A founder of a business is not only a wealth of knowledge and experience, they often embody the businesses values and motivate esprit de corps. In my latest article for Bauer Media I discuss how family business leaders can transition into family business elders and the value they bring to the business from such a position. David Harland – Family Business Advisor
Many family business leaders who have transitioned out of the daily running of a company may still have more to contribute the business. Creating an emeritus status for your elders has the benefit of keeping them involved, retains their valuable experience within the firm, and can ease the transition from full-time work to retirement. All family businesses encounter challenges and it can be helpful to have an experienced advisor who knows the business to act as a sounding board.
A good role for an elder is that of an advisor or a consultant. This role is important because it leverages the skills and experience gained from years in the business while keeping them out of regular operations. Removal from the grind of running a company can give them the mental distance necessary to focus on the long view of the business, something that current executives, mired in daily operations, may not have the ability to do.
Elders can also play valuable roles as repositories of family history and as stewards of the family legacy. Part of an elder’s responsibility is to help define the family’s mission and create a legacy for future generations. Studies have found that families who take ownership of their legacy are much more likely to remain successful over multiple generations. Every family has a unique history that they would like to preserve and promote in future generations. However, that preservation process doesn’t happen by itself. It requires elders to tell the stories of how the family began and keep it alive among the younger members. A legacy needs active stewardship and continual investments of time and energy in promoting the family mission in the younger generation.
When thinking about the family legacy, it can be useful to ask yourself questions like:
- What are the qualities that have made your family what it is?
- Why have you been successful over the years?
- What mistakes have we made along the way? What have we learned?
- What qualities will keep us strong as a family and successful as a business in the future?
- What is the enduring legacy you want to leave to your children and grandchildren?
Giving elders a mentorship role can help ease succession by including them in an advisory role while allowing the next generation to take the reins. It’s important to honour the experience of elders and respect their willingness to continue contributing to the business. Keep in mind, though, that honouring one’s elders doesn’t mean that the next generation of leaders won’t be making important changes to lead the business into the future. Defining mentorship roles and establishing expectations can help maintain critical boundaries between welcome advice and meddling.
Therein lies the crux of the matter. How do next generation leaders encourage the presence and advice of elders while maintaining their independence and autonomy as managers? It helps to have clear separations between working and non-working family members and to establish advisory roles that do not fall into the formal hierarchy of the business. It’s also useful to assign elders specific projects that make use of their skills and knowledge, while leaving executives free to manage daily affairs.
To be frank, not all family business elders are suited to the role of an advisor. In order to be successful as an emeritus, an elder has to be willing to fully embrace succession and give up control over the business. Ideally:
- Elders stay above the fray, using their wisdom to help the family manage conflict;
- Elders do not engage in gossip or undermine the next generation of leaders;
- Elders understand the delicate balance between mentoring and taking over;
- Elders are focused on the long-term good and legacy of the family;
- Elders take an active role in supporting business leadership and mentoring younger family members;
- Elders have a good grasp of group dynamics and recognize the emotional needs of family members.
Regardless of what role an elder takes on after retirement, giving them the opportunity to actively contribute can build esprit de corps within a company. When employees see that former leaders (for whom they may have a great deal of respect,) are still involved in the business, it can foster pride in the business.
There are also pragmatic business reasons to keep elders around after formal succession. Even if a great deal of training and preparation has gone into a transition, employees, customers, and other key stakeholders may feel a sense of comfort in knowing that the previous leadership hasn’t completely abandoned ship.
Are you after advice on your Family Business Legacy call FINH on 07 3229 7333