Succession and "The Family Code of Conduct"
How can you turn the business over to your children without creating chaos. This is probably the toughestquestion any business owner that has family working in the business will ever face. However, the answer issimple. The answer is... It depends. It depends on how well you (the owner) have prepared yourself andyour child for this transition. Have you planned this out? Has your successor been trained, developed andprepared for the transition? In most cases privately held businesses generally have several family membersworking in the business. When the president has more than one child in the business, things start to getmore complicated.The family business structure can be complex and confusing. This is especially true when numerous familymembers work in the business. The business is composed of interdependent relationships betweenfunctions and people that depend on the ability to work toward common objectives. A family ownedbusiness with multiple family members has twice as many opportunities for mistakes, resentments andcomplacency. Teamwork is essential and effective communication is critical. It is of paramount importancethat employees are recognized as the true reason for success. Family issues must not penetrate the businessenvironment. Holding family business meetings, off site, on a regular basis is highly recommended. Thesemeetings should be used to air feelings, check boundaries and clarify roles and responsibilities as they arebeing played out.Succession by a family member should not be a gift. It should be earned; Earned through hard work,dedication, leadership, honesty, integrity, competence and trust. As an owner it is necessary to instill astrong work ethic and the development of leadership skills in the children. The responsibility is two fold. Itis one of “Preparation” and “Protection”; Preparation for succession and Protection against the possibilitythat the child could destroy the business.Don’t make the mistake that I have seen made numerous times of making two family members equal in thehierarchy of running the business. It is extremely rare to see a successful “Two Headed” King or Queen.This means you have to have the courage to select the best child to run your business and not resort to “Co-Presidents or Co-CEO’s”. It just doesn’t work very often and in many cases it can destroy the business. Ihave seen it result in very open public physical conflict. I have even seen it result in death threats.Oh --- I can hear you now. “That just wouldn’t happen in my family.” And, you are probably right. But, itdoes happen often enough to make it a valid concern. Why take the chance. Have the guts to deal with yourfamily issues up front. Don’t avoid the tough decision of selecting which child should run your businessand how you will deal with any resentment or conflict.Even if you do everything right, siblings may just not get along working together in the family business. If that’s the case, the following sample “Code of Conduct” may be helpful as a starting point in dealing withyour situation.“The Family Code of Conduct”I Will Always:1. Deal with family members with integrity, honesty and respect and never criticize another familymember’s decision in public.2. To the best of my ability attempt to demonstrate courtesy, respect and friendship in dealing with otherfamily members to show employees that the family is united.
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