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The Family Business

The Family Business. Challenges With Generational Change. The Family Business. Industry Makeup Contractors – Largely family owned and operated P&D – Mix of family owned, partnerships and large national firms Suppliers – Mix of family owned and large public companies. The Family Business.

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The Family Business

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  1. The Family Business Challenges With Generational Change

  2. The Family Business Industry Makeup Contractors – Largely family owned and operated P&D – Mix of family owned, partnerships and large national firms Suppliers – Mix of family owned and large public companies

  3. The Family Business Family Companies are the backbone of American Business But: 65% - 70% Don’t survive into the 2nd generation and 85% - 90% Don’t survive into the 3rd generation

  4. The Family Business Most experts chalk the failure rate up to the following: Conflict within the family Lack of management skills and preparation for successors Failure of prior generation to “let go” Little or no planning for the business Inadequate consideration and planning of the ownership Specific needs of the family members

  5. The Family Business Conflicting Interests:

  6. The Family Business An additional challenge: Geometric growth of shareholders and age differentials G1 – 1 shareholder/boss G2 – 3 shareholders – 6 years age difference - siblings G3 – 9 shareholders – 15 years age difference - cousins G4 – 27 shareholders – 25 years age difference – 2nd cousins

  7. The Family Business It’s not all bad though Family companies have other forces that keep them going Loyalty Strong family support systems Management continuity (if done right) Long training period Love and affection (you don’t hear that in the corporate world)

  8. The Family Business Advice from Gene Siciliano - Family Business Advisor Treat family members like any other senior manager Make a detailed list of the skills needed to succeed in your business Get formal training for successors in the areas they need training Rotate the assignments you successors get in the company Ask the honest opinion of others in assessing the performance and potential of your successors

  9. The Family Business What we’ve done at Curran Group to prepare for the next generational change Implemented regularly scheduled family meetings Get 4th, 5th and now 6th generation together at least 1x/year Developed policy on the employment of family members

  10. Policy on the Employment of Family Members Statement of Purpose: For Curran Group to remain strong and healthy it must be run and managed as a professional business. The operation and management must compare favorably to those businesses against which the company competes. Full time participation in the business will be addressed based upon sound and practical business practices. All family members of the next generation are invited to join the Company according to the following:

  11. Policy on the Employment of Family Members

  12. Policy on the Employment of Family Members Hiring Process: Once a family member makes his/her intentions known, an attempt will be made to match the family member’s skills and interest with an existing or future company need. Once a position is identified, an interview process will take place according to normal hiring procedures. The decision to offer employment to a family member will be made through normal operating channels and procedures. Assessment of a family member will be objective and an offer made for employment only in the circumstances that it is believed the family member is likely to succeed and the expected contribution of the family member is in the best long term interest of the Company.

  13. Policy on the Employment of Family Members Compensation: It is important that family members recognize and acknowledge that the rewards of ownership are separate from the rewards of employment. Employee compensation will be established at marketplace levels and will be commensurate with non-family members in like positions.

  14. Policy on the Employment of Family Members Outside Work Experience – When Required: Family members will be considered for employment in the Company following professional work experience outside the Company. This experience should be in a position similar or related to the type of work being pursued for the Company. This policy is designed to benefit the family member and the Company in the following ways:

  15. Policy on the Employment of Family Members Benefits to the Company: a. The employee brings experience and training from having worked in another environment. b. Other Company employees are more likely to respect and value the family member as a co-worker if he/she is able to demonstrate he/she has achieved success outside the business.

  16. Policy on the Employment of Family Members Benefits to the family member: a. Opportunity to gain experience and confidence as a productive employee where your family affiliation doesn’t matter. b. Builds self confidence that the employee can succeed outside the Company. c. Opportunity to seek out relevant skills and experience that will be contributed to the operation of the Company. d. Creates easier and more willing acceptance by non-family members at the Company.

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