One of the biggest risks in the economy is the fumbled hand-off of family businesses from one generation to the next. The expession “shirtsleeves to shirtsleeves in three generations” sums this up nicely: the first generation builds a successful business, the second generation carries on in a diminished way, and the third generation inherits a mess and then starts over again.
Imagine the benefits to the Canadian economy if we could improve the success rate of family-business succession. Important companies and capital pools could be preserved, jobs maintained, and successful business practices and innovations shared for the future.
Better planning, documentation and family communication are among the usual remedies prescribed to relieve the succession crisis. But none address the real problem. As the patriarch of one business family once said to me, “The hardest part is figuring out whether your children are worthy or capable of following in your business footsteps.” Meanwhile, his children had different thoughts: “Your footsteps are no longer heading in the right direction. Thanks for the years of building your legacy, but please take a back seat.”
Internships and family councils won’t bridge this generation gap.
But now a Montreal foundation has come up with an innovative new approach to help business families come together. And non-family business owners find this a model for relieving their own growth and succession bottlenecks.
Read more here: A novel way to solve the business succession crisis