Why the coach is the right resource for a successful generational change in a family business

Generation change is a key moment in the life of a family business: it can determine its future success as well as an unexpected decline.
There are many factors that come into play in generational change but can be summarized in two macro categories: rational factors and emotional factors.
The problem is that in a family business these factors are interconnected: it is also difficult for those who are involved to see these interconnections, recognize them, and try to manage them.

In order to manage a generational change in a family business it is therefore necessary to have an external intervention: a coach is the person who can best help the actors involved to find a balance between rational and emotional factors without having one having the upper hand over the other.

What are the key steps of a generational change in a family business?
1. The outgoing generation must realize the need for change
2. The outgoing generation must be willing to accept the change
3. The Incoming generation must feel that they have the skills to manage the company
4. These capabilities must be recognized to the incoming generation both from the outgoing generation and from the rest of the company
5. The incoming generation must be ready to accept the change
6. Both generations together must define the process that leads to the generational change

  1. How long will the transition phase last
  2. What will the roles of 2 generations be during the transition phase
  3. What are the indicators and goals to be achieved in the transition phase to measure the success of the transition itself
  4. How will these indicators be monitored together for an a priori defined period
  5. What will be the role of the outgoing generation at the end of the transition period
  6. The transition phase begins and continues with the appropriate monitoring moments
  7. The two generations decide that the transition is over and the generational change has taken place.

It seems a fairly straightforward process: why sometimes does it not start or other times it starts with reputable consultants and then it derails on the way ?

It is evident that in each of these steps there is a very high risk of being either too rational or too emotional, reaching potentially disastrous conclusions for the company.

It is necessary to find a proper balance, but which one?

There is no proper a priori balance, there is no “best practice” that a consultant can bring: the right balance is right for the family members involved and allows to bring out the best resources inherent in each member of the family involved in the process.

That’s why the coach’s maieutic approach is the one that allows to handle the generational change process by implicating the rational and emotional aspects: the coach has the skills to question emotional reasoning in a rational environment and at the same time to maintain a rational approach when emotions have the upper hand, giving support in the most critical moments, keeping the bar straight in the generational change process.