DEMBINSKI LAW OFFICE
DEMBINSKI LAW OFFICE

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Dembinski Law Office

240 Bradley St

New Haven CT,  06510

Phone: 203 623-3811 203 623-3811

Fax: (203) 287-9265

Email: TJD@demlaw.org

 

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Leadership Transitions

If you value the company you've built, and want to see it survive for another generation, it is important to start to plan for the transition to the next generation of leaders earlier than you might think necessary. According to the Family Business Institute, only 30% of family-owned businesses survive into a second generation, 12% make it to a third generation and 3% get to a fourth generation and beyond. For more information go to

http://www.familybusinessinstitute.com/index.php/Succession-Planning/ 

 

One of my father's favorite sayings was, "making no decision is still making a decision." The no-decision Decision is one my own family put into practice with nearly disastrous results.

 

At M.J. Daly, when I returned in 1985, after four generations of poor planning, half of the stock in the company was owned by inactive family members and all but a small percentage of the remainder was held in trust. This was neither a stable ownership structure nor one that suited the needs of our bank and bonding company which both insisted on personal guarantees to secure the credit extended.

 

I enjoy telling the story of how we survived (call me if you are interested) but the one lesson I draw from the experience is simple: don't wait for a crisis to spur you to plan for the future. Do it when you can afford not to think about it. Do it now.

 

But I'm sympathetic to the reasons why the no-decision Decision is often the option taken when a business owner thinks about the future for his or her firm. Planning for the future, especially in the context of a family business, can be emotionally fraught. Hard decisions need to be made that often involve people for whom one feels most tender. And in the still macho world of construction, grappling with emotions is awkward, generally avoided and not a skill often practiced. All too often complicated discussions become emotionally charged and things are said that are almost instantly regretted - we all know the lasting sting of a few ill-chosen words.

 

But difficult questions do not answer themselves - who will lead a company into the future? How much of a safety net will the family provide? For how long? And what if the best candidate for the role of future leader either is not a family member or there is no family member available?

 

These questions can be ignored and Fate trusted to smile - or a methodical, facilitated discussion can be attempted, one that does not trust to Fate and recognizes that "it's just a business." 

 

If I can help with your leadership questions, please call me and we'll discuss your goals and next steps. 

 

 

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