This past week I attended a full day event put on by IMAQ, the “Institut de la Médiation et Arbitrage du Québec”, which included four separate presentations by experienced practitioners in the field.

Their goal was to “demystify” mediation and arbitration as they pertain to workplace conflicts, and I attended to get a feel for the local med-arb scene here in Montreal. The quality of the presentations was quite high, and it was nice to learn that the alternative dispute resolution world seems to be healthy and growing.

One of the presentations dealt with how to handle a narcissistic person when conducting a mediation. The two presenters were both experienced mediators, but they came from different professions. The first one to speak was a lawyer, which is not uncommon, but the second was a psychologist.

The psychologist offered lots of do’s and don’t’s for dealing with this type of person, and I was reminded of a recent discussion I had with a colleague who told me that he tried to avoid dealing with business founders because most of them are narcissists.

I am not sure that founders are actually true narcissists, but I can tell you that if there is a continuum of narcisism, most successful business founders would score more towards the higher end of the scale for the most part.

But the main idea for this blog post was hinted at in the title, and it dealt with looking forward versus looking backwards.

During a presentation on the various different types of alternative dispute resolution, there was a slide that mentioned that mediators look forward, while arbitrators look backward. Hmmm. I never thought about it like that.

An arbitrator listens to both sides and passes judgment, and ends up issuing a ruling, much like a judge, but with fewer rules and often less formality.

The arbitrator looks to what happened in the past, hears both parties talk about things that happened in the past, and tries to adjudicate and pronounce some sort of ruling that will be applied today to resolve the issue.

A mediator looks at things from a much different perspective, and in many ways cares more about the future than the past.

When you think about workplace situations, assuming that the people involved in a dispute both want to keep their jobs, it is important to find a durable, sustainable solution, which is why mediation is often preferred over arbitration.

When we look at family businesses, it is even more important to look for ways to work things out in a way that makes sense for the long term for the family and for the business.

Some people might say that once you get to the point of needing to bring in a mediator, things must already be pretty bad, and that could be true, but it is a matter of degree.

Ideally everyone gets along and things are harmonious. But often people don’t get along perfectly and they need help straightening things out, and this can sometimes be done with some simple facilitation.

If things start to get even worse, maybe it is time to try something more like mediation, where the mediator tries to find common ground on which to rebuild the harmony that people are trying to get back.

The sooner you recognize that something is amiss and bring in someone to help sort it out, the more options you will have between facilitation, mediation, or even arbitration.

If you wait too long and the dispute gets uglier, then the choices sadly diminish and it will become time to “lawyer up”, and that’s when you get those stories about family businesses that you read about in the papers.

And they rarely have happy endings.

 

Is a blindspot really a blindspot if you don’t know you have it?

As is often the case, this week’s blog subject is based on something that happened to me in real life, and I have accepted the challenge of relating the story in an interesting and useful way.

Since this story involves people in my own family, I will use fake names for them, as I usually do when I talk about real people, and I will adopt my standard custom of employing a pseudonym that starts with the same first letter as their real names.

My daughter wanted me to call her “Sassy”, and she wanted me to call her brother “Rusty”, but he didn’t really like that name, and so somehow we settled on him being “Rambo” instead. If you have children, you probably understand the importance of keeping your kids happy and staying on their good side. Now Sassy and Rambo would make better names for pets than kids, but what the heck.

Rambo and Sassy will be going to a new school in September, and as part of the paperwork that the school has asked for, we needed them to have a physical exam done by a doctor, in part to pronounce them able to participate in the school’s sports programs.

So I made an appointment for them and brought them to see my doctor to get them checked out, have the papers officially signed, and thereby cross another item off the checklist that sees them one step closer to being ready for September.

Sassy went first, initially going with the nurse for noting her height and weight, as well as an eyesight verification. Rambo followed the same sequence, except that after the doctor finished with him, I got called in because there was something noteworthy that he wanted to share with me.

The doctor handed me a piece of paper on which he had written 20/60 and 20/50, which were the results of his eye test. What? Really?

How could this be, he never once said anything to us about having trouble seeing? I guess his vision has always been bad because he told us that he has not noticed any deterioration.

So I had the paper in my hand with the numbers on it and Sassy saw it and asked what it was. I told her that we would talk about it later, and then she said “Is Rambo blind?” She does have a tendency to exaggerate, even though I have told her a million times to stop it.

