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Houston expert: Navigating a succession plan for a family-owned business

This Houston tech leader explains the challenges and opportunities that succession planning includes. Photo via Getty Images

Family-owned businesses have unique challenges when it comes to succession. The biggest obstacle is that family members leading the organizations think they know their own children or heirs’ capabilities better than they actually do. The current slate of executives can see the most obvious strengths to some degree, but they often miss the entirety of each family member’s gifts. They may also fail to see what work gives each heir the most passion and job fulfillment.

The second challenge is the emotional connection to family members, which can make hiring or promoting decisions stressful. This can also lead to difficulty with honesty when it comes to family members. On the other hand, some business owners are too tough on the next generation taking over. In either case, finding the right balance between effective work relationships and objective decision-making can be difficult. Then there is the challenge of openness, willingness and objectivity to make the tough calls. One example of this is if the internal family talent has gaps, the executives need to be willing to recruit or promote key talent to fill the gaps to be the most effective team. When a family-owned business refuses this, this can be detrimental and create a problematic future. Like it or not, while family businesses can be exceptionally rewarding, they are still businesses at their core and must adapt effectively to be competitive or to survive future challenges.

Lastly, there is a competitive factor when it comes to succession in family-owned businesses. Most family members that are engaged in the business and in a leadership capacity tend to be highly competitive by nature. Adding to the sibling rivalry that they have faced throughout their life. So, with succession, how does the family keep these competitive forces in check while being aligned in a positive way?

The best way to overcome these challenges is to understand each person's leadership character traits and risks for ineffective behaviors or derailment. Additionally, learning about someone’s drivers, reward needs, or intrinsic motivation can help paint the big picture. When using these objective measures, the family leadership team can get an accurate reading of the talent of each family member as well as get a clear look at the leadership bench strength. There are validated assessment tools that can help business owners understand these characteristics such as in-depth character, risk and motivational measures geared toward leadership development, training and executive coaching.

For example, Jennifer was the CEO of a large residential and commercial real estate company. She was exemplary in the business, built strong relationships and was a go-getter in sales and marketing. Throughout her tenure, she hired top talent and had a natural executive presence. Her husband, George, was the CFO who had the typical high level, brilliant financial smarts and measured everything to the nth degree. Their family-owned business soared to become number one in the region competing with national franchises. As time went on, they planned to transition the business to their two sons. They saw John, one of their sons, as the heir for the CEO position because he excelled in fostering relationships and operations. Therefore, they also assumed he would just pick up on the marketing and sales that Jennifer was great at. This left the other son, Ray, as the new CFO because he was financially brilliant.

However, what Jennifer and George missed was that there were holes and gaps in each of the sons’ skill sets that didn’t quite align with the positions they were to succeed. With a thorough assessment through the CDR 3-D Suite and individual coaching and discussions, the mismatch became evident In fact, one of the sons said he would leave the company if forced to do the parent’s job role. The other son had similar comments. After investing in these helpful tools they re-created the executive roles to “fit” the sons’ profiles and needs. This required adding another key executive to lead marketing and sales for John since he excelled in operations leadership, financial management and relationship building. Ray took on some financial responsibilities but his primary role was business development. He focused on big ideas and business growth. A deep dive into his characteristics and drivers demonstrated how If he were to work with numbers routinely, he would be miserable which in turn would affect the business as a whole.

The lesson learned is that executives cannot necessarily force their children or family into the same boxes or job descriptions they have held. Sometimes, there needs to be a shift or redesign of the job description and scope of responsibility to best fit the incoming executives. The next generation will share some of the same strengths, but will also have different skills and weaknesses. Many will likely be motivated by different aspects of the work and if business owners are not able to identify these inherent capabilities and needs, succession can be unsuccessful.

In terms of conflict or tippy-toeing around difficult conversations, using data can help family-owned business executives and their family members get a clear and objective understanding of their respective talents and needs. The initial work goes a long way and keeps discussions productive and on track. Good data supports productive decisions so that everyone is in a win-win position. When approaching succession this way, generations will be placed in roles that best fit their personality and what they want to be doing. Without this type of data, it is easy to misalign roles which causes problematic performance and conflict and fosters a stressful work environment. When leaders are stressed, inherent risk factor behaviors manifest regularly, which damages performance and relationships. Bottom line, identifying these characteristics before planning succession and using objective assessments provide the data and the blueprint for family-owned businesses to design successful executive teams.

