Dairy Excel: Preparing the next general manager

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Imagine operating a business for several years with the assumption that a son, daughter, or other family member would take over, only to learn this person is not capable of managing the business.

This is a problem far too many family businesses encounter and it’s one that can be prevented with planning.

In many businesses there is some thought given to the transfer of assets, but less time is devoted to teaching the younger generation the critical management skills needed to be successful well into the future.

The next several paragraphs should provide you with some tips for transferring management to the next generation.

Preparation. When do you begin preparing your successor? This process is a never ending one that begins at birth.

The first 15 to 20 years of life are critical because this is the time when values, attitudes and goals are established. The experiences you provide and the examples you set will influence the management ability of the next generation.

Transferring management requires communication and participation by both the senior and junior members of the business.

What are the goals of each generation? Is the goal to expand or maintain the present size? How will future business growth be financed? Is there a common vision for the business?

Family members will work toward a common vision only if the vision will achieve their personal objectives.

Additional responsibility. Over time, junior members of the business must be given additional responsibilities and an increasingly more important management role. This includes having the authority to make decisions and accept responsibility for their actions.

Dividing responsibilities among the members of the business will help develop management abilities, greater skills and improve the overall business.

Conflicts. Some family businesses fail because of personality and management style conflicts among members.

When these conflicts arise it is difficult to carry out the day-to-day management activities if you are spending time tying to figure out what’s “wrong” with someone in the business.

Each family member has their own style of management and recognizing what makes them follow this style can help reduce conflict.

Some people take a more democratic approach to management, while others simply bark out orders and expect the work to be done. Some prefer to gather facts before making a decision, while others make them based on instincts.

The point is that each person is different and each functions differently. Understanding, working with and managing these differences is the key.

Behaviors for developing capable managers:

* Check progress. Check progress by asking questions. You can learn how much understanding a person has and how capable the person is to accept new responsibilities.

Asking questions also helps the younger members of the business develop management capabilities.

* Allow exploration. Again, through questioning, you can learn how a person perceives a situation. Ask questions like: What happened? What caused it to happen? What did you learn from that experience?

Allowing people to explore helps develop good judgment and increases their capabilities.

* Encourage, don’t direct. It is easy to fall into the trap of directing people to do things the way you want them done.

Nevertheless, when people are encouraged they are more willing, cooperative and responsive. Encouraging people to explore possibilities helps them develop positive attitudes toward learning from experiences, and even from failures.

* Celebrate success. Celebrate success rather than pointing out failure.

People live up to (or down to) what we expect of them. So, if you want the junior member of your business to be a capable manager, make them aware of your expectations.

* Respect. Respect rather than hold accountable. Junior members of your business will not gain management knowledge if they are afraid to have an experience or as long as senior members analyze it for them.

Sometimes junior members are held accountable for having all the expert knowledge of the senior generation.

It refers to the habit of expecting others to read our minds and think in a particular way. It makes others who fail to see, think and understand exactly as we do unacceptable by our standards.

Peter Drucker, a famous management consultant and author once said, “The final test of greatness in a chief executive officer is how well he chooses a successor and whether he can step aside and let the successor run the company.”

If you haven’t already done so, begin preparing your successor and then get out of the way.

(The author is an agricultural extension agent in Tuscarawas County and a member of the OSU Extension DairyExcel team. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)

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