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This week, Rudolf Janssen, a Director with Deloitte in the Netherlands, and Hugh Pickering, a Consultant with Deloitte in the UK, talk about the value of stepping back with families to reflect on the process of planning for generational transition.

Discovery, alignment, transformation

When family enterprises undergo successful and sustainable change during times of generational transition, we find that there are three important phases that they must go through, which we refer to as: discovery, alignment and transformation.

‘Discovery’ is the awareness raising process during which family members collectively gain a better understanding of themselves, their ownership and their enterprise in terms of where they are today and what they would like to change or improve – in effect they are recognising and defining their challenges, which could relate for example to succession, communication and/or governance. Preferably this involves all family members across the generations.

The next phase, ‘alignment’, involves family members articulating and committing (or recommitting) to a shared vision, key principles and set of objectives, in order to agree on the general direction of travel and establish the changes that are needed. You could term this the ‘design process’ – it is the process during which the family agree the changes they want to put into practice. The culmination of this work is often recording these agreements in family documents that all have contributed to creating.

Finally ‘transformation’, the phase during which the agreed changes are implemented and the family’s vision, values and objectives are translated into practice by making appropriate adjustments and interventions across the three dimensions of family, ownership and enterprise. At this point, new board appointments might be made, a next generation education programme could be launched, a family office build might commence for example.

Reflection as a moment of celebration

We often guide and support families through these three phases and of course, it goes without saying that every family is different so every project is different. However, in our experience, one consistent factor is that it can prove immensely valuable for the family in question to find an opportunity during the work to step aside and reflect on the process itself and the impact it has had.

Midway through the work can be an ideal moment for all family members to share their feelings, to share the views they previously had, their current views, and how (and why) the process has changed them. How did they initially perceive relationships between themselves and others, and how has this changed?

By taking the time to share their evaluations of working together during the process of transition and change, family members are able to appreciate the progress they have made and the outcomes achieved.

In our experience, this ‘step aside’ can easily turn into a moment of celebration:

Look at what we’ve already accomplished, look at what misunderstandings we’ve managed to clarify, look at the creative solutions we’ve crafted by working together.”

We also often hear: “We could and should have done this years ago.”

Any time a family comes together to decide on the way forward, it is of course very much a collective effort. By using reflection as a tool to look back jointly on the road travelled, the journey that lies ahead becomes ever more exciting and promising.

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Rudolf Janssen – Deloitte Netherlands 

Rudolf specialises in business succession, both in Deloitte Netherlands and at Nijmegen University. He publishes regularly on issues relating to business succession and he is a co-editor of several magazines and publications relating to this subject. Tax incentives for business succession can be instrumental in getting the subject of succession put on the agenda of the family. Other aspects of succession however will need to be determined by the outcome of the discussions within the family of the issues at stake. The Deloitte member firms provide bespoke services on durable family enterprise governance in the interest of all stakeholders of such an enterprise..

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Hugh Pickering – Deloitte UK

Hugh is a Consultant in the UK Family Enterprise Consulting team. Joining Deloitte from a background in Anthropology, he is interested in the intersection of family issues and business issues, and particularly enjoys working with large family businesses undergoing concurrent organisational and family change.

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