Home' Trinidad and Tobago Guardian : September 22nd 2016 Contents BG8 NEWS
BUSINESS GUARDIAN www.guardian.co.tt SEPTEMBER 22 • 2016
Adam Sabga, managing direc-
tor of Standards Distributors
Ltd, is the third generation
in his family to be operating
that company and, according
to Sabga, the third generation
success his company enjoys is the result of love
for the brand, the company and staff, as well
as the desire for continuity in the generations
"You will always have challenges but a mod-
ern-day company needs to roll with the punch-
es. You need to adapt, you need to change, you
need to look at what you are doing internally
and externally and adapt to suit," he said.
For people in family businesses, getting ready
to hand over to the third generation, Sabga
advises: "Never forget where you have come
from because, at the end of the day, that s your
DNA. Once you never forget that, it will chart
your way forward."
With 11 locations in T&T and two in Bar-
bados, Sabga says his company is defined by
its slogan: Never Beaten in Quality and he is
working to ensure the company continues to
do just that. He is currently focused on upgrad-
ing stores and maintaining the company s posi-
tion as an employer of hundreds. He said he
is not daunted by challenges such as problems
with the supply of US currency, or the economic
Plan for future success
Third generation family-operated business
success is an achievement that comes with
having a plan, says family adviser Annette
She said third generation or cousin consor-
tiums are generally successful, even though
there have been some "rags-to- riches-to-rags"
stories. The key, she explained, is that the family
has to put procedures and policies to create
boundaries between business and family.
"Indeed, the third generation often craves
proper structure to ensure continuity and also
avoid some of the conflicts they may have seen
among the second generation. I have seen many
third generation members with a high degree
of emotional ownership; they know their grand-
parents and want to continue the legacy of the
founder/grandparents," Rahael said
She recommends an examination of the lead-
ership mechanism when a family business
reaches its third generation.
"Family businesses are increasingly being
run by sibling and cousin teams in a shared
leadership arrangement. My research into co-
CEOs shows that even at the highest level,
leadership can be shared. Do not remain stuck
in a model that worked in the past, think more
creatively," she said, adding that a distinction
must be made between leadership succession
and ownership succession.
Rahael said: "This is not a one-time event.
There are stages to this plan. Identify business
needs going forward, decide on the best lead-
ership structure, select new leaders, have a set,
detailed and comprehensive training programme
and, finally, handover."
Noting that challenging economic times are
not an excuse for succession planning to go
wrong, she said:
"In hard times, the senior member sometimes
feels that the ship needs his steady hand and
experience etc and does not want to adhere to
the plan and let go, or if no plan is instituted,
finds every other excuse not to pass on lead-
Handing over to new leader
Rahael admitted that it can be a "baptism
of fire" to introduce a new leader of a fam-
ily-operated business in recessionary times but
said there is no reason why there cannot be
smooth transition from the second generation
leader to the third generation successor. What
is important, she said, is proper preparation
and "some mechanisms" to access the wisdom
of the senior generation.
She added that succession is a marathon,
not a sprint, so children should be exposed to
the business from an early age.
"This must be portrayed as an opportunity,
not a birthright or an obligation," Rahael said.
"Some of them may choose not to work in
the business and that does not mean that they
do not have a role, or that they should be made
to feel guilty. Passing on shares is not equal
to passing on operations. All next generation
members must know enough to function in
their role as shareholder only, or owner/man-
Rahael also recommends creating a family
charter or constitution which incorporates
policies, a code of conduct and communication
that must be followed, Generally, talking openly
as well as having regular meetings is a plus for
family-operated businesses, she said.
Overall, family businesses power a large per-
centage of the world economy and are, there-
fore, vital to any country.
"Succession does not happen by osmosis,
nor is it likely to succeed in a seriously dys-
functional family where there is minimal com-
munication. Owners need to take a realistic
look at the situation and examine all their
options, sale included.
"Additionally, families may decide to prune
the tree and some branches sell off to others.
This is a mechanism adopted by larger families
that are geographically spread out or where
values are too diluted and have become incom-
patible," Rahael said.
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