Proactive Family Business Successors
By Dean Fowler
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About this ebook
This article is an edited transcription of a seminar titled "Successful Habits of Family Business Successors" that was delivered to the Family Business Center of the University of Wisconsin-Madison at the Fluno Center for Executive Education. Seventy percent of all family businesses fail to make the transition of ownership and management from the first generation to the second generation. In this article I focus on the success rate. Through my research I have identified the common characteristics of successful successors. I call these common characteristics the Seven Habits of Highly Successful Successors.
Review:
"Dean Fowler's presentation to the UW-Madison Family Business Center - now transcribed as "Proactive Family Business Successors - was exceptionally well-received by the program attendees based on about 100 evaluations completed by the 125 attendees. His educational presentation was interestingly infused with anecdotes based on his years of family business consulting and leading successor groups. Dean Fowler's program on succession planning speaks loudly to the succeeding generation - a perspective that is less commonly presented. I highly recommend this presentation to everyone". Ann Kinkade, Past Director UW-Madison Family Business Center
Dean Fowler
Dean R. Fowler, Ph.D. is recognized as one of the world’s leading experts specializing in the emotional dynamics that impact families-in-business and families of wealth. The international association, The Family Firm Institute, recently honored him by selecting him to receive the prestigious “Award for Interdisciplinary Achievement”. His book – Love, Power and Money – has won world-wide acclaim in reviews in the major publications dealing with family enterprises as one of the best books on integrated family transition planning.In 1995 he developed The Family Business Assessment ToolTM and has since developed The Business Partners Assessment ToolTM and the Family Wealth Dynamics Assessment ToolTM.In 2008 he was appointed to serve with a select group of business leaders on the Coleman Chair Advisory Council at Marquette University’s College of Business Administration.In 2009 a new television series – Family Inc. – was launched in five Midwestern states with Dean Fowler serving as host. (family-inc.com)During the past forty years, Dean Fowler has served over 300 family clients in both the United States and Europe. His firm, Dean Fowler Associates, provides integrated services focusing on the “soft side of hard issues” by working closely with the other professional advisors trusted by the family client.
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Proactive Family Business Successors - Dean Fowler
Proactive Family Business Successors
A presentation by Dean R. Fowler, Ph.D.
Smashwords Edition
Copyright © 2011 by Dean Fowler, Ph.D. All Rights Reserved.
This article is an edited transcription of a seminar titled Successful Habits of Family Business Successors.
The seminar is available as an audio CD which may be ordered at:
http://www.deanfowler.com/resources/books-cds/
As most of you already know, seventy percent of all family businesses fail to make the transition of ownership and management from the first generation to the second generation. That doesn’t mean they necessarily go out of business. They might change ownership or sell the company – but very few family businesses actually make it from one generation to the next. That’s the failure rate, but in this article I want to focus on the success rate. While nationally, only about 30% of family businesses succeed, members of my Forums for Family Business℠ have a 90% success rate.
For the past 25 years I have been leading roundtable peer groups called Forums for Family Business℠. The first group I started was a successors’ group. To identify the habits
of successful successors, I reviewed characteristics of sixty different family businesses which have participated in my Forums over the years.
What is it about the companies that make it from the first generation to the second, or the third to the fourth, that really make them successful?
I don’t know if you’ve noticed, but people who mess up, who do it wrong and are dysfunctional rarely participate in continuing education. It’s those of us who actually don’t need to read this article and who want to learn even more, who are the ones who participate. Consequently, you have a higher probability of being successful in your business and in your family and in your transitions just by the fact that you’ve selected yourself to be involved in continuing education.
Well that’s true of my Forum members. In fact, we have about a 90 percent success rate of transition from one generation to the next in these groups, and so I asked myself, What common characteristics do they have?
And it’s those common characteristics that I want to share with you in this article.
I call these common characteristics the Seven Habits of Highly Successful Successors, and as we go through these Seven Habits, you should evaluate yourself on each of these habits using the check sheet provided at the end of this document.
These Seven Habits are consistent with what I like to call upside down planning.
Too many family businesses go about their intergenerational transition in the wrong way. I want to first review the normal way
and then discuss the successful way.
Following the normal way
, family businesses start by addressing the needs of the senior generation. Using this approach, the senior generation has the primary responsibility to make sure that everything goes right; that all the correct planning has taken place; that all the trusts, all the estate plans and everything are in place, and that the business is secure and is prepared and ready for the next generation.
Certainly it is important to pay attention to estate planning