The Need For Open Dialogue With Your Kids
20th June 2015 Paul Andrews
It's Father’s Day again and Gary Deans, KPMG’s Head of Family Business, advises family business owners to have open discussions about their succession plans
Fathers and their children tend to come together at this time of year and when it comes to family businesses and topics of conversation, there is one that causes more angst than most, succession planning. Does the current generation plan to discuss it? Are they willing to actually step down? Is the next generation ready, willing and able to take up the challenge? Which of the next generation do we choose? How do I tell Dad that I don't want to take on the family firm?
Lots of emotional questions come to the fore and around Father's Day, as families get together, it can be difficult to avoid touching on some of these difficult conversations. But as Gary Deans, Head of Family Business at KPMG advises, it is better to have open discussions and honest dialogue to help avoid family rifts.
As Gary explains, “This Father’s Day some dads who own their family business will be considering its future and wrestling with balancing what’s best for the business with their equal love of their children."
“Often a family business owner has a strong instinct as to which of their children has the greatest potential as a future leader of the enterprise but, for emotional reasons, they don’t feel able to consider succession plans that explore this."
“A preoccupation with equality is not necessarily a virtue in succession planning; sometimes outgoing leaders need to get over the idea that everyone must receive an equal share of the business. Not only is such a strategy often not in the best interests of the company –but it may not even be what is wanted by all the siblings."
“It’s important to discuss even the most embryonic plans with all the family long before they are put it into effect. By opening up a dialogue early on with all concerned, dad can find out what everyone’s thoughts, ambitions and dreams are on the matter and work towards making decisions without hurting feelings and causing family rifts."
“Speaking openly with the children is usually the best way ascertain whether each has the same degree of interest in the business and hopes about their respective roles in its future."
“It’s also well worth focusing on the fact that management and ownership don’t necessarily have to go hand in hand. For some, the right route forward will be to give over management of the company to just one child – the one considered best equipped for the job – but to transfer equal shares of business ownership to all of the children," concludes Gary.