I was fortunate recently to be part of a small group who spent a couple of days at the renowned IMD Business School in Switzerland as part of the Family Business Growth Programme (FBGP).
As with most training we all took something slightly different away, I was surprised that my key message came from a softly spoken German lecturer, Joachim Schwaus, and that he got me thinking about passion.
Much has been written about the difficulties of inter-generational transition in family businesses and the low number that manage to survive into second and third generations of the family and beyond. In my work with family businesses succession is, not surprisingly, the area that attracts the most discussion and is the hardest to resolve.
Business founders tend to be of a particular breed. Many of us have good ideas. Entrepreneurs have the drive and motivation to take their good ideas and make them work. They are risk takers, single minded in their belief in what they have created. Above all they have a passion for it and it is often this passion that makes the difference between success and failure. A passion that persuades their spouse to sign the guarantee in support; a passion that gets the first customer on board, then the second…….; a passion that carries a workforce along when there is no money to pay the wages.
The second generation may not be the same. Often the founder remains a dominant character and the single mindedness that brought the original success can inhibit the ideas of those that follow. There can be a reluctance to accept, or even to consider, change.
All businesses need to adapt and change as the world in which they operate changes around them. Family businesses are no exception and have the added need to deal with changes from one generation to another along the way. It is very easy to get lost in the technicalities of job roles, share structures and fair remuneration and lose what made the business successful for the first generation. Next generation family members need to have their own passion. This may mean doing something different – a new product or service, a different method of delivery, a change in scale. It may mean making their own mistakes along the way.
The FBGP aims to help businesses identify barriers to growth and we are now looking for businesses to take part. We would welcome the opportunity to come and listen to your family business story and ask a few pertinent questions along the way. And please don’t get the wrong idea if I ask when you next expect to experience some passion.
Paul Hake Family Business Partner