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July 26, 2019

When Should You Fire Your Child?

 |  By: Mike Opperman

For every great story about families aligning to create a great family business, there is another story about family relationships that don’t work. Both parties can be at fault, either a parent who is unwilling to let go of the reins, or a child who is unqualified to take over the business. Either way, something eventually has to be done to preserve the future success of the business.

“Choosing to fire your child can be one of the most difficult decisions you can make as a leader of a family business — and the consequences will be enduring no matter how well it’s done,” says Judy Lin Walsh and Ben Francois, both principals at BanyanGlobal which specializes in succession planning and family business ownership strategy. Their comments were recently published in the Harvard Business Review

Don’t go on a knee-jerk reaction, but get to the core of why the situation is not working. These four questions can help you find a path forward that works best for you, your child and your business, Walsh and Francois say.

Are expectations agreed upon?
If you have set your child up to fail with unrealistic expectations it will be impossible for them to succeed. Without clear goals and a mechanism for feedback and development, there can be no clear metrics to measure progress and hold your child accountable, Walsh and Francois say. 

Have you clearly defined the role you’ve put your child in so you both know what to expect? Does your child have the right experience and skill set to do the job well? If not, what is the plan to build that skill set? Is your child held to the same standard as other employees with reasonable targets and standards?

“If you answered no or unsure to any of these questions, ask a trusted third-party adviser for a neutral assessment,” Walsh and Francois say. “If there is still potential to remedy the situation, consider asking that adviser to step into a mentoring role.”

Is there a cultural mismatch?
“We often find unexpected trouble when the next generation is highly motivated to make a mark on the business, but is not yet mature or trusted enough to do so, which wreaks havoc on the corporate culture,” Walsh and Francois say. We see this in the dairy business when the younger generation wants to implement new technology but the older generation still wants to do things the way they’ve done them for years. 

Sit down with your child and have a hard conversation about the values and culture upon which the business was founded, Walsh and Francois suggest. Deliver a firm message that your child will need to adapt their approach and be respectful of the company’s culture in order to be successful. Again, having an outside coach can help.

To read the rest of the article, click here
 

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