“In the multitude of counselors (Advisors) there is safety.” Proverbs 11:14
There is safety in numbers. We have all heard this before. However, it is not entirely true. The safety comes from being with the right people, those who can lift us up, teach us, guide us, and lead us. When we trust the people around us, and they trust us, that is where the safety is found.
In your family business, you have had success because you know your business, your customers, your industry, and you have established values and procedures that work for you and your customers.
However, there comes a time for each of us when we realize that we do not know everything, and that we determine that reaching out to others will be the best way to gain the knowledge and expertise that we lack. We seek trusted advisors in all aspects of our lives, so why wouldn’t we do the same in the area that creates our livelihood?
Over 70% of businesses in the United States are family owned and operated. Of these family businesses, close to 75% do not successfully pass from the founding generation to the next. The percentages are even more alarming as we look at companies successfully making it to generation 3, and beyond.
One reason why family businesses do not successfully pass from one generation to the next is that there simply are not members of the next generation, for whatever reason, who are available or interested in running the business. Sometimes, the lack of expertise or industry knowledge prevents the existing leadership to have confidence in the next generation, as well.
In just about all cases, it is suggested that family businesses consider finding resources outside of the family to assist in the leadership of the company. This doesn’t necessarily mean that you should bring in a non-family CEO, but you should always be willing and open to bringing in someone from the outside to work in key positions where the family may not have the right education and experience.
The most successful family businesses in the world have a lot in common, but one thing you will find consistent in every world class family business is that they know that they do not know everything, and that there is experience out there beyond their family that can make a tremendous impact on the business.
There are organizations, consultants, associations, and service providers who specialize in working with family-owned enterprises, who have years of experience in working with the best family companies in the world. These trusted advisors can be found at your bank, CPA firm, law firm, Vistage, Family Business Centers like ours at Cal State Fullerton, The Family Business Consulting Group, etc. They can even be found in other companies, as well.
Again the safety that can be found in working with people, and experts, you can trust could be the turning point for your family, and your business.
Another major point to consider is when to reach outside of your family for expertise on a day-to-day basis in your company. In all likelihood, your family does not have all of the experience necessary to take your company to the next level.
“The turning point in our business”, states Anna’s Linens founder and CEO Alan Gladstone, “was when we realized that we did not know everything there was to know about our industry, about retail, and about our marketplace. About 10 years ago, we began bringing in experts in retail, and in the geographic areas where we do business.” Anna’s Linens, a wildly successful family business headquartered in Costa Mesa, CA, has 312 stores scattered around the United States, including stores in Puerto Rico. “When we came to the conclusion that there was more expertise outside of our family, and began to tap into that knowledge, we grew faster and healthier than at any time in our company’s 36 year history.”
Anna’s Linens was the 2007 Orange County Family Business of the Year, just 3 years after turning to experts outside of their family.
Giving up any control in your company is very tough. However, one of the greatest strengths of any leader is humility. Being able to not only see where needs are not being met by the current family leadership, but then stepping outside of the family to find the talent needed to take your company to the next level, is a great demonstration of this humility.
In addition to bringing in outside experts to work in the company, as Gladstone has done with Anna’s Linens, the most successful family companies in the world also reach out to experts to sit on their advisory boards, as consultants, or as previously mentioned, they join with other family businesses in organizations such as Vistage, their local Chamber of Commerce or Rotary, or find a university or organization with a Center for Family Business, where owners of family companies come together to share ideas, issues, and consult with one another.
The bottom line is to recognize that you do not know everything there is to know about your industry, and that there are experts, even in other industries, who have a wealth of knowledge who can be a great resource to you. For years, I have worked with companies in a variety of industries, and time after time, I hear stories from leaders of family organizations tell me that the best ideas they have received to make the biggest impact on their company came from someone not only outside of their company, but from a completely different industry, as well.
Remember, there is safety in numbers, as long as the numbers consist of people we trust, and who trust us.
For assistance in finding trusted resources, whether it is to set up an advisory board, join a peer group, or meet with other family businesses, feel free to reach out to me at 657-278-4182, firstname.lastname@example.org, or visit us at http://www.csuffamilybusiness.com.