Passing down a family-owned LBM business is a common practice. However, transferring business ownership within a family is a delicate process fraught with
difficulties. In fact, a 2008 University of North Carolina at Asheville study showed that approximately 70% of all family businesses fail to transition successfully from one generation to the next. Given the stark differences in principles and beliefs between older owners and the new crop of young leaders, I believe this failure rate is actually going to go up.
The business ideals and values of the Traditionalists and Baby Boomers are radically different from those of Generation X and Millennials. In fact, I strongly believe we are in the midst of a structural break—a time when past patterns and trends stop and new patterns and trends begin. As we transition away
from the ideals of the Traditionalist and Baby Boomer generations to those of the Generation X and Millennial generations, we are seeing many trends and patterns change…and they may be changing for good.
Traditionalists generally identify themselves through their strong work ethic and values. Their children, the Baby Boomer generation, carry on their strong work ethic. These generations live to work. They identify themselves through their careers and material wealth. They are very loyal to their jobs,
and rarely switch careers.
Generation X and Millennials also tend to be more rebellious in their approach to work and have rejected the traditional workplace. These younger generations
believe in leveraging technology to work smarter, instead of harder. They are not obsessed with financial success, and are instead seeking a more balanced life. As a result, companies of all sizes are seeing workplace friction between older and younger generations in the workplace. Many older workers are rejecting the management and leadership styles of their younger counterparts. They want them to pay their dues and work long hours. The younger generations are rejecting these demands and are pushing to take the reins of the company before they have the necessary knowledge and experience.
These sharp differences in ideals and philosophies can threaten succession planning and the long-term viability of family-owned businesses. How can you
overcome these differences and improve the odds of a successful transition?
My advice to the parents is to be proactive in the face of change. Change is inevitable and the norm. Don’t view change as something that is “done to
you.” Instead, directly influence and manage your responses to the inevitable changes in your company. Understand that there are going to be fundamental
differences between generations and do your best to embrace these differences. This isn’t a matter of being right or wrong. They are simply different schools