Click to Print

Good Company

Are you next in line to own the family business? Don't go it alone--peer groups can help.
May 1, 2000

If you're about to take over a family business and worried that those peer-to-peer meetings of the "next generation" exist for airing complaints about the senior generation, relax. "Dealing with family issues is the thread, but the meetings don't focus on beating up on dad," says Stephen Henry, a member of Goshen College's Next Generation Roundtable in Goshen, Indiana, and president of Robert Henry Corp., a general contracting firm in South Bend, Indiana.

So what do these meetings cover? "Family business issues are part of the picture, but in our group, substantive issues take center stage," says Stephen McClure, a family business advisor in South Bend and facilitator of Goshen's Next Generation Roundtable. Goshen's Next Generation peers have picked up ideas from each other and outside experts on how to lower health-care costs, recover from disasters and even establish effective boards of outside advisors.

"When [our] next-generation affinity group first formed about three years ago, the members were trying to get their arms around what their role was in the family business and in the family," says Nina Paul, executive director at American University's Family Business Forum in Washington, DC. "About a year later, it was as if the group felt, 'We've had enough family talk,' and they started to invite experts to share information on substantive issues at their bimonthly meetings. Recent meetings covered [such topics as] employee benefits, increasing motivation among employees, writing business plans and Internet marketing."

Each next-generation group operates differently, depending on the wishes of its members. Two expectations important to every group, however, are confidentiality and participation. If the discussions aren't confidential, people won't feel comfortable enough to share information about the issues they or their businesses are facing. To be effective, group members are expected to show up at meetings and participate. That doesn't mean having all the answers; it means getting involved. "A group works best when its members are effective contributors," says McClure.

Benefits of Belonging

"People think that by joining any group, they're admitting to a certain amount of dysfunction," says Paul. "So they're leery about the idea." But once there, she says, they realize that the other participants are successful people who want to learn more about themselves and family business practices in a trusting environment.

Still not sure if it's right for you? Consider the advantages of joining a next-generation peer group:

For John Yarger, next in line for ownership of North American Signs, a third-generation South Bend, Indiana, sign-making business run by his father and uncle, just hearing what other people are doing in terms of negotiating with the senior generation has been enlightening. "And I've gleaned a lot of insight into issues we hadn't even thought about, like developing an active board of advisors," he says.

Finding a Group

The time to join a next-generation round table is when things are going well, says Paul. "Future family business leaders can learn more about the governance process of family businesses when they're not in crisis," she says. But you must be willing to commit time to the group-that's the only way to build trust and confidence among participants and become a contributing member.

Next-generation round tables are frequently sponsored by family business programs affiliated with universities-which means the family might have to be members of the program for its junior members to participate in them. But that's not always the case, so check out the family business program near you. If there's no such group around, consider asking a family business advisor whether he or she would like to facilitate a next-generation group, or form your own. The process of clarifying one's own future and learning about other family businesses outside of earshot of your own could prove invaluable.

Patricia Schiff Estess writes family business histories and is the author of two books: Managing Alternative Work Arrangements (Crisp Publishing) and Money Advice for Your Successful Remarriage (Betterway Press).