But when I confirmed that, yes, Rambo apparently suffers from poor vision, she proclaimed “I knew it! I knew it!” Apparently, Sassy has been telling her parents for years that her brother doesn’t see well, and we ignored her.

So getting back to the question I asked at the beginning of this post, the answer is a definite YES. Even if you don’t know that you have a blindspot, it’s still a blindspot. And if you have an observant sibling, they may have noticed it.

Everyone has blindspots, and it isn’t always easy to acknowledge them, understand them, accept that they are real, and manage them. It can be helpful to learn about them because that really is the first important step to doing something about them.

But like anything else in a family, and especially in a family business, the way that you learn about your blindspots, and how your family members use that information makes all the difference in the world.

The importance of Self-Awareness cannot be overestimated, but having a family where each member helps the others overcome weaknesses is a wonderful gift that is even more precious.

It is so much better than a family where members use people’s weaknesses against them, but unfortunately that happens all too often.

When people cite statistics about family businesses, they often talk about how many such businesses exist, what percentage of GDP they produce, and how many people they employ. That’s a lot of human resources.

Most of these businesses, however, are actually quite small, so very few of them have a human resources, or “HR” department. Some companies, when they get big enough, will get to the point where they actually hire someone for the role of specifically looking after employee issues.

In my father’s company, we were well on our way to 200 employees before he decided that it was time to hire a “personnel manager”, as the position was often called back in the 80’s.

His job was to look after labour negotiations with the union, as well as benefits, hiring, grievances, and eventually an employee assistance program. The greatest relief in this hiring was experienced by our CFO, because before that, all this stuff was just considered “admin”, and was therefore under his responsibility, by default.

Lately I have been noticing that many people are throwing around the term “HR” more and more. Working in Montreal, I spend lots of time dealing in both French and English, and for some reason I feel like I hear the term (“RH” – resources humaines) quite often.

It could be my imagination, but it feels like it has come to take on a meaning that is broader than the sense of employee work issues. And maybe that’s not a bad thing, because I think it lends itself quite well to my new interpretation.

It is nice that we actually consider people to be a resource, you know, something to be valued and the supply of which you need to spend time and money acquiring and developing. But “resource” also feels pretty impersonal, more like a thing than a living, breathing, feeling person.

So when someone says something like “I don’t like to get into all that HR stuff”, or “our company has been having lots of HR problems”, I like to think about it as if they are issues about Human Relations instead.

There are very few jobs in any company where you don’t need to worry about relations with other humans. We all do it, and we could all do it better too.

You can have one personnel manager whose job it is to deal with major employee issues, but you can’t have just one person in any company worrying about human relations.

Of course like most stuff surrounding the way things work in a business, everything starts at the top and works its way down. The way the owners treat their hired employees becomes a huge part of the culture, and good culture beats great structure.

In a family business, as usual, things are a bit trickier. Do you treat your VP like your VP, or like your daughter? Do people with the same last name as the boss get treated better than others, or worse?

How about the relationships with family members at work versus relations with those same people outside of work? Should they be the same, or should they be different?

There are no standard right or wrong answers, but there are plenty of things to think about and talk about. In smaller companies, everyone knows everyone else, which can be good or bad. As the business grows, it gets harder to know everyone, but communications from top to bottom become even more important.

Culture and communications, and developing good employee working relationships, are not just things that matter in large organisations. They can be even more important in smaller companies, and in family businesses, they can be a key factor in the success of the business and the family.

And you cannot just delegate this stuff to the HR department and the personnel manager.

 

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This week’s blog post is one that I have been thinking about for a while, because I really liked the story from the time I started blogging, but I could not figure out how to relate it to the subject of business families. Until now.

The title, asking where the problem was, comes from a question that my father asked me over a decade ago, after I had tried to describe a situation that I needed his help with.

My wife and I had a couple of toddlers in the house back then, and during a trip to Costco, we saw a swing set with a circular slide that we thought would look great in our backyard. We hastily decided to buy it, not realizing the monumental task of assembling it that lay ahead.

Now I love Costco because they sell really good stuff at the lowest prices you will likely find anywhere, but that does not necessarily make their merchandise “user-friendly”. I am not the most “handy” guy either, but my wife is actually one of the best IKEA furniture assemblers I have ever met.

How hard could it be? “Next to impossible” was the eventual answer.

Literally four or five weeks later, the structure stood in our yard, but just barely. We hesitated to allow the kids to use the equipment, because we could not trust the thing the way we had put it together. “Maybe your Dad could help us”, suggested my wife.

