Imagine starting and building a successful business, then 20 plus years later, you’ve decided its time to pass it on to the “next generation” within the family.
Cross-generational businesses are family businesses which are passed from generation to generation. In other words, one generation decides to retire and pass the reins on to the next.
To wit, Troy-based Harvey Hohauser & Associates is a Strategic Cultural Executive Recruiting firm. Established 30 years ago by Harvey Hohauser, the firm has now expanded to having international affiliates in 34 countries. The firm is now led by Hohauser’s son, Todd, who became involved in the company in 1988, formally joined the business in 1999 and assumed the role of the president in 2007. His father, Harvey, recently retired.
Hohauser & Associates prides itself on its ability to locate, screen, assess and integrate leadership in private, family businesses and publically-traded companies. The firm takes great pride in the success of filling client’s needs with candidates who are carefully screened, interviewed and selected appropriately.
I recently discussed the challenges of assuming leadership of a successful family business with Todd and asked for this perspective on taking it to the next level, challenges confronting the company and employment growth areas of opportunity.
Lee: Hohauser & Associates has been in business since 1986. What are the keys to your success?
Hohauser: Putting our clients first, going out of our way 24/7 to answer their questions and finding the right people for their specific cultures are two keys to our success. Our tailor made search process, unique to each project, is designed to successfully locate, assess and integrate executive leadership. We know the myriad of challenges that may arise when companies hire new leaders; our process is designed to proactively address these potential pitfalls before they happen.
Lee: Your father turned the reins over to you in 2007. At what point did he know you were ready and did you believe you were ready to take over?
Hohauser: Working primarily with family owned entities, we have seen the right way to transition a business and the way which leads to chaos and potentially the end of the business entity. Harvey was self-actualized enough to realize, and I directly quote, “I am the problem”. He knew that he was key in the success of the business in its first stage and that in order for the business to evolve, he would have to get out of the way and allow the next generation to lead. By constructing an Advisory Board of clients, referral sources and friends; as well as sending me back to Walsh College to obtain my Master’s Degree, he groomed me to become the leader of our firm. Over time, and through demonstrating competency, Harvey became more confident in my abilities and the financial performance of the firm improved so he was comfortable with taking more time off.
Lee: Transitioning a family business can be a challenge. How did your family handle it and how difficult was it for your father, Harvey, to let go?
Hohauser: In the first 10 years, Harvey and our advisors had many conversations about the transition. This frequency of conversation allowed us to get more comfortable with the change in leadership. By addressing all of the components of succession planning clearly and specifically, it helped us to all become more comfortable with the transition.
Lee: And how were you prepped to take over?
Hohauser: I was prepped to take over by incrementally, over the years, becoming more and more involved in our executive search practices. This included more and more direct communication with our clients and eventually taking over specific client relationships. Our Advisory Board and getting a Master’s Degree also prepared me to take over.
Lee: Regarding the company’s vision, how has it evolved over the years and where do you see it over the next three-five years?
Hohauser: Our vision has always been, “Harvey Hohauser & Associates will be the most trusted executive search firm by enhancing the success of our clients, candidates and employees.” The only thing which has changed is an increased focus on assisting family-owned businesses.
Lee: What advice would you give to other businesses started by a parent and being transitioned to a family member?
Hohauser: Be certain your next generation works for some time out of the business prior to joining the family business (e.g. – 3 – 7 years). I would recommend that the next generation enter the business at a “line manager” level and not an executive level. This will support: a) The next generation leader learning the entire business operation. b) Encourages buy-in and support from the rest of the employees in to the next generation.
Also, have open and ongoing conversation with the family; make a plan and write it down.
Lee: As an executive recruiter, how’s 2016, so far, and how’s the employment market looking for the city and state and which jobs are growth areas?
Hohauser: Baby boomers are retiring and dying, millennials are not buying into the corporate environment and want to be the next Zuckerberg. Therefore, there is a major gap in talent in the United States. Employers need recruiters more now than ever. We have been busy for the last couple years and I foresee it continuing for a couple more.
Technology is always a growth area. New technology is developed, established business operators are not educated and/or proficient with the technology and they need experts to educate them and assist their organizations in implementation of same.
Lee: Other advice.
Hohauser: Read science fiction. What I read twenty years ago is coming to fruition today; the internet, Wi-Fi, autonomous vehicles – these were all concepts explore in sci-fi years ago. The sci-fi of today will help business owners understand the potential future.
For more information, please visit www.hohauser.com.