Parents who want to nurture their children so they succeed in the family business should consider these suggestions from Lansberg, Handler and other family business consultants:
- Give children the opportunity to earn their stripes at another company before joining the family firm. The experience gives adult children knowledge of how the business world operates and a chance to explore their strengths and weaknesses without parental observation. It gives them confidence in their worth as employees who are not sons and daughters of owners, and credibility in the eyes of the parents' employees when they join the family business. It also gives them fresh ideas from other operations that might be useful in their parents' business.
- Provide supervision for all employees--whether or not they are offspring of the founder. Whenever possible, have someone other than the parent act as supervisor. In medium-sized to large companies, there's plenty of room for that to happen, and there are generally processes in place, such as annual or semiannual reviews, to objectively measure performance. But in smaller companies where that strategy is not always possible, Lansberg suggests focusing on the amount of work accomplished as a way of measuring performance.
Instead of the supervisor providing feedback, "use the person best equipped to judge the value of a service or a product--the client," says Lansberg. "But the owner must explain why he's asking the client to do this--[to help his offspring grow and succeed]--and, in a way, train the client as to how it can be done most effectively."
Obviously, the child should be completely aware of the situation and help set up the process by which the ongoing feedback takes place. "The client should understand that in no way will [anybody] suffer for an honest evaluation, and that the assessment will really be appreciated and helpful to the company and the offspring," says Lansberg.
- Don't give children too much responsibility. While offspring entering the business need some freedom in which to operate and prove themselves, don't give them more responsibility than they can handle or more authority than they are ready for. "Overcoming little challenges successfully perpetuates success," says Handler. One way to give a child freedom while still providing a safety net is to team him or her up on a project with a more seasoned employee, suggests Handler.
- Provide the tools for success. Make certain the child has all the necessary information to do the job. That includes access to financial information, experienced employees and you; membership in organizations, trade groups or peer groups; or anything else needed to accomplish the task.
- Don't rush in to save a child from making a mistake. "[Offspring] of a founder can't prove [themselves] unless they take risks," says Lansberg. And risk inherently implies the possibility of failure. Limit the extent of the failure by taking certain precautions, such as thoroughly discussing plans before taking any action, getting frequent progress updates, or setting limits on money or time expended (not to be exceeded without further discussion).
- Let children learn from failure. "When something doesn't turn out as expected, it warrants discussion and analysis between parent and child," says Handler. Sometimes the child does everything right, but something beyond his or her power goes wrong (such as unexpected government regulations sabotaging a terrific expansion plan). Sometimes the problem is too much free rein. Sometimes the offspring doesn't fulfill his or her responsibilities. Whatever the reasons, any discussion of the problem should include ways to correct it and establish new procedures so failure can pave the way to success.