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Nancy Parsons is the president and CEO at CDR Companies.

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UH is now the only college in the country — and the only restaurant facility in Houston — to utilize a robotic food delivery. Photo courtesy of the University of Houston

The University of Houston is taking a bold step — or, in this case, roll — in foodservice delivery. UH's Conrad N. Hilton College of Global Hospitality Leadership is now deploying a robot server in Eric’s Restaurant at its Hilton College.

Booting up this new service is major bragging rights for the Coogs, as UH is now the only college in the country — and the only restaurant facility in Houston — to utilize a robotic food delivery.

These rolling delivery bots come from the state-of-the-art food service robot called Servi. The bots, created by Bear Robotics, are armed with LiDar sensors, cameras, and trays, and automatically return to their posts when internal weight sensors detect a delivery has been completed.

Not surprisingly, these futuristic food staffers are booting up plenty of buzz at UH.

“People are excited about it,” says Dennis Reynolds, who is dean of the Conrad N. Hilton College of Global Hospitality Leadership and oversees the only hospitality program in the world where students work and take classes in an internationally branded, full-service hotel. Launching robot waitstaff at UH as a test market makes sense, he notes, for practical use and larger implications.

The Servi robots deliver food from the kitchen to the table. Photo courtesy of the University of Houston

“Robotics and the general fear of technology we see today are really untested in the restaurant industry,” he says in an announcement. “At Hilton College, it’s not just about using tomorrow’s technology today. We always want to be the leader in learning how that technology impacts the industry.”

Bear Robotics, a tech company founded by restaurant experts and tech entrepreneurs, hosted a Servi showcase at the National Restaurant Show in Chicago earlier this year. After seeing the demo, Reynolds was hooked. UH's Servi robot arrived at Eric’s Restaurant in October.

Before sending the bot to diners' tables, the bot was prepped by Tanner Lucas, the executive chef and foodservice director at Eric’s. That meant weeks of mapping, programming, and — not surprisingly — “test driving” around the restaurant.

Tanner even created a digital map of the restaurant to teach the Servi its pathways and designated service points, such as table numbers. “Then, we sent it back and forth to all of those points from the kitchen with food to make sure it wouldn’t run into anything," he adds.

But does having a robot deliver food create friction between human and automated staff? Not at Eric's. “The robot helps my workflow,” Joel Tatum, a server at Eric’s says. “It lets me spend more time with my customers instead of just chasing and running food.”

Once loaded, the kitchen staff can tell the Servi robots where to take the dishes. Photo courtesy of the University of Houston

Reynolds believes robots will complement their human counterparts and actually enhance the customer experience, even in unlikely settings.

“Studies have been conducted in senior living facilities where you might think a robot wouldn’t be well received, but it’s been just the opposite,” Reynolds says. “Those residents saw the change in their lives and loved it.”

To that end, he plans to use Servi bots in other UH venues. “The ballroom would be a fantastic place to showcase Servi – not as a labor-saving device, but as an excitement generator,” Reynolds notes. “To have it rotating through a big event delivering appetizers would be really fun.”

Critics who denounce robot servers and suggest they will soon displace humans are missing the point, Reynolds adds. “This isn’t about cutting our labor costs. It’s about building our top-line revenues and expanding our brand as a global hospitality innovator,” Reynolds says. “People will come to expect more robotics, more artificial intelligence in all segments of hospitality, and our students will be right there at the forefront.”

Servi bots come at a time of dynamic growth for Hilton College. A recent rebrand to “Global Hospitality Leadership” comes as the college hotel is undergoing a $30 million expansion and renovation, which includes a new five-story, 70-room guest tower. The student-run Cougar Grounds coffeehouse reopened this semester in a larger space with plenty of updates. The neighboring Eric’s Club Center for Student Success helps with recruitment and enrollment, undergraduate academic services, and career development.

“To be the first university in the country to introduce robotics in the dining room is remarkable,” Reynolds adds. “There are a lot of unique things we’re doing at Hilton College.”

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This article originally ran on CultureMap.

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