The Family Business-Building the Legacy
This blog originally published in Printing Impressions.
Family owned or controlled graphic arts companies have been the core of the industry for years. And obviously not just in this industry, but throughout the business world. I don’t have the recent stats, but it wouldn’t surprise me that the percentages are even higher for the graphic arts industry. As any business has its challenges, family businesses have a special dynamic that make them both strong, and full of unique opportunities.
Determined to be Great
Blood is thicker than water. A common expression heard around a family business and an important ingredient that helps family businesses to thrive. Making sure that folks are in the right jobs, have the right skills, and are aligned in making the company great are important in all types of companies, but even more important for family members. Having either worked in or consulted with many family graphic arts companies over the last “many” years, I’ve had a front row seat with some of the great ones and it’s pretty cool to see them in action. They live for the business, and their family, and are determined as ever to make them both great. A leading attribute is the ability to separate family and business when making strategic decisions. They aren’t afraid to make that difficult call at work and still manage to keep the family strong – it’s a unique talent.
Second, third, fourth, and fifth generation company involvement is also a wonderful phenomenon to witness. Depending on the situation, these companies may even have built-in succession plans. With the right planning, beginning with having kids, or siblings, or other related family members who want to be in the business, it can work and work well. The leaders treat their succession planning seriously and actually have a plan, well before they actually need a plan. They consult with people they trust, both inside and outside of the business, to craft a plan that protects the family interests as well as ensure the stability needed to guide the company into the future. If you don’t have a plan, now is a good time to begin the process.
Challenges can arise when the rate and pace of change within the business gets debated and creates frustration. Emotions can sometimes cross over the line of objective business planning. The desire to adapt and add new technology and capabilities is often weighed against those in control of the checkbook. Not any different than in a non-family business. There may be a hesitancy though to write that check or take on new debt in the waning years of being directly involved in the day to day operations, yet still financially responsible for the business. This balancing act can take new heights when there isn’t a succession plan in place. Treat these, and all situations by using good sound business practices, and ROI discipline. This will prove to be the best course of action in the long run, albeit maybe bruising some feelings at times. Create your plan, share it with the team and create a mechanism that ensures accountability for each member. On paper, it’s just like in a non-family business. Easier said than done.
Create a Lasting Legacy
Forward thinking family businesses don’t force family members into working in the business, as they won’t want to be there and it’ll show in their performance. It’ll be painful for those involved and for those watching from the sidelines. But if they want to be there, fantastic! It’s hard to replicate the passion and drive when your name is on the door. The legacy continues with the ideas, passion, and views of the new generation. The younger generation can build off the core business and extend the greatness, while taking advantage of new market and technological opportunities. It may involve taking the business into a whole new direction, staying the course, or a little of both. Either way the legacy can live on.
Areas of Focus
Here are some things to think about, and you’re not alone – family run businesses are in the majority and there are plenty of resources that can help you. Don’t think that you have to re-invent the wheel as there are those who have probably tackled the same issues that are currently on your plate.
- Don’t hesitate to make the right decision, even if it will upset the feelings of a family member.
- Make sure that your succession plan is solid and communicated to those that need to know. Use your outside advisors to help keep things in perspective and to provide objective feedback to your plan.
- Weigh investment decisions on their business merits and not on hunches, even if it comes from a family member.
- Keep everyone accountable for holding up their end of the business. This goes for non-family members and it goes double for family members.
- Work hard and work smart to protect the family interest and continue the legacy of the business.
- Take advantage of the new ideas, particularly from the younger generations to expand into areas that you may not have thought of before.
Give this a try and let me know how it works out for you. Good luck and remember, doing nothing is not an option!
Mike Philie can help validate what’s working and what may need to change in your business. Changing the trajectory of a business is difficult to do while simultaneously operating the core competencies. Mike provides strategy and insight to owners and CEOs in the Graphic Communications Industry by providing direct and realistic assessments, not being afraid to voice the unpopular opinion and helping leaders navigate change through a common sense and practical approach. Learn more at www.philiegroup.com, LinkedIn or email at email@example.com.