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Spring 2013

March Current Thinking Column

Tuesday, March 31, 2015

The Importance of Knowledge Transition In The Family Business

by Leslie Dashew

 
Most often, if one applies for a job, the people hiring know what skills, knowledge or competence is needed for that role and can evaluate the candidates for it accordingly. And, if I am a candidate for that position, I may already know what it takes to be successful at that job and prepared beforehand.

However, in family businesses, we often end up with roles or responsibilities for which we have had no preparation or understanding of success factors—we may have inherited the role or responsibility. For example, a leader who has developed a business may have done estate planning, yet his offspring who have inherited the business, may not have been prepared to be owners or operators of said business. The heirs may not feel equipped to guide the business, while the elders may not trust the competence of the heir, either.

This is sometimes true of those who have gained a position in the family business because of his or her role in the family, not necessarily because of training, experience and/or competence. So how do we have trust in family members who get the job to run the family business when this occurs?

Further, entrepreneurial ventures and family businesses are sometimes operated by people who may be creative, but lack skills in managing or mentoring. Oftentimes, these people learned the business as they built it, and lack the formal conceptual training others may have in business. Thus, it is difficult for them to transition knowledge about the business/role to others. In these situations, others may end up with additional responsibility in helping successors or employees learn their roles in the business.

With the improvement in the economy, family business executives are among those who are now struggling with how to fill “the skill gap” that resulted from downsizing during the past 7 or 8 years. Developing capable employees is now an even greater challenge.

For all of these reasons, transition of knowledge is particularly important and challenging in the family business. Knowledge management and transfer happens from two directions: the delivering end and the receiving end. This is illustrated by the two voices in the following poem.

Sometimes I feel like I don’t know “nothin”
And sometimes I really don’t!
Other times it seems that the answers are right there
And I don’t know where they came from
I think I am just lucky when I learn through osmosis
Yet then I don’t feel confident that I know where to get more knowledge

How do I share what I know
when I just learned by doing?
I don’t have a book or a curriculum, I just figured it out
Over the years the business grew, so did I
I learned by trial and error
Making mistakes I don’t want to repeat…
and I don’t want them to repeat them either!

I created the wheel
Now I don’t want it reinvented
So I have to figure out how to share that process
With patience, persistence and clarity
But I am no teacher, I am a do-er

I am not the creator
I am a learner
Who may be able to add to
But I have to understand the basics first
So surround me with lessons and compassion
With tools and talk

Let’s learn together
Grow through our process
Enrich our souls through the collaboration
That our family transitions provide for us.
The reality is, that each day I am both a learner and a teacher
And I have to succeed at both.

-Leslie Dashew


Developing a system to assure that knowledge is transitioned requires attention to three important dimensions: role, content and method. Click here for an explanatory graphic.

Each role in the family business requires a different set of competencies and knowledge. Depending on the individual and his/her life stage and access to learning opportunities, the method may be different.

In future posts, we will share more about the tools that help the transition of knowledge. Meanwhile, there are several assumptions I hold about the importance of knowledge transition: 

1. Without growing our knowledge, we lose our competitive edge as a business;
2. All stakeholders need to develop their capabilities so that the family business as a complex system (3 roles;/2 subsystems) will benefit no matter who is involved;
3. We need to take responsibilities for our own education: no one knows what we want to do or our needs better than us. We can’t assume anyone else will lead this charge! 
     

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