Family businesses: Me and my parents versus me and my kids

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One of the dilemmas those running family enterprises can face is balancing the demands of the business with those of parenting.

As the next generations grow to adulthood, those dynamics can play out in how succession is handled.

Here, patriarchs and next-gens, as well as family office advisors, share their experiences with the evolution of parent-child relationships when it comes to succession planning and carrying the relationship beyond the family enterprise walls.

Ryan Beedie, president of Beedie industrial and residential property development firm

How has it been for you as a father, raising your kids while running a family business, and how does that compare with your relationship with your dad?

“You want to be a great father and at the same time the duties and needs of the business are constant. It was difficult at times, and I relied heavily on Cindy [his spouse] to pick up the slack, which she did. I think we have made a great team, hence a thirty-year marriage, and counting.

I was involved with my kids a lot more than my dad was, as he worked 70 hours a week and the business was his priority. It was a different time. I wanted to be more involved with my kids and for sure I was, but the business has always been a priority for me, too.”

What he did was brilliant. I know people who have not handed the business off well at all. My dad gave me authority by the time I was in my late-20s. He handed me the baton because he could see how fast I wanted to run. We had great counsel back and forth, and had tremendous, mutual respect. The only thing we argued about was relocating from our office on Kingsway, where he had been for 53 years. When we finally moved, he apologized for making such an issue about it. He was the kind of person who readily admitted his mistakes and he could often remove ego from his decision making.

None of my children are in the business. … I made an intentional decision about 15 years ago to let them go and do their thing. I have some regret with that, to be honest. I thought one or more of them might come back.

We have created an advisory board that the kids and Cindy are part of, and they have started to learn more about the business from their participation.”

Scott and son Randy Spracklin, co-owners, Newfound Builders, and stars of Rock Solid Builds on HGTV Canada

How has being part of the family business shaped your relationship as father and son?

Randy: “I remember when I was younger, I followed my grandfather, followed father. If it was out tearing down a house or painting, I would be [there] in the mischief of trying to get into whatever [I could] get into, but [I was also] actually seeing them all really interact with each other.

And I’m kind of in the next step of that, because my kids, Grady and Rhiannon [are showing interest]. The other night Grady was out trying to drive the excavator, and Rhiannon was running around picking up rocks. Father was kind of watching them, and I was telling Grady not to do it, and I was thinking, ‘Yeah, Grady’s me right now, and Rhiannon’s probably even worse.”

Scott: “I think we have a tight-knit family all the way through, and we’re always pretty close. Like Randy said, right from the time when I was following my dad and uncle around, and then once Randy got big enough to walk, he was following me and my father around, and it just went on from there.”

Richa Arora, Senior Family Advisor, KPMG Family Office, KPMG in Canada

What is your experience as a family advisor regarding parenting and succession in the family enterprise?

“A key strength of family businesses is the ‘familiness factor,’ which puts a value on family relationships and involvement in the success of the business. Involving the next generation early on in the family business is a great way to nurture bonds between the generations and shape future successors.”

How can a patriarch or matriarch get to know their son or daughter while maintaining a line between business and family?

“Most family business owners struggle with separating family from business, since it’s easy to go from the boardroom to the dinner table and discuss business issues with family members.

My advice to my clients is to remember which ‘hat’ they are wearing when they come home. Hang the business hat at the door when you come home and wear the family hat. Don’t bring up business matters at the dinner table, and vice versa. Work on identifying and developing the right forums and frameworks to prevent the intermingling of issues.”

When a patriarch or matriarch feels like he or she is just getting to know their son or daughter through the business, how can they be a good teacher as well as a good parent?

“Encourage curiosity and questions about your family business and create a safe space for your next generation to learn from you – both your successes and failures.

Create a ‘present’ culture at home. Take family vacations together, have fun and enjoy recreation time away from your family business.

Children love hearing fun stories about the family business, so involve them at appropriate times and seek their input.

In large, multigenerational business families, having the right governance structures and forums to have the appropriate conversations go a long way toward achieving both family harmony and sound business results. I often guide my clients to start this process early on.”

