A family business executive coach, Don Schwerzler has been working with family business owners and their families for more than 50 years. Dealing with the complexities of family business dynamics requires skill sets that are not easily acquired. “In non-family businesses, you tend to find rational problems and rational solutions – whereas in family businesses it is not uncommon to be dealing with rational problems and emotional solutions,” observes Schwerzler.
The major reason business owners reach out to a family business executive coach is to help deal with change management. In today’s digital age, successful family businesses are being defined by their ability to change, and to be able to do it quickly! As a professional resource, a family business executive coach often acts as a “sounding board” for business owners – someone who is not part of the business and not part of the family, someone who can offer objective feedback to the decision-making process.
“Family businesses are prime targets for Merger and Acquisition firms – they generally view family businesses as “under performing assets” says Schwerzler. If the M&A firms can make a lot of money developing the potential of a family business, why not the family? A family business executive coach can help a business owner develop the true potential of their business – not only for the present owner/managers, but for also developing the potential of the next generation of owner/managers.
Studies show that only about 30% of family businesses successfully transition to the second generation; 12% successfully transition to the third generation; and only about 3% successfully transition to the fourth generation. A family business executive coach can help a family business owner beat the “succession odds” by helping to formalize the management style of the business; developing and updating strategies; resolving inter and intra generational disputes; and helping 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 owner.
Managing a generational family business is not easy. First generation owners often are operating on a shoestring – short on money, time and having to rely on his/her entrepreneurial instincts to survive and make the business grow and prosper. Decision making is simple and basic, right or wrong! Second generation family businesses - The evolving family business models are described as “sibling partnerships” that populate second generation family businesses. Some of the siblings may be owners but not involved in day to day operations. Members of the management team can be blood relatives as well as spouses of blood relatives. Third generation family business - The next iteration of family businesses is “cousin consortiums” – here it gets especially complex dealing with multiple owner/shareholders. A family business executive coach can help the management of a family business make better decisions for both the business and the family.
Crisis management is another reason for a family business owner reach out to a family business executive coach. In a family business, problems that arise in the business will impact the family and family problems can impact the business. Examples include the death or incapacitation of the owner, divorce, drug and alcohol addiction can have devastating legal consequences to the business and the family. Unresolved family problems in a family business can wreck the business and destroy family relationships. Business disruption problems caused by floods, fires, hurricanes or pandemics such as Covid-19 force the business owner to consider re-opening in very different circumstances – or maybe not even opening at all… A family business executive coach can make a huge contribution to the health and well being of the business and the family.
borrows from both consulting and therapy (HBR)
A family business executive coach can also be used to support HR functions – helping recruit and interview candidates (both family and non-family executives) for senior level management positions; assisting in negotiating employment strategies & contracts and remediating employee disputes. A family business executive coach can also play a role in matching the needs of a family business owner with appropriate professional service providers such as lawyers, accountants, consultants and financial planners.
Lastly, the family business executive coach can help a family business owner develop and manage the succession process – helping the senior generation with exit strategies and successfully on-boarding the next generation of family owners and managers.
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