Hoping that your children will continue your hard work and keep your business alive? Make the transition easier for them – and for you – with these practical tips.
Like many family business operators, Angus Kennard, CEO of Kennards Hire, says he was never pressured or forced to enter the company, but has seen great value in working his way up through the ranks.
Yet with 14 in the next generation, Angus says his business needs distinct rules around succession and the hiring of family members to ensure that both the business and the family remain on steady footings.
“Often when you’ve got a family business, it’s hard to separate the business from the family, and there’s not a family meeting that goes by that we don’t have conversations around business. I have them with my dad all the time, and they’re great,” Angus says.
“[But] there’s plenty of great businesses that have fallen apart not because of the business falling apart, but because the family has fallen apart.”
According to Angus, developing solid structures around your transition out of the business and the entry of younger generations goes a long way towards reducing family conflict and business stress.
For the Kennard family, Angus says it was a lengthy two-year process to define the family values and how they aligned with the future vision for the business, but it was a highly valuable investment to devise and implement a workable charter.
“I think it’s always easier for the next generation who are actually growing up in that process. It’s all they’ll have ever known,” he says.
Family rules within Kennards Hire
Angus says Kennards Hire has implemented these official rules determining the entry and oversight of family members working within the business:
1. Prior experience: “We have a rule that if you want to come into the business you’ve got to work somewhere else for five years. Go and make mistakes on someone else’s watch, go and have to hire someone else or fire, or be fired, or be performance managed, or get a job yourself. That’s a critical thing.
“It could be five years, it could be three years, it could be 10 years. We just felt it was enough time for you to have to stand on your own two feet.”
2. Skills-based employment: “Coming into the business, family members only reach the level that they’re capable of, so there’s no priorities for family members as to where they can go,” explains Angus.
3. Independent lines of authority: “It really shouldn’t be family members deciding [family promotions and appointments], it should be people within the business having independence about what level they can get to, whether [they are] suitable for the role, and positioning them in the place that they’re going to have the best success.
“We have this rule that family members don’t report to family members, because that can also cause a bit of a challenge, [but] with me becoming CEO, that’s posing a few challenges.”
4. Beacon of culture: “If you’re going to work in the business, you’re carrying the flame of the family. [Identify] what are the behaviours that you need to enact to ensure you’re living the values, because as a family member, you’re a beacon of culture – people will look to you as what the highest rules are.”
- Opinion: House prices not all doom and gloom
By Adam Zuchetti
- Analysis: How can SMEs realistically stay competitive?
By Adam Zuchetti
- Opinion: Victim blaming shows extent of harassment culture
By Adam Zuchetti