Crosby, Stills, Nash and Young, the folk rock supergroup, offered some pretty good advice when it comes to family business and the next generation with their song “Teach Your Children Well”.
Too often I am called into enterprising family situations where the struggles of the next generation are related to a lack of formal plans to pass along hard-won knowledge from the senior generation. While we often think of the stereotype of a senior generation leader who will not let go, I recently encouraged a sibling team to sit Dad down and request more frequent involvement so he could do more to mentor and support them.
Even when the technical details of transition are worked out (e.g., compensation, transfer of ownership, buyout of senior generation, leadership structure) it is not unusual that a formal process to share the accumulated experiences and wisdom of the senior generation is lacking.
What is the Lesson?
Building a business and growing it involves years of learning through all kinds of experiences. Developing the next generation also takes years and a very important part of that is formalizing the process of sharing knowledge. Craft a long-term plan to detail all the lessons learned and transfer them to the next generation. It is one of the best investments a family can make.
Advisors to Enterprising Families:
The technical aspects of planning for a generational transition usually get most of the attention. Stand out as an enlightened advisor by encouraging your family clients to also take seriously the best practice of formalizing the development of the next generation through a long-term plan to share the valuable experiences of the senior generation.