GENERATIONAL CHANGE OF COMPANIES IN THE INDUSTRY ¿PROFESSIONALIZATION OR SALE??
“The family must understand that the company needs to grow”
Laboratories, distributors and veterinarians face the challenge of their own transcendence. The consultants Cinthia Kaplun, Sandra Felsenstein and Darío Rubinsztein analyzed keys to keep in mind during the process.
There are four possible paths for the continuity of family businesses: 1) the generational transfer, 2) the assignment of a third-party management, 3) the sale or 4) just utter inaction.
Faced with those alternatives, it is clear that the latter is the one to be avoided. However, taking any of the other options requires a continuous process of work and decision-making that must begin sooner rather than later.
under that premise, the kaplan consultants, Felsenstein and Rubinsztein took the stage at the Argentine Veterinary Industry Summit 2019 organized by MOTIVATE, to provide essential tools when advancing on the path of professionalization.
“The ideal time to professionalize a family business is always, but the most frequent is when there is the transition between the founding partner and the second generation”, Kaplan stands out to the more than 400 CIVA attendees 2019, many of them representatives of family businesses.
“An ideal time to start is when the creator of the company seeks help, he can't find it and he wonders who to delegate to. Delegating implies giving power to the other. If it manages to professionalize the organization already at that time, when the children enter the decision-making process, everything will be easier” adds Rubinsztein.
For Felsenstein there are many aspects to take into account within the organization that you want to professionalize and for that you have to define the roles of the people within it and that the north is clear, through specific goals. At the same time, have measurement instruments such as the control panel and KPI to compare them with the objectives and know if we are doing well or if there are opportunities for improvement., is key.
a winding road
"The first risk in the professionalization process of a family business is the breakdown within the family between those who participate and those who do not" argues Rubinsztein. “Many can get angry when they are made aware that they are not up to the task. In this sense, you have to be very careful because there is an interdependence between family and company. At the same time, it must be determined what the owner of the company prioritizes: and the family, the company or prefer to walk on the edge between the two”, add.
“In those cases where the children are not prepared to give continuity to the company, we should evaluate the possibility of implementing a protocol, that is, a relationship code, understanding as protocol the final destination to which to arrive, not without being reviewed periodically "says Kaplun, daughter and continuator of her father's legacy. and it expands. “There you can determine, what are the requirements that the member of the family that wants to be part of must meet and in what case they will not be able to join, how much are they going to earn, if those salaries will be in tune with those of the market, they will be for equality or equity. And for this you have to take the time because the dream of the founder is at stake, which is for your company to grow.”
Para Felsenstein, founder of the consulting firm DINKA, A point that should not be overlooked is clearly differentiating, the fees of those who work in the company beyond the dividends you may receive for your shareholding in the company.
They are not always aligned. Two partners can have the same share, but completely different roles within the organization. Many times this is confused by jealousy or other reasons and objectivity is not achieved.. Measurements are essential to evaluate performance and there are always parameters to make the subjective objective”, states before a room full of the assembled referents the 14 of November gathered by MOTIVAR in the City of Buenos Aires.
In the same line, Kaplun adds that, you have to have the courage to put down in writing, what happens if in-laws want to work at the company; In the same way that if a son falls in love with an employee, do they both continue, only one or none? In this type of issues, it is defined that a business family manages to transform itself into a family business.”
For the founder of DINKA, work processes are essential: “Schedule meetings with a minute and that they be within working hours and with a guide, It is another of the recommendations to prevent the topics from being transferred to the Sunday roast.”
Finally, Rubinsztein maintains that a protocol must be faced and it is a process that takes time.. “There are advances and setbacks., but do not get carried away by the discouragement from the disagreements, but to find tools to find the best solutions. The family must understand that the company needs to grow. Otherwise, an exit can become the sale, which is not exempt from a prior professionalization process to capture the greatest possible value”, parse at closing.
