In previous articles I have written about succession in a business, but as my own kids get older I am reflecting on my experiences in the family business and what I might wish for or, more importantly, what I can offer my children in terms of business and life experience by working in my business.
I want to examine three concepts here. The first is the traditional idea of continuity of the existing business with family members – presumably children. The second is understanding parent’s motivations for doing this and the possible danger points along the way, and thirdly, the sort of preparation one should consider in confronting the incredible changes coming.
Fortunately in Australia at least, we are past the sexism of thinking that a son should be taking over the family business. Elsewhere, the oldest family jewellery business in Europe Mellerio dits Meller (established 14 generations ago in 1613) is to be led for the first time by Melleiro’s daughter – who by the way is not a trained jeweller, but has a graduate degree in marketing and business administration.
Having worked in the family business since I was 10 with a father who worked for his father from a similar age, I can speak from experience. Of the three children in the family, my older sister was never going to work in the jewellery store although years later became a successful retailer of women’s fashion (it must be in the blood). My older brother used to run one of our stores and was convinced he was going to take over the family business.
My father had other plans. Being a very strong influence in our lives he was convinced that my brother should be a lawyer. Needless to say my brother has been a very successful lawyer for the past 30 years. Hence, yours truly joined the family business and continued, although maybe not in the strictly traditional sense.
So in my case my father taught me through examples: how to buy well, do effective displays, merchandising, multiple selling styles and above all understanding the true cost of running a business and how critical it is to make a healthy profit. It was always driven home that talk about turnover is overrated. Maybe if you were a department store it works, but as a jeweller it’s all about profit margin, and having fresh stock to attract customers.
Interestingly there was another concept that even when I was at University they spoke about. Location, location, location – yet today this concept has been blown out of the water as so many retailers are destination stores, not to mention the disruption caused by the web.
At the end of the day I am sure my story resembles many others. But my dad didn’t really look at continuing the family business from a tradition point of view, rather as a good way to make a living, and he felt I was best suited from my siblings to fulfil the role. There was nothing scientific or carefully planned, it just sort of happened.
Now let’s look at the motivation behind continuing the family business. There are too many reasons to list them all, but sometimes the motivation is simply ego, i.e. continuing the family name. In other cases, brothers see themselves as heir apparent without the family carefully analysing each sibling’s strengths.
By the way, did anyone actually ask the child what they want to do?
As we get older we still find ourselves wanting to please our parents or win their favour. How often did we stop and think about what other options are available? It’s so easy to just follow a path mapped out for you, and one which you are told by those you trust should be your future.
The biggest challenge is that regardless of how well a parent might teach their children about business, the speed and complexities that we all face within business can mean that they may not be fully equipped to teach them a whole new set of skillsets on top of the traditional ones… despite their best intentions.
My father would have found all this technology unfathomable, he even struggled with a mobile phone. So, what it will take to bring the family jewellery business into the next millennium?
If you were determined to have continuity and you had a few children who were keen to move in that direction, I would make the following suggestions: Think of your business like a corporation. You need accountants, you need sales people, and you need creative people. If you are not sure what skill set or personality type your children are, do one of the psych tests that are incredible at nailing an individual’s strengths and weaknesses. I use one for all new employees called PDP and I’m blown away by its accuracy.
Once you think you are clear, be very sure that the aim is not just to please you or some romantic notion of carrying on the family name; it could also be the demise of the family fortune if those involved are not passionate and excited by the future.
Last but not least, watch TED talks and see what the latest advancements and social shifts are. It could be something that touches your world. I always rant about travel and it’s even more important today.
In my last article I wrote about the “DEEP THINKING” I can’t emphasis enough the importance for all of us to sit up and take notice of this computing breakthrough. This is about computers being able to understand and comprehend. We already know that when you throw enough computing power at a problem it can derive results that would take 100’s of people and years to calculate.
Today when you surf the web you are already being led to certain conclusions that would on the surface appear to be your free will, and I guarantee you that more and more technology is analysing your preferences.
Imagine a couple is getting engaged. She likes Tiffany and he likes surfing. Facebook easily identifies that they are a couple, in the simplest case they just start showing him articles and images from Tiffany’s. In the more sophisticated marketing ploy, Facebook suggests to Tiffany that they may want Mick Fanning to do an interview on how he only buys his wife Tiffany jewellery. Imagine a piece of software that takes your total database and analyses common denominators with your customers, then searches the web to understand their social profile and preferences, and shows you how to market to those customers with surgical precision.
With “DEEP THINKING”, computing smart companies will use software and creative marketing to understand who your business is marketing to and manipulate the material your customers are viewing. Yes, we are all susceptible.
The purpose of what I am writing is not to scare anyone, but to emphasise the need to understand the skillset that the next generation will need to possess or at least understand to compete in the future. A family business has an element that is more powerful than computing – it is passion, purpose and a history of relationships.
Identify and use these qualities wisely and your brand can also continue for the next 400 years!