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The Hawaii Family Business Institute powered by:
O’ahu Maui
Hawai’iIsland
Kaua’i
57Survey Interviews
15In-Depth Interviews
Profile»98% operating in Hawaii ≥ 10 years
»58% ≤ $10M in annual revenue
The Hawaii Family Business Institute powered by:
Business Challenges
Business
Employee Quality 49%
Industry Change 35%
Competition 25%
The Economy 23%
Cash Flow 21%
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Leadership
Business Transition 42%
Succession 40%
Management 28%
Leadership 28%
Family Dynamics 26%
Next-Gen Survey TopicsI. Preparing for the Family Business?
II. Succession Plan?
III. Transition Challenges?
IV. Conflict?
V. Generational Similarities/Differences?
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I. Preparing For the Family Business?
What Did You Do Before Entering the Family Business?
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51%
23%
16%
9%2%
Worked for another company: 51%
At school earning a degree: 23%
Worked for the family business myentire career: 16%
Other: 9%
Not sure/Prefer not to say: 2%
What Were the Advantages of Working Elsewhere?
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Gaining useful experience 55%Building credibility internally and externally 14%Gaining confidence 14%It was my part of my development plan 7%Networking 3%No advantage 3%Not sure/Prefer not to say 3%
Is Your Role in the Family Business Clear?
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Performance expectations are understood 92%Current role is clearly defined 88%Future career path is clearly defined 84%Process to develop my skills is in place 73%I have an individual development plan 59%I have had open discussions about my career path 52%
Preparing for the Family Business?“Working outside of the family business taught me how to be mindful, and it exposed me to new ideas and how to work with different people…difficult people.”
“I feel like I missed a big part of life by coming home directly out of college. I still dream about living in NYC.”
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( )
II. Succession Plan
Does the Family Business Have a Succession Plan?
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51%Yes
37%No
vs.
12%Not sure / NA
What is in Your Succession Plan?
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A unifying strategy for the future of the business 59%Preparing and developing the successor before succession 55%Retirement plans for the current leadership 52%Ownership transfer or sale plan 48%Estate plans 34%Process for selecting new leadership/successor 28%Not sure/Prefer not to say 7%
Succession Plan?
“Dad said, I’m out of here in two years and you are IT. So, I thought, what do I do next!”
“Our first priority was making sure Mom and Dad were taken care of for the rest of their lives, but we had no idea how to make that happen.”
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III. Transition Challenges?
What Have Been Your Personal Transition Challenges?
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Dealing with family dynamics 47%Convincing the older generation(s) to let go of responsibility 23%Being undercompensated for the value I bring 18%Gaining the respect of my coworkers 16%Working harder than others to prove myself 16%Gaining the respect of my sibling(s) 12%Not being given the opportunity to take on more responsibility 7%Being asked to take on tasks I felt unable to do 5%Not feeling involved in the bigger picture 5%Gaining the respect and confidence of the older generation(s) 4%None of the above 39%
What Does It Take For the Older Generation to “Let Go?”
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Strong performance in aspects of the business I’m responsible for 62%Gaining their confidence in my ability to lead 62%Demonstrating my understanding of the business 38%Ensuring the older generation(s) has a meaningful future role in the company 23%
Ensuring the older generation(s) has a strong financial retirement plan 15%
Meeting clear expectations 8%Nothing 8%Not sure/Prefer not to say 15%
Transition Challenges?
“Mom said she would retire five years out… that was 15 years ago.”
“I don’t want to push him out, but at the same time I can take on so much more and things need to change.”
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Next-Gen Internal Priorities
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Make business operations more efficient 68%
Emphasize long-term strategy and business planning 46%
Clarify management roles and responsibilities 30%
“Professionalize” the family firm 28%
Launch new products or ventures 21%
Update financial reporting and performance management process 18%
Implement other big ideas for growth 51%
Diversify into new products and/or services 44%
Do something meaningful and special 40%
Expand the business into new geographic markets 26%
Start up a new entrepreneurial venture 19%
Next-Gen External Priorities
Future vision/goals/strategy 30%Generational differences regarding business operations 30%
How decisions are made 25%Business culture differences among generations 23%Lack of family communication 21%Succession-related issues 16%Competence among family members in the business 16%
Major Sources of Conflict?
IV. Conflict?
Conflict?
“My education taught me to challenge ideas, yet culturally I was taught to respect my elders and their ways. Balancing this is confusing.”
“It was kind of like untangling Christmas lights.”
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V. Generational Similarities?
How Similar Are You to the Older Generation?
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Management styles 44%Risk tolerance 59%Lifestyle/work-life balance 65%Commitment to social responsibility 66%Strategic direction for the company 70%Philosophy/core values 81%Company vision 88%
Generational Differences?
“I am much more conservative than my Dad, he is the entrepreneur and has so much more experience than I do.”
“We are a lot alike, because he was my mentor and leader.”
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Bottom Line:How Do You View Your Family Business Participation?
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61%16%
11%
9%4% An opportunity: 61%
A comfortable option: 16%
I never considered anything else:11%
The only option: 9%
An obligation: 4%
If You Had To Do It All Over Again?
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60%21%
18%
2% I wouldn't do anything differently:60%
I would spend more timeunderstanding the business andfamily dynamics: 21%
I would spend more time workingoutside of the family businessbeforehand: 18%
I would not join the familybusiness: 2%
Bottom Line!
“On the good days, this is a great opportunity, on the bad days this is an obligation, but I don’t think I would have changed much.”
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