Help! No one is qualified to take over the business—Part 1

A reader whom I will call Susan writes:   My parents founded our family business, a buildings company, almost 30 years ago.  When my father passed away, we sought the help of a consultant regarding a family constitution, but because of the cost, we did not proceed.  My mom was the one who mostly worked in the business, but now she is old and ill, and the company is in trouble.

Not one of us children was trained to manage the business, so no one wants to take over.  I do not want her to work anymore, but nobody knows the business as she does or can rally the troops like she can.  She has her own way of doing things.  My siblings are unwilling to put their talent and time into the business even if we all understand that this is important to us and an important source of income.

The business was practically run by a senior manager (unofficial title because we don’t really have a clear organizational chart) until he started contracting on his own, which meant he had little time for our projects.  The projects are poorly managed, the project managers (unofficial also) are not qualified to do the job of managing.

I know we have little time left but I do not know where to start.  My mom wants me to take over everything just like that.  This is unrealistic.  I am open to having a consultant “fix” our family business as I find that a simple thing like gathering everyone for a meeting is so difficult.  It feels like nothing gets done even if our meetings last for hours.  Having an outsider to tell us what our problems are, to provide some structure, to follow up on what should be done, might help.

Where do we start? Should we get a consultant? I think now our problems are beyond the family council and constitution.

My reply

I am sorry to hear about your troubles, but sadly, they are not unique.  Having a family constitution (which includes structures like a family council) is supposed to help prevent, minimize, or anticipate those problems, and frankly, I wish you had invested in that years ago.
But let us focus on the urgency of your problems now.  If it is hard to gather all of you for a meeting, and if your meetings are not productive, then there is no feasible way to create a family council or agree on the provisions of the constitution at this point.  Whatever consultants you go for should tell you this.  You are right:  now is NOT the time to do a family constitution (see “Help!  Our constitution is not enough,” Feb. 6, 2015).

What you need most is to agree, as a family, on the wisest course to pursue.  You can always try again to discuss issues among yourselves (follow the guidelines in “How to communicate effectively,” Jan. 3, 2014).  Keep in mind that listening is even more important than speaking, and that everyone needs to feel that they are heard.

It is clear that your family does not communicate well with each other.  Is it too late for you to start now?  I would rather be optimistic—since you are not (yet) at each other’s throats, you are not (yet) fighting over the inheritance, you are not (yet) suing each other in court, I believe that if all of you sincerely try, you can come to a consensus.  This does not mean that the decision is unanimous, or that everyone gets what he or she wants.  This means that whatever decision you eventually agree on, all of you feel it is the best for the family as a whole at that time and for the future.

If all of you try your best to communicate as effectively as you can, and meetings still drag on without tangible results, then yes, it will not hurt to ask a consultant to mediate issues.  The most helpful consultant in this regard would not be a business consultant, but rather a psychologist or counselor, one who can facilitate family dynamics.

Susan, I am happy that you are open to an outsider, and I hope your mother and your siblings feel the same way.  Effective facilitation is meant to help families communicate better in order to solve problems or finally craft a constitution.

Learn as much as possible

Susan, you say that even if all of you siblings understand the importance (financially) of keeping the family business afloat, none of you want to take over.  You say that no one is trained, and you have a point.  But the quick answer to that is:  unless your business is in rocket science, which needs decades of high-level professional expertise, then you do not really need lengthy training.

If you have the sincere desire to manage the business well, then right now, you (or a sibling) can take the time and effort to learn as much from your mother as you can.  Even if your senior manager has his own gigs, it is still worthwhile to learn as much from him, too.

By the way, why was the senior manager even permitted to do his own ventures?  Since he is technically the operations head of the company, which means as a professional (even if he is nonfamily), he should have dedicated himself 24/7 to his full-time job.  The exception would be if the agreement between him and your company was he would only work part-time, with a part-timer’s salary and benefits.

I suspect that the senior manager might have felt that whatever he is earning from your company is not enough for his needs.  Either his salary should have been raised, or he should have been let go, with the company run by a plethora of project managers (with your mother at the helm).  This is not ideal, but neither is the status quo.

(To be concluded next week)

Queena N. Lee-Chua is on the Board of Directors of Ateneo de Manila University’s Family Business Development Center.  Get her book “Successful Family Businesses” at the University Press (e-mail [email protected].). E-mail the author at [email protected].