It's well-understood that the pandemic has forced dramatic changes on businesses of all kinds. Think e-commerce acceleration, the rise of remote work, shifts in consumer behaviours, and so on. The ability to embrace and sustain changes like these is imperative for any organization's long-term success. But while navigating change effectively can be tricky for many, it's even more so for family enterprises because that additional family element adds further complexity.
In our constantly evolving economy, many family enterprises—and especially family leaders—will need to adopt a change management mindset, in which they acknowledge and accept that change is inevitable and act accordingly.
However, change management can be unique for family enterprises. Why? Because family enterprises are uniquely complex and so are the challenges they face. They are often defined by their deeply embedded—and often very personal—histories, cultures, dynamics and traditions, complicating the need to build a case for change and get buy-in from multiple generations of family members.
The fact is, change can be extremely difficult, and everyone manages it differently. Successful change in a family enterprise requires every family member to be committed throughout the journey, as it often takes only one person to derail the forward momentum. Collectively, then, a family will need to recognize when, why and how change will be beneficial, how to create alignment, and the capabilities required to manage change successfully.
An effective change management framework can help to anticipate shifting business landscapes, identify barriers, manage family dynamics, and determine the best ways to leverage and invest in family capital (i.e., the combination of the family's financial, human, intellectual, social and spiritual capital).
When supported by a family advisor, a change management framework can not only bring a sense of ease to complex situations but also provide opportunities for better intergenerational engagement and greater family cohesion. On the flip side, the lack of an effective framework can lead to temporary fixes, which may ultimately undermine a family's ability to achieve its strategic vision. It can also be easy for families to fall back into the old ways if the desired change is not sustainable.
An effective framework has five key principles to drive a family's change journey, summarized as follows:
- Reflect. It's easy for families to get caught up in the day-to-day activities, to the point where they may not take the time to thoughtfully reflect on the bigger picture. Reflection can help answer questions such as: Where is the business today? Where will the business be tomorrow? What needs to change in order for us to be successful? What are the barriers to change?
- Align. Successful change requires agreement on shared purpose, which takes into consideration individual and collective values, vision and mission, and ultimately aligns family members on a clear path forward. A shared purpose also serves as the foundation for the vision for change and future strategic planning.
- Develop. Once a vision for change is established, a tactical roadmap should be developed. In doing so, it's important to understand how each family member will be impacted so that everyone is supported and nurtured along the way.
- Enable. Enabling change means ensuring everyone clearly understands the desired behaviours and how to translate the vision into reality. In some cases, this may require the development of future leaders or the improvement of family dynamics to get from point A to point B. Depending on the type of change, enablement can also be exhausting and stressful, resulting in dwindling excitement and increasing resistance. A family advisor can keep a constant pulse on family members and continuously create engagement to drive momentum and energy.
- Sustain. Even when the future state is achieved, the journey doesn't end. It's critical that any change be sustained so that long-term benefits can be realized. Sustainable change is seen when family members are consistently demonstrating desired behaviours and leaders are continuously serving as role models.
Invest in change
To achieve sustainable change, family enterprises should recognize and understand the unique challenges they face and ask themselves if they have truly adopted a change mindset. How are they measuring against their objectives? Do they have the right enablers of change embedded throughout their family, business and ownership? A family advisor can help guide family enterprises through the process and help them answer "Yes" to these questions.
Interested in learning more? Please reach out to chat about how I can support you.