Knowledge & Wisdom Transition in Family & Business

Knowledge & Wisdom Transition in Family & Business

by Jonathan Roth Magidovitch

First, this note of caution: a poorly handled transition of knowledge and wisdom will set loose tsunami waves of disruption

We have an archetype of such a broken transition in Hebrew Scriptures.  From his death bed Jacob (Yisrael) the Patriarch gathers his children and shares key information with them:

Then Jacob called for his sons and said: “Gather around so I can tell you what will happen to you in days to come. … Your father’s blessings are greater than the blessings of the ancient mountains, than the bounty of the age-old hills.” Genesis 49

Jacob acts with best intentions, but the result is fraught with difficulty:

When Joseph’s brothers saw that their father was dead, they said, “What if Joseph holds a grudge against us and pays us back for all the wrongs we did to him?” Genesis 50

This Biblical “uh-oh” moment is something many family businesses experience. Faulty transitions lead to infighting which is costly to the value of the business and to the cohesion among the family. Therefore, diving into the subject of transitions is of high value.

Our subject is transition of knowledge & wisdom in family business.  We make the parallel to elders blessing their children to provide a framework for understanding transitions.

Transitions are often thought of as final, definite acts by the patriarchal leader or his proxy. Given this compression into a single, final moment, such transitions tend to be dramatic, emotional and subject to a variety of disruptions.

There is little time and huge potential for interference making it difficult to validate the transition, contextualize it or stabilize it within the successor generation.

Key modes of understanding transition include:

  • magical
    • The elder manipulates forces (tools) which bestow upon the younger capabilities the elder deems core to running the business.  This transfer may not actually include training or information. Think here of the Wizard of Oz who bestows brains, heart and courage.
  • mystical
    • The elder invokes a metaphysical force which bestows upon the younger the rights and capacities of leadership.  This is akin to coronation in bringing to the younger a “divine right of kings” type leadership
  • informational
    • The elder turns over access to e.g. the CRM database, the location of skeletons, relationships with service providers; in sum, all the skills and knowledge to run the business.

Each mode comes from a mindset, a culture of the family.  Often, more than one mode is used though there is a dominant mode.

In the “magical mode” the most notable attribute is manipulation.  There is an actor, a decider, a doer.  And there are objects of action, receivers who are not given control, who are corralled into passivity and in whom there is a build-up of resentments.

A business might choose this magical mode with the belief that the competition it sets up among the owner-employees serves to hone the skills of each.

In the “mystical mode” there is a sense that this business is “bigger than each and all of us.” There are values here that the patriarch has been stewarding and now is passing that stewardship on to the next patriarch.

A business would choose this mystical mode with the belief that the business’ core values are broadly accepted as valuable and that broad acceptance sustains the business and unifies the owner-employees.  Typical of this mode is Subaru which promotes the values of sustainability and of multiculturalism.  These values are demonstrably present in their products and are central all the way from design through marketing.

The “informational mode” is marked by beliefs about adherence to best practices.  Emotion is allowed a place in the process but it does not drive the process.  Quantifiables are the drivers.  In this mode, there may be a patriarch, but this person would have powers limited by documented procedures.  Transition also would be delineated by those procedures.  This compares to the Kings of Ancient Israel who ascended to the throne only after having handwritten for their future reference a copy of Scripture and this text was kept handy on a shelf built into the seat of their throne.

A business would choose this informational mode with the belief that it provides stability by limiting capricious action.  This stability however is directly related to the quality of the core management document and its inherent procedures.

Timing is everything. The above modes matter, but as much or more, timing matters.

Returning to the image of a parent blessing their child, if a parent were to place their hands on their child’s head and say words of blessing, beautiful well-considered words, this would seem to be good.  But, if every day prior to that act of blessing the parent said and did things to and around that child that were difficult or damaging, it would be near impossible for that child to receive the blessing outside that context.

Therefore, rather than thinking of blessing as a final and definite act, consider blessing to be the sum total of all the energy that has ever been directed by the parent to the child.  Blessing begins at the child’s birth and continues 24/7 even if you don’t think the child hears and even if the child is not in the room at that moment.  This is not magical or mystical.  This is because actions come from somewhere inside.  If we hold a belief and only say it behind someone’s back, that belief still influences how we act and they still pick it up; they still feel its shadows and repercussions.

Similarly, business transitions of knowledge and wisdom are not effective if thought of as some final act. Transitions of knowledge and wisdom must be part of the ongoing consciousness and work of the business. From the moment of taking the helm, a leader must actively be preparing for their own retirement and for healthy succession.

The leader must consider ongoing that the future transition must be perceived as valid by the stakeholders of the business. The leader must create a context for transition and must be explicit about this context.  That is, transitional constructs cannot be hidden in hints and parables. The leader must stabilize transitions by creating a culture that supports transitions.

Don’t wait.  That is the central advice about transition of knowledge and wisdom.  As a family or business leader make transition an ongoing part of your work.

Jonathan Roth Magidovitch works in the US and Israel as a coach/consultant for individuals, families and family businesses. He is the principal of Yosef Meged Consulting.

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