Tag Archives: planning

Succession is Passing on Enterprise Capital

What Does It Look Like to You?

Usually, succession planning is done with the assumption that the family intends to pass a singular business to the next generation. But, in an article published in Family Business magazine (Summer, 2011, pp. 60-62), Greg McCann and Rich Morris encourage a different construct. Proposed is the thought that, instead of passing The Business down, the capital can be passed along. By capital, they mean:

  • Values
  • Knowledge
  • Professional Team
  • Financial Assets &
  • Family Legacy

Their perception is based on macro trends in the business world regarding innovation and the implications for privately-held (family-owned specifically) businesses in particular. Trends that are referenced include globalization, technology, and diversification. Combined, these trends necessitate greater innovation than ever before to stay competitive. “Traditionally, family enterprise has been thought of as three generations operating one business. In today’s marketplace, it’s wise to think about three business concepts for each generation to come.” (McCann & Morris)

What do they mean about three business concepts for each generation? The Family Firm Institute, in a study funded by FFI member Joe Goodman on family business longevity, found the following:

  • 10.6% of the families studied controlled only one business.
  • 21.3% of the families controlled five or more businesses.
  • Over the history of the participating families, they had owned an average of 6.1 firms.
  • The families added an average of 2.7 firms through M&A.
  • Over the history of the families’ business activity, their main industry shifted an average of 2.1 times.
  • Over the families’ history, they spun off an average of 1.5 companies.

If privately owned businesses can take note of these facts, different strategic plans will be developed. More focus on the entrepreneurial spirit of the founder, awareness of market shifts, adaptability, and resource stewardship will yield strong results that help make smooth succession a more realistic goal.

Crushing the Competition

Prize for the Winner

Whether your disposition tends toward competitiveness or no, as business organizations we need to outperform others in our industry. To not do so puts all stakeholders at risk–employees, investors, lenders, customers, vendors, etc. But, when a headline like the one above is read, it can cause some to bristle. Why is that? Probably because we have all seen the abusive pursuit of a goal cause collateral damage. And, yet, “crush” seems a little strong…

A conference of HR professionals that concluded in Raleigh today (#12hrmc) carried the above title. One of the speakers made the insightful comment that, while larger companies can boast greater revenues or number of employees, but  “no one can take away a competitive advantage of preferred culture.” This sentiment is great news for managers in organizations that are playing ‘catch up.’ If you find yourself in just such a situation, read on! There’s opportunity to be explored, but it may just require a reinvention of yourself and the structure around you. Innovation will be key to repositioning. Jacqueline Byrd (@creatrixinc) describes the type of innovation required as a combination of creativity and risk taking.

Byrd isolates four key components of creativity: ambiguity, independence, inner-directedness, and uniqueness. Ambiguity describes an employee’s ability to work without clear input. Independence is the competency wherein the individual can work in solitude and make progress. “Tuning in” to your inner voice to find calling is inner-directedness. Differentiation from one’s self and others defines uniqueness.

Risk-taking competencies include: authenticity, resilience, and self-acceptance. Authenticity equates to speaking what is top of mind, yet not necessarily harsh or brash. Believing everything will work out if we but persist is resilience. Those who can see shortcomings and lack of success as “learning” rather than “failure” are masters of self-acceptance.

Organizations that foster creativity and risk-taking, learn how to build innovation systems into their DNA, and celebrate both success and attempts that do not succeed are rare. They usually are very effective in:

  • attracting top talent
  • offering products and services with the “wow” factor, and
  • carving out a competitive advantage that can be sustained

If you work in a culture that resembles this pattern, chances are very good that you are crushing your competition–even if that is not your personality;)