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modernize a generational company

Many business owners who have been running the same company for the better part of their lives see the business as their legacy—a future for their children, grandchildren, and generations to come. It’s not uncommon for them to hold close the things that brought success in the past, which can also lead to resistance when it comes time to introduce new technology and modernizing a generational company.

To understand the reasons for the resistance to modernization, it’s important to understand the foundation of the business: why, how, and where it all began. Business owners may seem stuck in their ways, but consider that when they first started, there may have only been one way to accomplish a certain task or project. They feel that they have mastered the skill, which may have taken decades. Why would they want to start all over again? In a generational business, it may be the case that their parents or grandparents taught them to run the business in a certain way. The accounting department may have been run by the owner’s grandmother, then mother, and now spouse or sibling. Taking the time to understand the whys behind the way things are done will help you to understand how to overcome resistance to change.

We often see this type of scenario when a daughter, son, or grandchild has the opportunity to play a bigger role in the company, or even take over. Depending on the complexity of the organization, establishing a family office can be a helpful strategy for multi-generational enterprises. Family office services go far beyond the nuts and bolts of the business itself, working at the family level to resolve internal conflicts, manage assets, provide day-to-day business support, offer CFO services, and much more. Working with a family office service group can help to support a portfolio of businesses, preserving the family legacy for many generations to come. Family office support can also offer strategies to fuel your modernization goals. If you’re facing resistance to revamping the way things have always been done, start by taking a step back.

Where to begin when modernizing a generational company

Taking business procedures and migrating them to the cloud can admittedly feel like losing control at first. An older gentleman who has mailed his invoices off and waited for a paper check for the past 50 years may find your suggestions unrealistic; the concept of the cloud can be confusing even for younger business owners and staff. It can also seem intimidating and time-consuming to learn new procedures. But the benefits of modernizing business procedures, such as accounting, can be tremendous. It’s important to take your time and gain the buy-in of all stakeholders before diving in. If you’re growing into a more significant role in your family’s enterprise, below are some ideas to keep in mind.

1. Take baby steps

One step at a time. Modernizing a generational company will take time. If the process moves too fast quickly, employees and the business owner will be left feeling overwhelmed, making them more likely to revert back to the way they’ve always done things. Instead of modernizing an entire company at once, start with one department at a time. For those business owners who are overly hesitant about the idea, have an overall strategy, but roll it out one piece at a time. In the back office, start with a time-consuming but peripheral task, such as expense reimbursements. Then move to inventory, payroll, and so on. When the business owner sees small improvements, the resistance will slowly fade.

2. Focus on who makes the company great

When migrating a company to the digital era, it’s important to not lose sight of what—and who—makes the company great. The staff will be the ones using the new tech on a daily basis. Without their understanding and acceptance, your efforts will be deemed useless or worse. When migrating accounting to the cloud, you must have the buy-in of the department and ensure you aren’t piling on the workload when they are already busy. Ask for feedback, understand their biggest pain points, and show them how the changes will improve their work.

3. Educate the users

While you’re focusing on the users, be sure you understand their biggest pain points and frustrations. Don’t just tell them that all of their problems will be solved with one app. Show them how, let them test out the technology before it goes live, answer questions, and provide ongoing education and support. Let them see for themselves how much time can be saved by reducing the need for manual data entry. By focusing on the users and educating them, you will have your greatest chance at gaining their acceptance and buy-in.

4. Respect the foundation and traditions

Modernizing processes and procedures doesn’t mean that traditions have to be thrown out the window. Hold close to important traditions. What this looks like in practice will vary and really depends upon the company. For example, if a business owner doesn’t feel comfortable relinquishing total control over accounts payable, include him in approval workflows. These are an ideal way to maintain that sense of control, transparency, and having the final say while removing the manual workload. And of course, never stop educating new employees on the roots of the company. Even though the company is stepping into the modern age, the stories and background should never be forgotten.

Bringing new technologies into a long-standing family business can be a difficult task. With proper planning and a respectful approach, it can be accomplished with the business owner’s approval and appreciation. If you’re a part of a generational company and need a hand with the digitization process, we are here to help. Our experienced team can work with you and the business owner to find a way to meet the needs of the company, while also improving processes and reducing vulnerabilities. Contact us to schedule a consultation.

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