With studies showing that ownership of more than 60 per cent of family-owned businesses will be changing hands over the next decade, Ottawa researcher Peter Jaskiewicz believes succession planning is more important today than ever.
The director of the University of Ottawa’s Family Enterprise Legacy Institute has devoted much of his working life to studying family-owned enterprises, constantly asking himself the question: why do some succeed while many others fail?
In their new book, Enabling Next Generation Legacies: 35 Questions that Next Generation Members in Enterprising Families Ask, Jaskiewicz and co-author Sabine Rau, a visiting professor at uOttawa’s Telfer School of Management, explain why it’s vital for the country’s economic health for such businesses to remain in the family.
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Jaskiewicz recently spoke with OBJ about his new book, how the hit HBO series Succession mimics real life and why the pandemic has suddenly put issues he’s been studying for years into the spotlight. The edited transcript that follows is the second in a two-part series on that conversation.
OBJ: What do you hope people get out of your new book?
PJ: One of our revelations over the years after having talked to over 100 families was that the next generation asked different questions than the parents. But most advisers or consultants out there talk to the parents, because the parents are still in charge of the business and they pay the bills. The next generation has different concerns and questions, but nobody’s really engaging them. It seems absolutely essential to involve them. So we collected questions and went to another 70 prominent families and discussed the questions that we collected from next-generation members around the globe. We got feedback from them. We (took) the most prominent 35 questions, and we got the best academics from around the world to provide very short, succinct answers. On top of that, we asked 35 prominent families from around the globe to comment on the questions and the answers provided and see how it worked out for them. We have a book that allows you to go to 35 short chapters, hear two voices responding to each question and provide additional resources. We are receiving a lot of positive feedback from people saying, ‘Finally, somebody is filling that gap.’ It’s very humbling and satisfying.
OBJ: On a lighter note, I just finished watching the third season of Succession. How realistic is its depiction of family business conflicts?
PJ: It’s obviously a drama, but there are families that are pretty dysfunctional, one way or the other. I’ve known families that maybe aren’t exactly like the Roys (the fictional family of media barons depicted in the HBO series), but yes, they exist, unfortunately. We see them in the media. These conflicts erupt. Very often these things are kept secret. What is realistic about the show is that if you’re on a downward spiral because of family issues, very often these families cannot get out of these dysfunctionalities. They just perpetuate and show up in every project, and it’s a never-ending saga. The families usually need external help. We’ve seen a bit of drama in the Rogers family recently and in other families in the past. But there are also a lot of amazing families out there that make a tremendous difference over the generations and centuries after many of their competitors have come and gone.
OBJ: What impact has COVID-19 had on succession planning?
PJ: I think it’s become an opportunity for the next generation for many brick-and-mortar family businesses. The parents have been having daily interactions with lots of clients and are now saying, maybe we have to hand over the business a bit earlier instead of just postponing and postponing it. They realize life is precious and very uncertain. At the same time, I think many families are also taking advantage of the next generation’s technology skills to move toward e-commerce. This has created opportunities to pass on the business earlier and opportunities for the next generation to add important skills that maybe have been shunned or ignored before. I think families have also spent more time with each other during the lockdowns. It brought some families closer, and the family business was one thing they could all kind of get involved in.
OBJ: If there was one key piece of advice you could give to family business owners grappling with these issues, what would it be?
PJ: I’ll say three things: communication, communication, communication. Communication is the root cause of a lot of conflicts, and the solution to a lot of conflicts. We see that the inability of people to really listen to each other or just the lack of interaction causes issues. There’s no doubt that you need to have constant communication, and you need to have some trust. Without that, success is not possible.