Have you ever wanted your son or daughter to take over the business? Because they're your children, they'll have to work harder than others if they want to step into a leadership role in your business.
According to the Family Business Institute, only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. This is why succession family planning is so very important.
I’m a second-generation entrepreneur that took my father’s business after his death from only 5 employees, being heavily in debt, and having very little revenue (less than $90,000) and successfully grew it to over 150 employees before selling the company.
My wife, Susan, and I have three sons, Rob, Brian and Kyle. People would often ask me if some day one or more of our sons would take over the moving and storage business. My usually answer was that I wish it would happen, but the chances of them being successful at it are very slim.
I would tell our sons when they were young:
“If you are interested in the moving and storage business, you would be required to obtain a job (with parent’s assistance) with another moving company in another city for up to two years.”
Or, “If you are not initially interested in the moving and storage business, but later becomes interested, you would need to have been employed up to two years at another business.”
Starting at a very young age through college, I had all of our sons work in the business. The two older sons have even worked in our business after graduating from college. In both cases, they first worked somewhere else for at least two years.
So why are the chances of success limited?
1. Because they are “The Boss’s Son” – The “Boss’s Son” label comes from a son and/or daughter who truly act like one who has been born with a silver spoon in their mouth. You know what I mean. They have an attitude of looking down at the working people, like they are too good to do that kind of work.
2. Lack passion, vision and sense of purpose – The founder, entrepreneur, is the one with so much passion and vision for the business he or she would work the long hours to assure the success. The second and third generations generally just do not have the same passion for the business. They do not even have a sense of the purpose of the business. Without passion, vision, and sense of purpose there is a greater chance the business would not grow and even fail.
3. Lack leadership experience and business competence – In many cases the “Boss’s Son” had not earned the leadership experience in this business or in another company. They also lack business competence in general and specifically in dad’s or mom’s business. This lack of experience and competence could lead to total failure of the business.
As part of my family succession planning I have for many years coached our sons to think more like good owners and not managers of the business. They should hire professional experienced managers.
Dad knew the path to success
The best advice my dad gave me was when I went out to work with the crew was that I was not to act like the “Boss’s Son”. Even though I was very young, in junior high school, somehow I knew exactly what he meant.
So I took on being the “swampier” for the crew. I did the work the others did not want to do or did not like to do. I took one break from work to their two (The crew often would kid me that they were taking a chewing gum break because I did not smoke). I also would run or walk fast between the house and the truck, passing them as they walked.
Mutual respect paves the way for leadership
When Dad died, I had just graduated with honors from college at the age of 20. Now I was those crew members’ “boss”. Shortly after my father died, I had to ask all of the employees to take a pay cut. I was not sure if we were going to financially survive. Every one of the employees that I asked agreed to a cut in their pay. Amazing!
When you work side-by-side with folks, you get to know them – and they get to know you. They knew my character, and I had earned their respect even though I was the son of the boss. I also respected them for who they were. They had heard from others about my leadership at the local University I attended. They taught me to do their jobs, and eventually, I could do their jobs with proficiency.
When I think about it, the concepts of hard work, humility and mutual respect apply to everyone. If it can help this boss’s son, it can help anyone!
Well, just like my dad, I passed on to our three sons that they shouldn’t have the attitude of the “Boss’s Sons” when they went out to work with our crews. It has paid-off for them as well. It is a really good feeling when crew members ask to send your son out with them on a job. It can happen for your family with good and thoughtful planning.
If you own a business, how are you intentionally raising your children to overcome the challenges of being the Boss’s son or daughter?