So I called him up and described the issue as best I could. “Is it a problem of design, material, or workmanship?, came his question. I thought about it and answered “Yes, Yes, and Yes.”

In retrospect, I had not realized how good he was at getting to the root of the problem before trying to offer solutions, and I Iike to think that I inherited some of that from him, to make up for the lack of handyman skills that I got.

He came over a couple of days later to analyse the job we had done and immediately began shaking his head at the monstrosity we had cobbled together. Within an hour, we had put together a list of material and we headed to the local lumberyard to buy what we needed to address the shortcomings.

A couple of days later, after he returned with his tools and equipment, we had a veritable fortress of a structure. It was now strong enough for the whole family to climb aboard, and was eventually a heck of a job to remove later when the kids were too big for it and me opted for a pergola instead.

The business family lessons here are numerous. Dad founded a company with certain skills and abilities, some of which I inherited, some of which I did not. We still managed to work together and produce a great result, but it was not necessarily straightforward.

Let’s look again at the design, material, workmanship question. How does the family design the way it will work together, especially over the long term, and how are they going to govern the family enterprise as one generation will make way for the next?

The material of the business family is basically the family members, the human assets that are the heart of the operation, the ones upon whom the focus should be (as opposed to the widgets the company makes).

Is the family putting the emphasis on making sure the materials are the best they can be, thinking about education and finding the best role for each person?

What about workmanship? Hmmm, this one took a while for me to put my finger on. I am not 100% sure that this is the best fit for the analogy, but I am going to go with relationships.

When looking at a business family and attempting to diagnose where to begin to help them, you might ask if their key issue is Governance, Human Capital, or their Relationships.

Hopefully it won’t be all three!

 

For the past three years I have been writing this weekly blog that deals mostly with issues surrounding family business. Some subjects have been treated more than once, in different ways, and I have touched on a variety of things to think about.

Today’s subject is one that I am touching on for the first time, and to be honest, I am not sure why it has taken me this long to get to it.

A few weeks ago I was reading a book called The Trusted Advisor Fieldbook, and there was one sentence that really struck me, so I highlighted it and put it into the “future blog post” pile. Here is that sentence:

For most human beings, the only thing worse than being controlled, is being controlled AND being lied to about it at the same time. 

This sentence was in a section that dealt with people’s attempt at “closing” a sale with a potential client. I agree that closing objectifies the customer and I personally HATE being “closed”, and hence I stay as far away from those techniques as possible.

But what struck me was how applicable that sentence is to the world that people in business families live in for large periods of their lives.

All too often the generation that is currently in the driver’s seat will be preoccupied with staying in control of as many things as possible for as long as possible, and they will usually believe that they are acting this way because they know best. This is where they may also be lying to themselves.

Those who are in the “Next Gen” seats (now often called the “rising generation”) are often left to wait for their turn behind the wheel, and that can be a very frustrating place to be, just ask Prince Charles.

Thankfully, a family business has quite a few moving parts, which offers forward-thinking families the opportunity to take a very incremental approach to transitioning control from one generation to the next.

There are roles within the management of the business where responsibility can be handed over gradually to those who show an interest and some abilities, to gain experience and slowly move into more senior roles.

There are ways to transition ownership of shares from one generation of owners to the next, and the ways to do this are limited only by the imagination of the CPA’s and lawyers you can find to put together the legal documents.

And let’s not forget the family circle, where some family members can be encouraged to look after the non-business issues, and some form of family governance structures can begin to be instituted.

In the end, if it is to remain a “family business”, then the family will be expected to continue to control the business, into the next generation. But how are they going to control it, if they have not figured out how they are going to work together?

The lawyers and accountants can come up with all sorts of ways to make things fit together in the legal sense, but if the family harmony is not there, chances are something is going to give.

Control is a very tricky issue to figure out, and when it rests in the hands of fewer people, it is often much simpler. But when you go from one generation of owners to the next, you often increase the number of people who will be sharing control.

When a parent is the person who “controls you” by being the one who calls the shots surrounding important things like wealth, it is one thing.

But in a situation where that family member is a sibling, or a cousin, then being controlled can be much more difficult and uncomfortable.

If that is a scenario that you are looking at someday, you may want to begin the process of working out those control issues NOW, or else some family members may begin to feel like they are being controlled in ways that they may not stand for.

And don’t think that you can lie your way out of it either.