, importance and commitment.
(ArticlesBase ID #1233528)