Modernising a family business

Modernising a family business

There’s often tension among the family members involved in operating and growing an intergenerational business. The first generation creates the business and might be resistant to change. The next might seek a more modern approach, which requires change. Though a generalisation which doesn’t necessarily apply, this sort of environment can lead to butting heads.

 Modernising doesn’t necessarily require a change to the aspects of the business that have made it successful. Rather, the  acceptance of change might lie in effective communication and compromise between the different parties.

 Here’s a few tips that might be helpful:

1) Identifying what’s possible

 There’s a million things that might make a particular venue a point of attraction. If, for example, the venue makes an incredible product – and that product can only be made by a few people– then modernisation in the form of new venues, or ramping up the scale of that product production, may lead to conflict.

 Work with what’s possible. Perhaps that’s introducing a Point of Sale system, a new promotional campaign or a table management platform. The values and traditions remain the same, as do the roles of the people in the business. But, these new developments may help the venue become more efficient, or help to engage new/returning patrons.

 It might be small changes over time, rather than big ones quickly, that allow the business to modernise without upsetting staff and family members.

2) Explain what, and why changes are desired

 Tension within a family business might not be exacerbated because of the changes themselves. Rather, it’s the fact that they aren’t properly understood.

 This is corroborated by a PwC report, which states:

 “The main reason behind the emergence of conflict in family businesses is the lack of understanding and communication between the three family dimensions, namely the family, owners and management.”

 For the party pursuing modernisation, it’s important to thoroughly discuss – and make really clear – why they are passionate about changing certain elements of the business, and how it will benefit the venue. It’s also worth discussing the things that won’t change, why they will remain the same, and the strengths of the venue that have been built over time.

 Bringing everyone on board on that journey toward modernisation may help them fully understand, and appreciate the changes that are occurring.

3) What story is being told

 Family businesses involve history, and legacy. The business is typically something that the owners are incredibly proud of, and are hoping to pass on to the next generation. To the first generation, change might symbolise an erasure of something they have built.

 So, it will be important to emphasise how technology can help to bring more people in. Perhaps, that involves bringing more customers in to sample the product that they’ve created. Or, it might be using promotional outlets to advertise the people behind the business.

 These tools don’t necessarily represent a shift away from tradition. Rather, it can be a way to connect with new audiences.

4) Future plans

 The roots of conflict within a family business might boil down to a difference in vision. While both parties want the business to succeed, they might have a different perspective regarding what success looks like. For one party, success might not be measured in profitability. For the other, it might be more personal – for example, more responsibility and autonomy.

 Before change takes place, it’s important that these parties agree how they want the business to look in one year, or five, or 10. This might require forecasting – and a degree of compromise – as both parties discover what’s truly important to each other. Once this vision is determined – and everyone is on, or near the same page – then modernisation might be attainable.

 For any business, there is risk involved in change. But, when family is involved – and the relationships extend beyond the business – the potential for conflict is heightened. But, there’s risk involved in not moving forward. Without reaching a new audience, the business might stagnate or decline. For the party seeking modernisation, it’s important to clearly and sensitively communicate what, and why measures are being taken to modernise the venue, and why family members (and their roles in the business) are still valued in the process. Ensuring that everyone is on-board with these changes might help to make this process more successful for everyone involved.

Are you ready to modernise your family business? Speak to our team for some ideas

Contact us

Disclaimer: This guide is general in nature and does not take into account your individual circumstances. Before acting on any information, you should consider whether this is right for your business.