Help! No one is qualified to take over the business, Part 2

Last week, we looked at a reader’s family business dilemma. Susan says that her mother has been running the company for decades, but now that she is old and ill, none of the second generation wants to take over the business.

No one has been formally trained to handle things, and the top professional, a senior manager, who is supposed to deal with everyday operations, has his own sidelines to occupy him. The other junior professionals are not qualified to run the business.

An immediate problem though is the lack of effective communication among the siblings. Susan lamented that gathering everyone together for a meeting is difficult enough, and meetings, while lengthy, are not productive.

I had given tips on communicating well in a previous column (Jan. 3, 2014) and advised Susan to ensure that she and her siblings try as much as possible to ensure that the family comes to a sound decision on how to deal with the business. But if things do not improve, then a psychologist or facilitator is probably the best mediator for family sessions.

Susan says that one reason no one wants to take over the business is lack of training. While this may be true, I countered that unless their family business needs high-level technical expertise (which not many family businesses require), then they are capable of learning as much as they can from their mother or the Senior Manager.

I will now continue my response to Susan, addressing her directly for the rest of the column.

Dear Susan,

The underlying problem is not so much lack of training, but lack of interest and lack of motivation. I believe that very likely, you and your siblings are not totally (or even mainly) dependent on what the business earns. This means that each of you have your own career and/or your own source of family income.

While this is good news for you as individuals, it is a bad prognosis for the family business, since no one has any financial or emotional incentive to manage it.

It would be good to reflect deeply on what really matters, and how much you are willing to sacrifice for what you value. You say, “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.”

You say that the company is important to you and your siblings, and I believe you. But this sentiment should be expressed both with head and heart. Rationally, you may feel it a waste to let the company go under, while emotionally, you may in reality feel no attachment at all. Or emotionally, you may feel a sense of obligation to your parents to try to keep the business afloat, while rationally, you may in reality feel that it is too late to do so.

In what way is the family business important to you? Is it merely a cash cow? Or is it a source of pride? Is it viewed as a family legacy from your beloved parents? Did the company put you and your siblings through school, thus making it a source of nostalgia?

Or is the business important because it employs a lot of people who have been with you for ages, perhaps since the beginning? Is the company the main source of occupation for the town? Is it supporting a charity that is meaningful to your family in some way?

Head and heart

Right now, all of you are confused. But when your head and your heart are aligned, then it will be clearer to everyone which path to take.

Suppose you decide to give the business a fair chance. This means that you will sincerely try to make it viable. You may have to join training, shadow your mother or the Senior Manager, participate actively in decision making. You may have to divide the responsibilities among each other, since it seems impossible for one person to do what your mother has been doing, for as you say, “she has her own system.”

Merely trying is not a guarantee for success. Decide right now how much time and resources you can sincerely devote to this effort, and if at all possible, without impinging too much on your main line of work or source of income.

Perhaps it might be more realistic for you to be in the company for three days a week, while another trusted sibling manages things on the other days. Or the sibling with the most flexible schedule and/or most empathetic employer can take an unpaid leave for six months in order to devote energies to the business for a set period. If things don’t work out, at least you and your family know you have tried your best, and no one will feel guilty afterwards.

Suppose you as a family decide that the business is not worth maximum time and effort. Normally I would advise that you disclose to your mother everything up front, but I don’t know how ill she is, and if she can take the news well. It is up to you to decide.

Hopefully, your mother will support any decision your family makes. With her help, you need to discuss her wishes on how company assets are to be divided. (See “Equal is not always fair,” March 21, 2014). Honor your mother’s advice in this regard—if you feel that problems about inheritance may crop up, then address them in the presence of your consultant in order to avert chaos. Next week: More information on Eu Yan Sang, please

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 (email [email protected].) Email the author at [email protected].