In my last post How “Over Giving” to your Kids Can Impact Future Succession Goals, I discussed how past gifting behavior can impact and create unnecessary challenges the transfer of business assets to your children. A common first thing given to children, which sets a tone for future gifts is a job, I recommend for you, your business’ sake and for the development of your children, they should earn it.
Giving -Creating a Title
Once your children have found their way into the family business, titles are often given away before they deserve one. Sometimes it’s a made up title. The title did not exist before your child entered the business and was created out of pressure from them to have a prestige.
If a title is important to your child, it should be a ‘red flag’ of caution to you. Typically, the need for a title can be interpreted as “I’m not confident in myself and need a position to garner the respect I feel I need.” Or perhaps they are afraid of not measuring up and bestowing a title makes them feel they are meeting expectations.
Unfortunately, a title does not solve any underlying issues. If you view your son or daughter as your potential successor, they need to come with a package of what we refer to as the 5 C’s: Character, Capability, Competence, Commitment, and Community. The need for a title represents potential issues with Character and Competence. Perhaps their self-esteem is in need of some work. Perhaps their work ethic needs improvement and they need to illustrate nothing in your business is “beneath them.”
Yes, you can certainly give them a title. The better rule of thumb is to position them to earn any moniker that enhances their name. You would do well to sit down and think through the question “How will my children advance in the business?” If your response is, “I’ll know it when I see it” you are being a lazy thinker. There are definite things you are looking for when you see those things in your employees that cause you to think “they’re ready for advancement” or “they are a real up and comer.” Slow down long enough to identify what it is you’re seeing. Only then can you communicate to your children the kinds of things that will position them for advancing on their own merit, so they earn their way into any title conferred upon them.
By earning their way to the top, when the time comes for transferring assets, your children will be equipped with the skills, knowledge, experience and character to appropriately appreciate and manage the assets.