Gerry Meyer, Founder & CEO, Meyer Advisory Group

As advisor to clients involved in major family enterprises in Canada and the U.S., how have you seen the evolution of the parent-child relationship?

“In any family business, there are three equally important constituencies: the family – including those working in the business and those who do not; the ownership – those who are shareholders, regardless of whether they work in the business or not; and the business itself – those family members who work in the business whether they are owners/shareholders, or not.

It’s referred to as the Three Circle Model, originally conceptualized by John Davis and Renato Tagiuri in the 1970s, and it’s the cornerstone of how family advisors work with their clients.

Each circle requires its own governance and focus, while frequently families see all three as just one conversation. Helping families learn to have the right conversation within the right circle is what I spend the vast majority of my time doing.”

How is the family affected when children become involved in the family enterprise?

“The question you’ve posed falls into the family circle, where all members of the family will consciously spend time getting to know each other, understand each other’s personal aspirations and vision/values, and work on understanding how to communicate, deal with conflict, and help each to develop the skills necessary to assume a role in the business, either as an owner/shareholder, managing the business, or both.

I encourage open and honest dialogue, done respectfully, as I feel a diversity of opinion and perspective is actually a positive to the family.

Families can spend too much time on running and owning the business, and not enough time on just being a family, and all the fun, challenging, and difficult aspects that typically arise.”

Is there a way for patriarchs and matriarchs to continue to get to know their next-gens outside of the family business?

“I encourage families to spend time together, and consciously NOT talk about the business. Talk about the family history, the legacy, the future, and dedicate time to having fun together. One family spent an afternoon going through escape rooms – they argued, they fought, they challenged each other, but at the end, they realized they came out being closer as a family than they were at the beginning of the day. Walls were removed and pedestals were lowered, and conversations on the business became more forthright, respectful, and meaningful. Note that paintball and laser tag sessions are not good alternatives. I speak from experience.”

Have you had any experiences with clients whose succession plan was derailed because they didn’t have the opportunity to get to know their children as well as they had hoped to?

“I’m reminded of a client I worked with some time ago, where the dynamic between the father and the children were . . . challenging.

Without any prior discussion with the family, the father decided it was time to pass the running of the business on to his two children, and he was completely shocked when they declined. He had always assumed that when the time was right, his children would step into the business, and he would transition out.

I spent time talking to all of the parties, including the mother, and realized that there was a fundamental lack of open communication between the father and the children — the father not expressing his vision and long-term plan for the transition; and the children on expressing their own personal aspirations on their respective life, career, etc.

There was a gap between the two that was easily closed by holding a series of open, thoughtful, and collaborative discussions, that included the mother, where we found a way for the children to be involved in the business going forward, on their terms, and for the father to transition with the comfort that the company was going to be well run going forward.”

How has the traditional father-to-son relationship evolved as you’ve been advising families over the years?

“Many times, the conversation focusses on ‘succession’, which I work to shift to one on ‘continuity’. The former is frequently seen as finding a ‘direct’ replacement for the patriarch, which can cause anxiety within the next generation as they assume someone need to be just like Dad to take things over, whereas the latter focusses on how the business will be managed going forward. It could mean a non-family CEO, or a family CEO but who would be given the latitude to run things as they envision, which could be markedly different then the way the founder did.”

What have you observed in more recent client conversations regarding parent-child relationships amidst succession planning?

“I am seeing an increasing number of families where the transition and continuity is from patriarch to daughter(s), more gender diversity in the next generation – even in industries that have been traditionally more male dominated. This will fundamentally change the transition dynamic and conversations, and I personally firmly believe to the better.

I am also seeing more next-gens not subscribing to the typical transition of taking over from the active generation in terms of running the business. They wish to continue to own and grow the asset, but hand over the day-to-day management and operations to non-family executives.

Two other prevalent aspects I see emerging are nextgens’ focus on social purpose – that the business(es) and the family contribute to society in some positive way that aligns with their own personal values; and a recognition that they are stewards of the family wealth, managing it for the subsequent generation.”

Responses have been lightly edited for clarity and length.

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