There are always challenges when a company is on the door step of transferring from one generation to another. Many companies often start with the legal side of the transfer but from my experience the first place to start is by gaining agreement across all generations on the business plan for the organization under the leadership of the incoming generation.
It’s natural that each family member in any generation will have their own perspective on how the business should run moving forward. It’s the companies that talk through those perspectives to gain agreement on one plan that will set their family up for prosperity for many generations to come. Developing a plan will lead to increased profitability which provides more options for the family and the company to work through any leadership or ownership transfer issues.
In the case of this client company, with the support of the third generation SM Advisors guided the fourth generation through the Stop Selling Vanilla Ice Cream Process to define the future vision, strategy and organizational structure for the company. This included the non-family members of the leadership team as well. Once the incoming fourth generation planning team completed the plan development phase of the process, they presented the plan and budget as a unified team to the shareholders/third generation.
Having the incoming generation develop, present and execute the plan with the support and approval of the outgoing generation has created significant results (financial and non-financial) for the company:
- It allowed the incoming generation to present their plan for the business to the outgoing generation
- It helped the outgoing generation to understand where the incoming generation is going to go with the business and have both parties agree on it.
- It allowed non-family members the opportunity to provide their input on how to improve the company. Their non-biased input brought insightful and incredible value to the planning process.
- It created a collective vision for the business that all family and non-family leadership team members agreed on. Having agreement on the vision gave the team members confidence to work through the smaller issues along the way.
- It gave family members and non-family members the ability to drop the “past pack” of issues and heal relationships. It provided a fresh start after 100 years.
- It is allowing the outgoing generation to hold the incoming generation accountable to a plan they developed.
- The company has experienced a substantial increase in profitability since starting the planning process.
- The family is building a foundation for multi-generational prosperity for years to come.
- For the first time in 100 years, three generations are unified around a plan.