How to Preserve the Experiences of Your Family
By Scott Fithian
time comes to transfer a family business to the next generation, most
companies focus on the material aspects of the event. They worry about
transfer taxes and whether or not they have the financial resources to
survive. But besides the tangible resources of the business, what
about all the experience that the founding generation takes with them?
How do you preserve that?
accumulated through life create perspective. When someone starts the
process of building a business, they experience the challenges
firsthand. The ups and downs, the successes and failures, and the fear
of scarcity build character in the first generation that helps them
manage the reality of having significant wealth. Yet the wisdom,
experience, values, attitudes, and preferences that a family business
is built on usually leave with the founding generations.
example, if one generation learns how to fish because they’re
starving, they develop very fine fishing skills. But if they catch so
many fish that the next generation doesn’t have to catch any, then
by the time the fish supply runs out and the third generation comes
along, no one will know how to fish. The same trend occurs in family
businesses. The first generation works hard and struggles to build the
business, the next generation enjoys the wealth, and the third loses
If you can
preserve those rich experiences, succeeding generations will have a
better understanding of the value system that emerged from them, and
therefore a better potential to succeed with the resources that are
passed on to them. How can you preserve the experiences that built
your family business? Use the following five step process to pass the
perspective and wisdom down through the generations.
people live life, rather than observe it. Even those who have had
rich, rewarding lives sometimes fail to recognize the wisdom in their
experiences. They believe that they are no different from anyone else
and that their past accomplishments don’t matter. But the first step
of passing perspective through a family business transfer is to
overcome this modesty and reflect on all your experiences.
you been? What mistakes did you make? What unique experiences have you
had? Stop, sit down, look back on all your accomplishments, and
understand how truly important they are to the future of your
you’ve reflected on your experiences, you need to look at what your
experiences mean. What did you learn from your successes? What did you
learn from your mistakes? What wisdom, insight, and perspective have
you gained? What have you learned about financial management, decision
making, and forging business relationships?
learning experiences have formed the way you conduct your business,
and they can help prevent the future generations from making the same
mistakes you made in the past.
see what you have learned through your experiences, you have to
document everything. You can make this as elaborate as you want. For
some families, the documentation can be as simple as a letter from Mom
and Dad to the kids or succeeding generation. Others use an audio tape
or video that talks about their experiences and what’s important to
them. And some actually produce a documentary on the history of the
business. Regardless of what documentation method you choose, make
sure it speaks to the succeeding generation and includes everything
step is to communicate all this information and history to the people
who need to know it. Again, this step can be as elaborate as you want.
You can gather everyone around the dinner table, plan a special family
meeting, or organize a retreat with the purpose of talking through
also consider a vision trip where you create an experience for
everyone to do together that will help manifest the family business
values. Whether you plan an outdoor adventure that facilitates
teamwork or a series of challenges that stimulate learning, a vision
trip can be an exciting way to bring everyone together and communicate
your values and wisdom.
you’ve successfully worked through this process, you must repeat it
throughout the lifetime of your business. If the founding generation
takes the time to understand and talk about where they have been, then
the current generation lives in those past experiences. Encourage and
inspire future generations to participate in the process as well.
This process should become a living document that builds on
each generation, because every family member has his or her own unique
experiences that create the business. Therefore, each generation
should be encouraged to follow this process and contribute their
wisdom to the story. This continuation creates a framework where the
family considers the stewardship of this story just as crucial a
component in their wealth transfer plans as they do the financial
resources they have accumulated along the way.
the Past Long into the Future:
stereotypical three-generation lifespan of a family business is rooted
in the loss of perspective that occurs in the transfer from one
generation to the next. But your family business can overcome this
challenge by preserving its history and creating a context that
respects the past while providing liberty to the current generation.
framework for decision making shouldn’t bind the current generation
to a set of rules, but rather empower them with the lessons learned by
previous generations and show how those past experiences can benefit
them. It should inspire future generations to participate and grow the
family business, rather than just work there because that’s where
the money is or that’s where Mom and Dad worked.
use this process to preserve the perspective and history in your
transfer plans, the future generations will know where the family
business came from and all the experiences that made it succeed, which
will help them carry the success into the future.
Scott C. Fithian is recognized throughout the U.S.
as a pioneer in the tools and
methodology of Values-Based Planning.
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