Nexters is the name we assign to the “next generation” - the next leaders and owners of the family’s business. According to one HR report, the Nexters include about 76 million people and represent about 62% of the non-exempt population.
For some family businesses the transition period from one generation to the next is positive and productive while other family businesses experience significant problems that can wreck the business and destroy family relationships.
“So many of the succession issues are self-inflicted” says leading family business expert
“Tensions and disagreements in a family business are often the result of organizational overlap – where responsibilities are not clearly understood by the family members, the non-family managers, employees and sometimes even vendors and customers!”
Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and is the founder of the
Family Business Institute
and the web organization Family business Experts, both of which are headquartered in Atlanta GA.
“For the Nexters, part of the problem associated with responsibility diffusion is a factor of boredom – what we refer to as the ‘tyranny of routine’” notes Schwerzler. “The Nexters tend to be working ‘in the business’ rather than working ‘on the business’. When the senior generation is doing the same thing, inter and intra generational conflict is almost certain.
The senior generation is generally more risk adverse – wherein any change to the routine of the business can be a threat and therefore tend to prefer the status quo to making significant changes in the management of the family's business.
On the other hand, the Nexters often see the potential of the business being marginalized and are frustrated that they cannot effectively challenge the senior generation.
Communication issues also play into the succession equation. For instance, a Nexter who is technology savvy may be frustrated in trying to get the senior generation to share the Nexter’s future vision. At the same time, the senior generation may be more concerned about
the family business, given our failing economy.
So, how best to solve this succession-related conundrum?
Our work, with many hundreds of successful family businesses, indicates that the solution is getting the Nexters involved in the business – differently!
Consider a key question for every family business:
"Succession, whose job is it?"
We think the responsibility for preparing the business for transition from one generation to the next should be assigned to the future leaders and owners of the family's business!
When we are doing our
Family Business Assessment
, rarely do we encounter a Nexter who does not “know” the family business – most have been “in-training” most of their lives, if not directly in the business, certainly by osmosis around the dining room table! The discussions about the business become the discussions of the family.
What makes our Family Business Assessment process so unique and successful is the involvement and leadership of Don Schwerzler. Schwerzler is not a CPA, attorney, financial planner, family therapist, insurance salesman or academic – he is a rock-solid businessman who has helped many hundreds of family businesses achieve their goals and objectives by helping family businesses grow, to maintain healthy family relationships and then, when the time is right, to help the family transition the business from one generation to the next – or to help prepare the business for sale if that is the better option for the family business owner.
So if a core problem for the Nexters is “boredom” – how best to energize the Nexters?
According to Schwerzler, “Give the Nexters the responsibility for planning and managing the succession process!”
A good technique for the Nexters to use when getting started is simply doing a
– to better understand the Strengths, Weaknesses, Opportunities and Threats that confront the family’s business. The SWOT analysis can be done for the entire business and/or used to better understand each and every department within the family business. Simply stated, the SWOT analysis provides the talking points (between and amongst generations) for
Another suggestion - we offer a complimentary
to be completed by the senior generation. The Succession Survey can provide an overview of the succession-related issues that need to be addressed.
Does your family business have an
? An Advisory Board can be a wonderful safety net for the business and the family should the family business owner die or become incapacitated. To get started, we recommend having just one member on the advisory board, someone who is not connected to the family and not connected to the business - and who is an expert in family business dynamics.
Another technique/opportunity to move the succession process forward is to develop a
for the family and then a Mission Statement for the business. This approach helps separate family issues from business issues. It also helps underscore the importance for understanding what we refer to as the “dualism dynamic” concept - that the planning process for the family should drive the planning process for the business.
Using a simple
as a succession management tool for the Nexters simply makes good sense. It will enable the family, managers and employees better understand how the business is “connected” within itself as well as with customers and vendors. It helps create the infrastructure that is so vital to successfully transitioning the business from one generation to the next.
The point being made is that the Nexters get involved – SUCCESSION IS NOT A SPECTATOR SPORT!
If you are a Nexter and would like to discuss your role in the succession process for your family business – simply use the Ask The Expert form (below) to connect with an expert in dealing with family business dynamics. We can help!
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