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Advice You - Can My Kids Run The Business?
How can you turn the business over to your children without creating chaos--- This is probably the toughest question any business owner that has family working in the business will ever face. However, the answer is simple. The answer is….. It depends. It depends on how well you (the owner) have prepar
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ed yourself and your child for this transition. Have you planned this out? Has your successor been trained, developed and prepared for the transition? This is pretty easy if you only have one child in the business and he/she just happens to be the next Jack Welch of wholesale distribution. This child
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
has worked outside the business for someone else for a minimum of five years. They have completed their MBA and they worked their way up in your organization starting in operations or customer service. They don’t walk around with their silver spoon visible and they don’t wear their family title on the
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
r sleeve. “Piece of Cake!”
Let’s face Reality--- That scenario, although it certainly does exist, is the exception and not the rule. In most cases privately held businesses generally have several family members working in the business. When the president has more than one child in the business, thin
Let’s face Reality--- That scenario, although it certainly does exist, is the exception and not the rule. In most cases privately held businesses generally have several family members working in the business. When the president has more than one child in the business, thin
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
s start to get more complicated. Before we dive into that challenge, “How do we select the next President?” let’s review a few statistics.
• Family business is the driving force behind the US economy providing over 50% of our employment
• 59% of family owned businesses have only 1 or 2 owners
• 25%
• Family business is the driving force behind the US economy providing over 50% of our employment
• 59% of family owned businesses have only 1 or 2 owners
• 25%
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
of family owned businesses surveyed in 2004 stated they would seek non family member CEO’s for succession
• Key areas that family owned businesses seek advice and counsel on include:
--- Strategic Planning
--- Organizational Design
--- Operational Effectiveness
--- Leadership Development
--- Suc
• Key areas that family owned businesses seek advice and counsel on include:
--- Strategic Planning
--- Organizational Design
--- Operational Effectiveness
--- Leadership Development
--- Suc
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ession Issues
--- Compensation
--- Sales Effectiveness
--- Risk Management
Now, how do you decide on who should be the next President? If you are not one of the lucky few described in the opening scenario and you have multiple family members working in the business, your stress level is already at
--- Compensation
--- Sales Effectiveness
--- Risk Management
Now, how do you decide on who should be the next President? If you are not one of the lucky few described in the opening scenario and you have multiple family members working in the business, your stress level is already at
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
a high point. First, many if not all family members working in the business have feelings of entitlement to some degree. This is generally true of at least one if not all of the president’s kids. Choosing the next president becomes even more difficult if the children have used their name as a title in
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
tead of the actual title of the job function they performed and the position they hold in the company (This is often unintentional and some kids don’t even realize it). This difficulty increases exponentially if none of the kids have demonstrated a high level of competence, respect for all employees,
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
eadership skills that pattern the servant style and at least some promise of potential to fill the president’s shoes.
Although the majority of parents would prefer that their children take over the business and carry on the family legacy, this is not always the best option available. I know it is di
Although the majority of parents would prefer that their children take over the business and carry on the family legacy, this is not always the best option available. I know it is di
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ficult for any parent to admit that their child may not possess the skill sets necessary to take over as President of the company. However, that situation actually does exist in many family businesses.
What are the options if Junior isn’t ready? --- The first two questions to ask yourself are: “Wil
What are the options if Junior isn’t ready? --- The first two questions to ask yourself are: “Wil
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
Junior ever be ready?” “Does Junior have the ability to learn how to become President?”
As difficult as it is to accept, your answers to these questions alone are not good enough. If you have a Board of Directors, you should solicit their input and recommendations. Hire a Human Resource Consultant
As difficult as it is to accept, your answers to these questions alone are not good enough. If you have a Board of Directors, you should solicit their input and recommendations. Hire a Human Resource Consultant
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
o do an assessment of not only Junior but other executives in your organization that may be qualified for the Presidency. Conduct 360 degree reviews to get input from peers and subordinates. Precisely define the Presidents role and responsibilities and match these requirements to Junior’s skill sets.
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
f you don’t have a board, create one before the transition. Include the following action items as part of the transition plan:
• Create a development transition training program for the new President (This should be designed as an internship)
• Clearly define the former Presidents role after the tra
• Create a development transition training program for the new President (This should be designed as an internship)
• Clearly define the former Presidents role after the tra
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
sition. Will he remain and come into the office? Will he become Chairman of the Board? What responsibilities will the former President retain?
• Manage the expectations of other family members. Do not allow family tension to create tension in the business. This could lead to employees taking sides.
• Manage the expectations of other family members. Do not allow family tension to create tension in the business. This could lead to employees taking sides.
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
• Use your attorney to cover all legal issues
• Create a real Board of Directors ------ If you want to set up a board or are looking for an outside board member, let CEO Strategist help. www.ceostrategist.com
The family business structure can be complex and confusing. This is especially true when n
• Create a real Board of Directors ------ If you want to set up a board or are looking for an outside board member, let CEO Strategist help. www.ceostrategist.com
The family business structure can be complex and confusing. This is especially true when n
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
merous family members work in the business. The business is composed of interdependent relationships between functions and people that depend on the ability to work toward common objectives. A family owned business with multiple family members has twice as many opportunities for mistakes, resentments
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
nd complacency. Teamwork is essential and effective communication is critical. It is of paramount importance that employees are recognized as the true reason for success.
Family issues must not penetrate the business environment. Holding family business meetings, off site, on a regular basis is highl
Family issues must not penetrate the business environment. Holding family business meetings, off site, on a regular basis is highl
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
recommended. These meetings should be used to air feelings, check boundaries and clarify roles and responsibilities as they are being played out. The President must keep his finger on the pulse of the company culture and environment. Family members must be challenged as issues arise that are detrimen
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
al to the long term success of the company. Some companies create a “Code of Conduct” just for this reason. Regular confidential employee surveys are also a useful tool in this regard. (E-mail rick@ceostrategist.com for a complimentary copy of “A Guide to Leadership Succession in the Family Business”
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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