Change! Can Your Family Business Handle It?

Contrary to commonly held beliefs, entrepreneurs are not all cut from the same cloth.  We bring all manner of experience and motivations to the effort of creating something, a business, that will pay our bills, provide for our families and if we work hard, minimize miscalculations and enjoy just a bit of luck might grow into something we pass along as part of our legacy or is capable of providing for successive generations when we exit.

The thing is, many of us who are considering succession now, built our businesses when globalism was emerging, when advanced technology was not ubiquitous and when competition from some lad in Bangladesh with a laptop was not to be feared (The World is Flat, Tom Friedman).  The control we enjoyed or thought we enjoyed, is slipping away.  Now that change we loathe is happening at an ever increasing rate.  Can we handle it?  Will we handle it?

If we are to maximize the value of our businesses for sale or position them so the next generation can leverage our success and expand on it, we must be attentive to challenging the status quo.  We must embrace change and manage it within our organizations! Nothing is more dangerous than to complacently do what we’ve always done, because it’s what we know works. So how do we do that?

When I was a member of Vistage  Chip Webster, one of my chairs and other thought leaders I have known encouraged and stressed the importance of growth through inquiry.  The growth they referred to was both personal and specific to growing my business.  They didn’t advocate abandoning what had been working only that we should question our answers.  The groups we were a part of were diversified.  No one business was the same but remarkably all of us at some level were challenged by the same things.  Whether the topic was on how to improve company culture or the best ways to effectively use financial statements for decision-making, the collective wisdom in the room drilled home the point that different perspectives on the same topic had tremendous value.

Some interesting studies from PwC and McKinsey & Company, solid thought leaders in their own right, turn old cornerstone principles of innovation and change management on their head.  Allocating more of the budget to R&D or embracing change management as we knew it are not resulting in outlying financial performance or market leadership.  Who knew!?  The most successful firms in today’s environment are applying an old saw “continuous improvement” with renewed vigor and discipline. They are creating company cultures and practices that make it part of who they are.

It turns out, according to these studies, those firms most successful at innovation and adaptive behaviors practice some mix of effective communication, active leadership and continuous improvement (article).  It turns out that organizational alignment, relinquishing the notion of control and committing to an understanding that everything must remain open to change has a greater impact on prosperity when the world around us is changing rapidly.

Do you have a diversified group to huddle with?  Are you questioning your answers?  Do you have a cultural mindset that has hardwired into your organization the idea that change is inevitable and together we can prevail where others fail?  If not, let’s talk.