Family business owners need to mentor next generation

Tocci stresses to him that informal and off-the-cuff meetings with employees, other restaurateurs, consultants and others can help with innovation.

“The most important lesson to transfer to the third generation is to not get stuck in the ‘This is the way we’ve always done it’ mode,” Tocci says.

In a successful transition from one generation to the next, a parent treats a child as they would any new hire, says David Lassman, a management professor at Carnegie Mellon University’s Heinz College.

“If you bring someone in from the outside, you’d say, ‘Here’s our business, what are our challenges, where should we go?’” Lassman says. He also suggests that owners who tend to be domineering in family situations tone that down, or their children won’t be able to think for themselves or take risks as business owners.

A successful transition can require an owner to let the child make significant changes to the company’s business model, even selling off parts of it, says Lauri Union, a professor of entrepreneurship at Babson College. While products, services or whole divisions may go, what does remain is what Union calls the family’s entrepreneurial legacy.

Union says parents need to, as she puts it, “let go.”

“There is a process for letting go — doing it too quickly can be as bad as doing it too slowly or not at all — and that process varies from family to family and business to business,” she says.

Rita Tabatchnick expects her son Jason to be more than her shadow or stand-in as he becomes increasingly involved in the family’s soup business, Tabatchnick Fine Foods. She is looking for him to put his own imprint on the business.

“The new generation comes up with new desires, new foods, new technology, and you have to listen to their ideas,” says. Tabatchnick, 63, who plans to retire within the next 10 years.

Jason, who began working at the company when he was 13, is on the board and participates in Rita’s meetings, key phone calls and negotiations. When the company’s Somerset, N.J., factory needed extensive renovations last year, Jason evaluated contractors’ bids. When his mother had surgery recently, he took on some of her responsibilities. “He doesn’t just do the grunt work,” she says.

Ultimately, though, owners and their children also need to be prepared for the possibility that the planned handoff might not work out, Union says. Children need to have the room to say, “I don’t know if this is going to work for me. I may need an offramp,” Union says.

Kathleen Kuhn is realistic about the possibility that her son Ryan might decide against taking over her HouseMaster inspection company. Ryan is doing home inspections, getting hands-on experience, and “little by little we’re exposing him to things,” says Kuhn, 57. She hopes he’ll be ready in four or five years.

But while Ryan approached Kuhn and said he wanted to join the Bridgewater, N.J.-based business that Kuhn’s father started 30 years ago, he also thinks about moving out of the area. She would be disappointed if she ultimately must sell the firm, but she wants what’s best for her son.