Keep the transition smooth by making changes slowly.
Stephen Covey could have been thinking about family businesses when he said that “the key to the ability to change is a changeless sense of who you are, what you are about and what you value.”
When the history of your business stretches back to the early part of the 20th century, change can come—but it might come slowly. And when your business is a family-owned operation in its fourth generation of ownership, change definitely should come with an awareness and respect of what the family business is about and what it values.
Across central Ohio, younger generations of owners are taking on more responsibility for managing family-owned businesses. It’s likely that these younger owners are coming to work with ideas for updates and changes to ready the business for the next 100 years. But these same young owners should remember a few things before embarking on those changes:When approaching a major change, such as remodeling the offices, respect the fact that the older generation of owners—who are closer to retirement—might have a much lower tolerance toward taking on debt. Yes, it might be easier to borrow money to complete a six-figure remodeling job, but owners must balance that with the concerns of older owners who see the cost but not any relatable sense of return for them. The solution might mean spreading the project and its costs out over many years. It might mean tackling some of the work in a DIY fashion to save money. And, it might mean a combination of both. Be patient, kind and respect the feelings of the older generation of owners. When you look at the avocado green carpet and wood paneling, you see the 1970s in full force; when the older generation sees it, they might recall working alongside their own father to lay that carpet or hang that paneling. When you want to replace an old piece of equipment, they might remember learning how to operate that machine from their own grandfather, the one who founded the company. Being patient and moving slowly does mean that change won’t happen overnight, but it will be a much more pleasant experience for everyone if all of the owners listen to one another and respect one another’s feelings and experience. Include the older generation in the decisions. Whether you are remodeling or constructing a new building, request their input on finishes, colors, design. Also realize that the family history is important to the older generation, so younger owners should find a way through the changes to honor the company’s history— remember that idea of minding that changeless sense of who you are. If, for example, you own a business that manufactures a product, perhaps you can create a wall that memorializes the family ownership history. In this way, you can also showcase the new technology that you use to create the same product that the founder did in 1936; you just do it in a different way now. In taking on a new project, do your homework. Take care of the early legwork so that when you propose a major new project, you at least have a theoretical idea of the cost-benefit ratio to getting the project off the ground. If the other owners have questions and you don’t have the answers, you aren’t ready to move ahead. Whether you are thinking of remodeling, building a new headquarters or acquiring another company, listen to the older generation of owners. If they have concerns about the move, their reluctance might be coming from experience and a “gut” feeling, rather than a plain refusal to spend money. Listen to their questions. Have a discussion. Their wisdom and experience might be telling you that now is just not the right time to expand. It doesn’t mean your idea is off the table. It just means it’s tabled for the moment.
Finally, for the younger generation of owners, the best advice might be to plan where you want to go and set your sights on the future. But never forget to learn from the past.
Jonathan Modlich is vice president of Modlich Monument Company, which was founded in 1936. Jonathan, a fourth-generation owner, works alongside his father Dan and his uncle, Jerry, who are the other two co-owners and are grandsons of the company’s founder, Linus Modlich.