In Episode Five of the Propelling Performance Podcast, Rob speaks with David Werdiger, director of Nathanson Pearson. David shares his wealth of experience as a second-generation family business member and discusses the challenge of expectations surrounding subsequent generations in a family business, the critical importance of communication, shared vision and aspirations and a mindset change from ownership to stewardship.[Having a legacy means]…saying, I’ve got a story and I want that story to endure, but at some point, I’ve got to make way for the next generation to write their chapter of the story.
“We’re writing chapters, and rather than ruling from the grave or prescribing what we want our children to do… making sure we create the space for grandchildren to add what is uniquely them, into this evolving family story.” – David Werdiger
Listen to discover:
The double edged sword of family business; opportunity or lodestone?
The various challenges faced:
· expectations surrounding subsequent generations in the family business
· generational differences between siblings
· working with ‘two hats’ on – as an employee/boss and as a family member
Managing multiple relationships – the importance of well-established boundaries between family members
Making sure family members work their way up in a business – either earning their way, or getting their credit externally, by working elsewhere for 5-10 years
The critical importance of communication in a family business
A discussion of the ‘trigger event’ and potential conflict – the passing of a family member, divorce or restructure
‘Disrespected power’ – the changes in power dynamic in the family
How David helps family businesses…
· build better communication – creating a safe space where they can say the things they need to say
· work on articulating shared values and mission as a family, setting a collective family mission
· decide on their aspirations as a family and outside of the business
The five types of family capital….
1. Legacy or spiritual capital – the shared purpose
2. Family capital – looking inwards – staying connected and working together
3. Human capital – creating your own identity
4. Social capital – looking outwards – what is our place in society?
5. Financial capital – running the business and managing assets
The important mindset shift for business owners – from ‘ownership’ to ‘stewardship’ – to hand over the business to children effectively and become a ‘custodian’
A discussion of the challenges of family business succession
An explanation of collaborative practice…
· Having the family lawyer, accountant and advisor all work together to serve the interest of the family
· The importance of who is ‘around the table’ and the family dynamic
· How the location and context sets the mood.
“Helping somebody shift their mindset from owner to steward, helping somebody realise the value of social capital for the family…those are the key moments, where you change someone’s perspective and change the way they look at the world.” – David Werdiger
Think about what’s important in your family – the things that cannot be measured. Consider what cannot be measured in numeric terms. This is where you should be putting the most effort.