Page 29 - Lighting Magazine December 2018

SucceSSIon raTeS amonG FamILy buSIneSSeS
For most closely held companies, succession planning is one of the toughest and most critical challenges; it can also be a great opportunity to create a multi-generational institution that embod- ies the family’s values and mission for generations to come. The process can be used to bring in the younger generation with a new set of relationships, innovations, and opportunities.
According to the Family Business Institute, 88 percent of current family business owners believe the same family will control their business in the next ve years — but succession statistics don’t substantiate this belief. The Family Firm Institute claims roughly 30 percent of family and businesses survive into the second generation; 12 percent are still viable into the third generation; and only about 3 percent make it to the fourth generation or beyond.
There is clearly a disconnect between the opti- mistic belief of today’s family business owners and the reality of the massive failure of family compa- nies to survive through the generations. Research indicates that failures can essentially be traced to one factor: a lack of succession planning.
ProacTIve PLannInG
Jack Fleischer, President at Hermitage Lighting Gallery in Nashville, is a second-generation lighting showroom owner who is currently working with a professional to structure a succession plan.
Jack and his wife, Daniella, have been active leaders in the business for decades and now their children have joined the team. “My daughter, Ra- chel, has been in the business for about a year [a er moving back to Nashville from New York City] and is now in charge of purchasing for the lighting side of the business,” he states. “My middle son, Ma , joined us three years ago, when he moved from Florida back to Nashville; he runs the National Ac- counts division. My oldest son, Adam, joined the business October 1 as Director of Operations.”
One of the reasons Jack Fleischer made succes- sion planning a priority is because he had inherited the lighting showroom business from his father, Gerald, and knew how important the strategy was. “We’ve found that e ective succession planning needs to be a mix of working with a professional while also personally challenging [my] kids to ‘show me you can run it,’” he adds.
Of course, it’s not always easy. “There is a lot of baggage that you develop with family over the years that can be tough to separate from business,” Fleischer comments. He outlines four pieces of tried-and-true advice for members of any family-owned company ge ing ready to go through succession planning:
1. Have experts in your corner; it makes all the di erence. Ask for recommendations and search out educated professionals who understand succession planning and can work with your legal counsel, nancial advisors, investments bankers, etc.
2. Decide on the rules of engagement at work with your family members before any of those rules apply.
3. Have open conversations, even when it’s tough.
4. Dotheworkneeded—organizational charts, aptitude testing on family members, active learning and listening, engagement.
“I’m still at the helm,” Jack says, “but I recognize that I have to put people in place to o -load some of my responsibilities and move into a real well- oiled machine.”
“I recognize that I have to put people in place to o -load some of my responsibilities.” —Jack Fleischer
NExt in line
The Fleischer family at Hermitage Lighting Gallery: Adam, Rachel, Jack, Daniella, and Ma .
december 2018 | enLIGHTenment magazine 25