Tuesday, April 21, 2015

Business Family Dynamics and the Continuity Process: Initiating the Conversation

Member Resource Series #1

The process of generational transition—also called “succession”or the “continuity process”—is the single most-talked-about issue in the area of family enterprise today. Business family members often delay addressing this complex challenge because of the type of conversations and decisions that need to take place with the future generation. Advisors want to help business families develop a plan but are equally apprehensive about broaching the topic of personal family relationships and associated dynamics with their clients.

However, conversations about interpersonal dynamics and generational transition are necessary for the family to secure its best chance of long-term success. In order to provide some helpful and effective ways for advisors to successfully broach these conversations, IFEA spoke to several renowned family enterprise experts and gained some insight from their experience. Among them, several key attributes on the part of advisors repeatedly came up, including the relevance of active listening; the ability to identify a client’s (or family’s) readiness; the ability to resist the urge to provide immediate solutions; and to provide and maintain sensitive, ongoing guidance throughout a transition. 

As much as it is the duty and responsibility of family enterprise advisors to initiate and guide these early discussions, it is also recommended they act multilaterally and collaboratively, with the best interest of the family at top of mind at all times. This is a philosophy that if adopted can deepen the trust and respect between family enterprise advisors and their business family clients. It is this foundation that the following recommendations are presented, and deemed relevant to designated family enterprise advisors from all disciplines, no matter their area of expertise.

Continuity planning, or succession, is not a one-size-fits-all solution, and in order for it to be successful, it undoubtedly involves several advising professionals with different areas of (potentially overlapping) expertise to support the family system through a transition process, not an event. It is the inherent nature of family enterprise advising that makes it multi-disciplinary, complex and at times, challenging and humbling for a professional of any background. 


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