What is Generation Syndrome in Family Business?

 

 

Starting a family business came out of love, passion, dedication, and strong commitment. The firm has to go through so many struggles. Still, with continuous effort and the family bringing all their support, the family business slowly reaches its goal.

But the time comes when the founder needs to step down, either due to some circumstances or because he may be too old to handle such business. The children are the next in line to take his place and hopefully continue what he has started. Unfortunately, not all children may have the same enthusiasm as their father (or mother). They may have involved themselves with other ventures or may have worked in different fields of interest.  Broken dreams…..When this happens, the family business slowly collapses. Even if it could be heartbreaking, there may be a need to close the business for good. Conflict of interest, unresolved family issues, and poor management affect the company’s family members and the lives of those who have worked for them for so many years.

Second generation syndrome, as this is most commonly known for, results from having a weak to almost loss of interest in continuing the business. The supposed successors of the company may not have seen the same goals and aspirations as those that the first generation has. They may have seen better opportunities outside their family business. Instead of sustaining the company, they would rather stay with what they think would be more appropriate for them to get involved with.

The founder may still, however, insist on letting his successor continue with the business. Putting a considerable risk, however, it may be worth a shot. But, there is a huge possibility of not having the family business as successful as the first generation.

The second generation may not value the family business as much as the first generation. Thus, failure is not far behind. Family business failure maybe because of the following:

      1.  The successor of the family business maybe not be well adept to the kind of business that they have. The company may have just been handed to them without truly understanding the” ins and outs.”

      2.  When a family member is forced into managing the business, laziness may persist, apart from not having much knowledge and interest. The lack of enthusiasm as that of the first generation will be of no help running the business.

      3.  Having second thoughts of continuing the business and seeing other opportunities instead.

      4.  The business has thrived long enough because the founder has the passion and desire to succeed. If the second generation lacks the same power, how can these successors maintain good relationships among their employees and clients?

      5.  When the founder exists the business, he may have taken out a lot of money and left just enough for the business. In times where the economy is struggling, this may not be good. It could definitely affect the overall sustainability of the whole company due to insufficient resources.

      6.  The lack of knowledge to run the business will never get it to succeed. The founder could not just tell his children that he was retiring. They need to start working for the company without proper training and developing the right skills to manage the business.

     7.  The founder, with all his dreams and aspirations in mind, takes time to expand his network. He always has the time to meet different people because, in that way, he builds a good relationship with them which can be beneficial for the business. However, if the successors do not have the same passion as their founder, the loss of interest of the people declines, and that will indeed affect the business, BIG TIME! Suppose you are the boss of any company. In that case, you should maintain a good relationship with other people because a company becomes successful if the people feel that they are given importance.

      8.  Having a good relationship with people also means respecting those who helped the company get where it is. Suppose the second generation does not acknowledge such, slowly. In that case, people will get tired of supporting and would be careless, and that could be one huge factor that could get the business down the drain.

      9.  The second generation may not exert the same effort as the first generation; hence, he has this employee mentality. He just sits down all day, unmindful of his fundamental role in the business, and just waits for the paycheck each month. Sure enough, the company would not make it…not even in 6 months of such poor management.

      10.  The lack of passion, knowledge, interest, and skill will all result in being unmotivated. And we know that when there is hardly any motivation, one tends to remain still without any progress. And being stagnant in such circumstances will undoubtedly harm the business.

      11.  It is funny how these second-generation owners would start living a world of craziness with all those fancy cars, going to different places, and endlessly partying.  Considering that they want to have this kind of life, their lack of interest in sustaining the business and continuously spending an enormous amount of money will result in bankruptcy.

      12.  The lack of knowledge and interest is terrible enough. Maintaining employees who are no longer effective with their work is worse. The second generation may think that old employees are enough to help them succeed without putting in much effort. But there also comes a time when senior employees need to be changed. There is a need to hire new ones who can help the business with their new, fresh input appropriate for the company to progress.

Indeed, it is not easy to hand down a business to the second generation if these family members lack the same dedication and enthusiasm as the first generation. Probably, instead of totally losing all assets in the process, it might as well sell the company to others. People might be able to continue the same passion as its founder.

—————————————————— 

You may contact Armando “Butz” Bartolome for questions and more information.

By email: [email protected]

FB Page: Armando Bartolome

Linkedin: https://www.linkedin.com/in/franguru/ 

Website: