The 2010s can’t arrive soon enough. The 2000s—which included the deadliest terrorist attack ever on U.S. soil, followed by two new wars; devastating hurricanes, tsunamis and earthquakes that wreaked havoc across the globe; and a crippling recession, among other nightmares—could hardly be considered a golden age. What can family business owners expect in the years ahead, and what have we learned from the recent past?
Given that many highly touted experts failed to predict and/or prevent the major world-altering events of the 2000s, I dare not speculate on where we’ll all be ten years hence. But if we’ve learned nothing else from the previous decade, we’ve certainly learned this: Whatever the current circumstances are, they are likely to change, perhaps dramatically. The only way to cope in a world of uncertainty is to be able to adapt—and, if necessary, to adapt quickly.
There are several steps you can take to put your family and your business in a good position to face whatever might transpire:
1. Review your strategic plan often and revise it when needed. It’s especially important to continually assess the assumptions on which your plan is based and to consider a variety of “what-if” scenarios.
The family enterprises that are best prepared to face an uncertain future are those that put all options on the table when reviewing their strategy. This should include moving away from the legacy business, an option that many families consider unthinkable but may be the most viable way to keep the family in business together. Consider the case of Petz Enterprises Inc. (PEI) of Tracy, Calif., profiled by Deanne Stone in Family Business’s Spring 2006 issue. The Petz family started out as farmers; today, they provide technology and services for consumers and tax professionals. Alternative strategies to be considered might even include selling the operating company. Family collaboration might continue in wealth management or philanthropy.
2. Ensure that your chosen successor is the person most capable of guiding your company in an uncertain future. The next CEO will likely need a completely different set of skills from those you need to lead your company today. Don’t look for a successor who can simply follow in your footsteps—designate someone, either within or outside the family, who is best able to adapt to changing circumstances.
3. Remember that material wealth is not the true source of your family’s strength. Courage and hard work helped many multigenerational family enterprises to adapt and survive during times of hardship and uncertainty. So did flexibility and resilience—traits that are lacking in many non-family businesses.
None of this is rocket science, of course. But consider how many families failed to heed these simple messages in the decade that just ended.