I recently had the privilege of leading a panel discussion comprised of six business owners – three fathers and three sons. The event was hosted by Illinois’s premier manufacturing association, the TMA. What the audience came to hear were first-hand accounts of how each of these companies have successfully carved out a niche where they can thrive, and at the same time navigate the challenges of successfully transitioning the business to the next generation.
Our panel included; Wiegel Tool Works, Gatto Industrial Platers and X-L Engineering. We asked two questions and here are the take-aways they shared.
Q: How do you drive innovation and stay competitive?
- Grow or die! If you’re not committed to moving forward you are already in trouble
- Scour the market for new technology
- Turn over your equipment. Become more efficient
- Drive change
- Not all employees are willing to change – you may have to change them
- Think globally
- Get out of the shop. Visit other companies both in your industry and out
- Join a group of other owners, it’s too hard to go it alone
- Schedule lunch-and-learn sessions for your people, keep educating
- Don’t share everything. Develop some proprietary systems and processes that give you a competitive advantage, then keep it private
- Run faster
- Develop an incentive based profit sharing plan. Then you have 50 partners not just employees
- Have the same goals and get everyone on the same page
- You can’t manage what you don’t measure
- Use the “360 degree rule” for communication, 270 isn’t enough. It must come back to you so you can confirm we are all clear and in agreement.
- Define clear roles and responsibilities
Q: How have you navigated the family leadership and ownership transition?
- If you are not already planning for the transition, you’re late!
- Start mentoring and sharing with the next generation
- Run in stride with your leaders
- You must be willing to turn over control – when they are ready
- It’s your responsibility to get them ready
- The next generation must earn the respect of the organization before they take over
- Consider a generation skipping trust
- Work with a team of professionals, there are things you don’t know
- Hold quarterly family meetings
First reaction might be… “Easier said than done”. True, but there is tremendous wisdom here in these suggestions. But what is most compelling is that these all came from the successes and lessons of real people running real businesses. So it can be done.
In my years of working alongside owners and their leadership teams, I can tell you, this will all go much smoother if you are 1) all on the same page with where you are going; 2) using the same operating system for how you run the company.