Resistance to change can destroy a family business

Resistance to change is a common theme in everything from businesses to societies to relationships and beyond. Comfort is a powerful feeling. It’s what we strive for as human beings. Whether we’re working a job to provide a more comfortable life for our families or looking for the most comfortable place to sit in a room, comfort is often the goal. 

But the pursuit of comfort can also lead to stagnation. Without discomfort, we never grow. That’s especially true in business. In our era of rapid technological change, it can be hard for even the world’s largest corporations to stay efficient and relevant. But it’s even more pronounced in a family-owned or closely held businesses. Resistance to technological change in a family business can be a death sentence. 

The status quo

Put simply, the “status quo” is a clear and present danger in a family business. These businesses are usually run by their founders, and those founders tend to be older leaders who built a successful business without technology. “If it ain’t broke, don’t fix it” is the attitude I often encounter among family business leaders resistant to change. But the truth is, it is broken — they just don’t know it yet. It’s a generational thing. I call it “the yellow pad” generation. As an example, 10 years ago my father-in-law was proudly resistant to technology. But today, he’s been essentially cut off from basic services like setting a doctor’s appointment. By the time he realized his folly, it was too late. Too many family businesses often make the same mistake. The role of technology in the success and sustainability of a family business is not going away — it’s increasing. And it’s up to the next generation of leaders to usher in a new era, often against the wishes of the existing family business leader. This puts the next generation in a sticky spot. 

How to smash the status quo and influence leadership 

Since resistance to change in a family business is a generational problem, it requires a generational solution. It falls on the younger generation — those in line for succession — and the older generation to enact change. But in this case, the younger generation must take the lead — though it’s not an easy proposition. A study in the European Journal of Family Business in 2020 found that several factors potentially have the greatest impact on decision-making and the implementation of change processes in a family business. They are: 

• The generation of the head of the business
• The influence of interest groups both within the family and the business
• The greater (or lesser) participation of professionals outside of the family. 

The biggest problem I see in my role as a family business advisor is that the younger generation lacks influence in the business. But there are steps the next generation can take to exert their influence, and eventually, solve the technology “problem” in the family business. 

1. Respect the position of the older generation.

Resistance to change is born of fear. The older generation fears that if they change too much in their successful business, it will cease to be successful. Next-gen leaders must overcome this resistance by listening to these fears and address them in a logical manner. 

2. Create solutions.

Devise solutions that will not only address the technological needs of the company, but ones that also address the specific fears of the older generation. Demonstrate how a change to a technology solution will advance the business without losing any of the operational approaches that make it successful. 

3. Come armed with the facts.

Collect and present the facts — not just the theory. Do your research and determine the best practices for your industry, and the data to back it up. 

4. Focus on the bottom line.

Demonstrate to senior leaders you see how implementing technology will positively impact profitability.

5. Have a plan.

Identify specific steps you must take to foster a decision about new programs and processes you want to implement. And if the older generation doesn’t bite, don’t give up. Go back to the beginning and revisit the process later. 

Today’s businesses run at the speed of technology. Young family business leaders must influence decisions around technology if they are to lead the business into a profitable future. With a good strategy and some patience, both generations will be satisfied, and the business will be set up for success.