{"id":866,"date":"2012-04-18T06:00:27","date_gmt":"2012-04-18T10:00:27","guid":{"rendered":"http:\/\/www.meghirshberg.com\/blog\/?p=866"},"modified":"2012-04-18T10:32:52","modified_gmt":"2012-04-18T14:32:52","slug":"interview-with-paul-karofsky-family-business-consultant","status":"publish","type":"post","link":"http:\/\/www.meghirshberg.com\/blog\/2012\/04\/interview-with-paul-karofsky-family-business-consultant\/","title":{"rendered":"Interview with Paul Karofsky, family business consultant"},"content":{"rendered":"
\"Paul<\/a>

Paul Karofsky is the Founder and CEO of Transition Consulting Group, based in Framingham, Massachusetts and Palm Beach Gardens, Florida. Paul and his son, David, consult with families in business together about the challenges they face concerning the transition of leadership and ownership. Their goal is to facilitate communication and relationship-building among family members.<\/p><\/div>\n

Paul Karofsky on why transitions in family business work well only half the time; on why it\u2019s sometimes hard for the older generation to let go; on what questions families need to ask themselves; and on why occasionally progeny shed tears of relief that they are not the right fit to take over.\u00a0 <\/strong><\/span><\/p>\n

Q:\u00a0 Generally speaking, how well do leadership and ownership transitions go in family enterprises?<\/em><\/span><\/p>\n

A:\u00a0 Approximately 50-60% of the transitions go really well.\u00a0 The others have hitches that can vary from serious breaches of trust to confusion about how to do the transition.\u00a0 There\u2019s often a lot of fear and anxiety on the part of the older generation around letting the younger generation take hold.\u00a0 Can the kids handle it?\u00a0 Can they take the company to the next level?\u00a0 And, if so, what am I going to do with the rest of my life?\u00a0 And what if the kids screw up?<\/span><\/strong><\/p>\n

Q:\u00a0 What types of problems do you encounter when counseling families on business succession planning?<\/span><\/em><\/p>\n

A:\u00a0 I encounter older people with middle-aged \u201cchildren\u201d working in the business, and the owners either can\u2019t or won\u2019t let go.\u00a0 I encourage people in that situation to commit to a date to retire.\u00a0 Occasionally I run into someone who has brought their child into the business, and when the child surpasses the parent in terms of success or effectiveness, the parent feels proud, but also uncomfortable.\u00a0 One of them complained to me:\u00a0 \u201cLook what it says about what I couldn\u2019t do.\u201d<\/span><\/strong><\/p>\n

Sticky issues arise when the business founder wants to leave the business to the children.\u00a0 Who gets what?\u00a0 What if a child who doesn\u2019t work in the business wants to sell it, to diversify?\u00a0 With a family enterprise, there is no cookie cutter to divide things equally.\u00a0 What if more than one child works in the business\u2014who gets to be the boss?\u00a0 Or, if the company is left to one child and the business goes south, is that child to blame for bringing down the fortunes of his siblings?\u00a0 This latter scenario is an unreasonable risk for children not working in the business to assume, and an unreasonable burden for those who are.<\/span><\/strong><\/p>\n

Q:\u00a0 How do you help families resolve such sticky questions?<\/span><\/em><\/p>\n

A:\u00a0 I start with basics:\u00a0 if the family does not serve the business, the business won\u2019t be there to serve the family.\u00a0 The family needs to sit down and ask themselves, where are we going?\u00a0 What\u2019s required of the next generation to get there?\u00a0 \u00a0What knowledge, skills, experience, training?\u00a0 They need to try to make these evaluations objective.<\/span><\/strong><\/p>\n

Q:\u00a0 Specifically, what if the heir-apparent is clearly not up to the job?<\/em><\/span><\/p>\n

A:\u00a0 We do anonymous 360-degree performance appraisals.\u00a0 There\u2019s a process of progressive revelation to help the son or daughter to see that they are not the right fit.\u00a0 Surprisingly, progeny in that situation usually know themselves that they don\u2019t belong. In the end, people know who they are and how they are perceived by others.\u00a0 Survey results confirm what they already know.\u00a0 I have seen some of them in tears\u2014of gratitude, that they\u2019ve been given permission not to enter the business. \u00a0\u00a0People need to have a passion for what they do.\u00a0 Otherwise they won\u2019t be happy and the company will not be successful. <\/span><\/strong><\/p>\n

Q: \u00a0Any overall observations about family businesses?<\/span><\/em><\/p>\n

A:\u00a0 There is no greater joy than working with someone you love and having success.\u00a0 When it doesn\u2019t work, though, the pain, stress, guilt, bickering, nastiness, and sleeplessness can make the family enterprise is like no other hell on earth.<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Paul Karofsky on why transitions in family business work well only half the time; on why it\u2019s sometimes hard for the older generation to let go; on what questions families need to ask themselves; and on why occasionally progeny shed tears of relief that they are not the right fit to take over.\u00a0 Q:\u00a0 Generally speaking, how well do leadership and ownership transitions go in family enterprises? A:\u00a0 Approximately 50-60% of the transitions go really well.\u00a0 The others have hitches that can vary from serious breaches of trust to confusion about how to do the transition.\u00a0 There\u2019s often a lot of fear and anxiety on the part of the older generation around letting the younger generation take hold.\u00a0 Can the kids handle it?\u00a0 Can they take the company to the next level?\u00a0 And, if so, what am I going to do with the rest of my life?\u00a0 And what if the kids screw up? Q:\u00a0 What types of problems do you encounter when counseling families on business succession planning? A:\u00a0 I encounter older people with middle-aged \u201cchildren\u201d working in the business, and the owners either can\u2019t or won\u2019t let go.\u00a0 I encourage people in that situation to commit to a … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,10,1],"tags":[],"class_list":["post-866","post","type-post","status-publish","format-standard","hentry","category-benefits-of-business-for-the-family","category-interviews","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/posts\/866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/comments?post=866"}],"version-history":[{"count":9,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/posts\/866\/revisions"}],"predecessor-version":[{"id":880,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/posts\/866\/revisions\/880"}],"wp:attachment":[{"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/media?parent=866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/categories?post=866"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.meghirshberg.com\/blog\/wp-json\/wp\/v2\/tags?post=866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}