Running a family business undoubtedly takes hard work, passion, and perseverance. But working alongside your own family also brings a whole slew of unique challenges, especially when it’s time for a family member from a younger generation to take over from a family member from an older generation.
An article from Inc. Magazine states that “according to the U.S. Bureau of the Census, about 90 percent of American businesses are family-owned or controlled,” and they “account for half of the nation's employment and half of [the] Gross National Product.” Family-run businesses are more common than you might think, and so are the challenges that come with it.
Family business generational transition, where one generation passes the reins down to the next, often causes some tension and a bit of chaos.
The story often sounds like this: A family member of an older generation poured their blood, sweat, and tears into building their own company, sometimes from nothing at all.
Now they’re ready to retire or step away from the daily hustle and grind, so they look to the people they trust the most, their family, to take over the business. A younger member of the family agrees to step into their shoes and lead operations.
As a digital native, the new owner looks to technology (like job management software) to help grow the business. Technology streamlines operations and eliminates manual processes that waste time and resources. They feel that implementing new technology is vital to running a family business in the modern age.
The former owner is skeptical of this new technology. They’re worried about losing touch with the very business principles (and loyal customers) that made the business successful in the first place. This family member has been running the business for years with great success and doesn’t think implementing new technology is the right move.
Your family business transition doesn’t have to be a constant battle of who knows best.
With good communication, cooperation, and patience, you can help your family business grow by implementing new technology while still honoring the past generation’s business foundation.
Read on and learn how to navigate the processes of implementing new technology and create a smoother family business generational transition.
Find out how involved your family member wants to be in new changes
Set clear role expectations for both yourself and your relative.
Understand and document exactly how they’d like to be involved in running the business and implementing new technology. This will eliminate miscommunication and tension, which otherwise makes it difficult to implement changes.
Opening this line of communication also builds trust. It demonstrates that you value their input and expertise from many years of experience.
Show them new technology's effect on the business - not its features
Your family member spent a lot of time discovering the best business practices for your unique industry.
They most likely had to do this without the help of the many technological resources we often take for granted. As a result, they won’t show much interest in the flashy features of new technology.
Instead, they want to know how implementing new technology will actually help the business both day-to-day and long term. Find a way to show them the “why” behind the new technology’s features versus the “what.”
If you’re unsure where to start, reach out to the sales representative for the new technology you’d like to implement.
They can offer great advice for how you can position new technology in a results-oriented way. Or, they can make sure that they do so when they demo the product to your family member.
Get buy-in from the rest of the team
Getting buy-in from the former leader is just the first step. You also need to make sure the rest of your team is on board too. They might be skeptical of implementing new technology or see new technology as a threat to their job.
Compound this with adjusting to the boss’s kin now in charge, and there’s plenty of reasons why they might complain to the former leader.
If the former boss finds out that the team’s loyal members aren’t happy with the new changes, there’s a risk they could step in and try to override your direction.
How do you avoid this chain of events? Show each team member how the technology will make their jobs easier, not take them away.
Once your team understands how these changes specifically help them in their role, they will be more likely to support bringing new technology on board.
With the entire team’s buy-in, your family member will be more likely to support implementing new technology as well.
Get references from similar business owners
Sometimes the former boss needs to hear how new technology helped someone else running a family business in the same industry.
This gives them a chance to hear honest feedback on the technology from someone they can relate to and who may be more impartial than you or a sales representative.
Ask some of your connections also running a family business or your family member’s trusted contacts for references of technology they use.
Likewise, ask for references and customer case studies from the contact or sales representative for the technology you’re thinking about implementing.
Share this feedback with your relative to add credibility, build trust, and combat any uncertainties.
Make time for your family member to learn how to use new technology
You’ve got everyone on board, signed up for new technology, and now it’s time to implement it.
It’s exciting to have a shiny new tool in your kit. As someone who likely grew up using many different types of technology, it can be easy to forget that your family member needs time to learn how to use any new technology.
Something that might be instinctual to you may take time for them to understand. The same goes for other members of the team.
Fight the impulse to rush implementing new technology. Remember that if you try to push things too quickly or pressure your relative into perfectly using the new technology on your timeline, you risk them becoming frustrated and shutting the whole thing down. Not just in their mind, but for the entire company too.
If that happens, you might find yourself losing the very technology you worked so hard to get while also damaging your credibility as the new leader.
Be patient with them as they learn how to work with your new technology.
Consider phased implementation, where your whole team learns about new technology one step at a time versus all at once, which can overwhelm them.
Finally, remember the heartbeat of your business: your people, especially the person who built it from the very beginning - no matter whether it is your parent, your grandparent, or someone else in your family tree.
Show them you honor and appreciate all of their hard work by giving them time to adjust to the family business generational transition and new technology.
You’ll be on your way to better business growth in no time, and most importantly, you and your relative can continue to build the business as one unified team.
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