The CONNSTEP Blog
Forward thinking manufacturing companies are positioning themselves for growth upon general economic recovery. There may be some wounds to be healed, but there’s a future to deal with. If the idea is to grow the company, and that’s the healthiest approach, then there should be some thoughts about what the organization should look like now and in the future—a plan. If this is a family owned business, then the organizational transition will involve more complex issues.
Manufacturers’ normal aversion to strategic planning is based on the owner’s greater comfort level working in the business rather than on the business. But even those owners who have done some strategic planning, have a much harder time with family succession planning: it involves personal issues that are not easily faced.
The unwritten rule that what is good for the business should benefit the family, but the reverse is not always true, can make for awkward dinner conversation when the owner returns home from a tough day at the plant to discuss things with the spouse who has also had a tough day— and maybe even at the same office.
It is often the case that after the first generation, the business cycle is at or near either side of its peak value in the revenue versus chronological time curve. In any business that usually calls for generating a new growth curve—new business model, new products, new customers, new markets, upgraded technology, and/or capital investment. It could mean selling the business. For a family business about to transition this could involve some competing drivers.
Major capital infusion to a close–to retirement owner sounds like messing with my retirement income, but may be critical to generate the growth required for the business…. and for the retirement income.
It may also be the time to seek a different kind of leadership—revolutionaries that create new governments are often the wrong kind of leader to run the new government. And the kind of governing body that brought the company to the present heights, may not be best for the future. It is not just a case of junior not having dad’s or mom’s specific skill set or sales connections, in some cases dad can’t leave, in others he won’t leave, and in still others, she left before things were made right for the new governing body.
These and many other issues need the attention of an expert or experts to handle the organizational, financial, and legal issues, and the company positioning. There are people out there who provide the kinds of insights to develop a succession plan. It is an important plan that impacts the present, and the future, and how others will think about your past. Don’t let the opportunity to plan for the future of your business pass before you do.