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5 Things you Need to Know: Family Meetings

This week we are back to the “5 Things you Need to Know” format, and our subject comes via an emailed question.

An overseas colleague and fellow Family Firm Institute member recently asked me for my thoughts around family meetings.

Rather that send her a lengthy reply, I told her I would write this blog in response, and I hope that many of you find it useful.

(Note: we are talking here about enterprising families having an occasional get-together with many family members, some of whom are involved in business matters, along with many who are not.)

 

  1. Involve Many People

The more people you can have involved in planning the meeting, the better. Input and ideas should be solicited from as many of the participants as possible beforehand, and it should never appear to be a one-person show.

Furthermore, on the “many people” front, the execution of the meeting(s) or day(s) should also feature as many different people in leadership roles as possilbe, and active involvement by everyone (as opposed to passive) is a must.

 

  1. Not Just Business

The business aspects of the meeting are naturally important, otherwise you likely wouldn’t go through the trouble of officially convening everyone in the first place. But please resist the temptation to make it “all business”.

If you want people to look forward to these events and attend them regularly (see No.3, below), they ought to have reasons to look forward to them.

A mix of business, fun as a large group, education, fun in smaller groups, downtime, physical activity, icebreakers, and just plain socializing are all worthwhile considerations for the schedule.

 

  1. Regular, Repeating Forum

An error that some families make is to try to have THE family meeting, once, to finally share a bunch of information that they have been keeping private for a long time. That is rarely the best course to pursue.

Rather, having regular meetings, on a repeating basis (annual, semi-annual, or other) is almost always a better idea. Those in attendance who are new to much of the content need time to absorb it, learn, and get up to speed before they can even conceive of the questions they’ll have.

The idea is to have a “forum”, or “an exchange of views” that brings out interaction and learning, which is better suited to a regular and repeating event, with an agenda that evolves over time.

 

  1. Past History and Future Outlook

Most family businesses considering holding this type of meeting have been around for a few decades.

So, sharing stories and facts about the history of the business, 10 and 20 and 30 years ago (or often much longer) can help give everyone in attendance a better appreciation of what came before, including major milestones, successes, and failures.

The trip through time should not necessarily end with today, though. Projecting another 10 or 20 years ahead, and getting various points of view on how family members see the business and their potential future involvement is also an opportunity that should not be missed.

 

  1. Process is More Important than Content

You may approach the idea of a family meeting as a chance to tell, teach, or share a number of important pieces of information with those members of the family who are less aware than others, in order to “level the playing field” and make everyone feel involved.

That is a noble idea, and at the same time, the temptation for too much content is always there. People who are thirsty for information are not always best served with a fire hose.

A habit of regular meetings, with the participation of many people, including interactivity, talking and listening, sharing of information to level of the information playing field, getting to know each other better, and of course having fun, are the ways to judge the success of family meetings.

The processes involved in all of this are what you need to get right, and the actual content is secondary.

When you get different people volunteering to serve on various committees to plan parts of the next meeting, you will know that you have launched a worthwhile venture that will stand the family in good stead for the long term.

Although you won’t likely get there quickly, slowly but surely it can be done. And you will all be glad you made the effort.

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Start cleaning up your M.E.S.S.

Procrastinating is a topic that gets lots of attention, because people blame their problems on an inability to get moving to get things done.

I get that it can be difficult to get things started, but instead of talking about procrastination, I prefer to think in terms of “inertia” and “momentum”.

Procrastination is more about “why”, whereas inertia and momentum are observable phenomena.

 

Physics Over Psychology

Maybe it’s because the “physics” side of things seems easier to grasp than the “psychology” of procrastination, which is about why we put things off.

Recently I was talking to a member of a family facing some complex inter-generation transition issues. It became clear that the enormity of what was in front of them was a significant stumbling block to mustering the courage to move forward.

It was while I was enumerating some of the ideas around ways to get started that I stumbled upon a mess.

Well, not a mess, but a M.E.S.S.

 

Start Moving 

The M in the mess is for Moving, as in “Start Moving”.

This is all about creating some action. Thinking and planning are great, but by themselves they are useless.

You need to introduce some action, even if you aren’t sure that you know the perfect first move. Sometimes you need to move backwards before going forward.

If you’ve ever had your car stuck in the snow, you know that rocking the car is the best way out, and that means back and forth, and once you’re unstuck, then you can figure out the best way to your destination.

 

Start Early

The E in the mess is for Early, as in “Start Early”.

I know that nobody has a rewind button, so we can’t actually start something yesterday, but if you could, that’s often what I would recommend. (see: There Is No “Rewind” Button)

Like any kind of planning that involves multiple generations in a family, getting an early start on things is usually a good idea.

How often do you hear about people who got into trouble and then said “if only we had started earlier”, compared to how seldom they lament starting too early?

 

Start Small

The first S in the mess is for Small, as in “Start Small”.

It often doesn’t take that big a move to undo the inertia that holds us back. We think in long term moves over months and years, but it is the small gestures that take only seconds or minutes that are the essence of those bigger moves.

If you want to run a marathon but have never even done a 5k, well maybe you need to be more realistic and start with an attainable goal.

If you haven’t had a productive conversation with your kids without it turning into a screaming match, then planning a weekend family retreat is probably not the step you should be aiming at.

 

Start Slowly

The second S in the mess is for Slowly, as in “Start Slowly”.

One of the problems with the “overcome procrastination” mindset is that once you get up the nerve to move, there is a tendency to want to go quickly.

That can backfire, because moving too quickly can result in injury, mistrust, and confusion.

When you decide to try to run 20k to train for that marathon right off the bat, you will probably get hurt. When you suddenly start talking about writing up a family constitution next weekend, after hardly allowing any family involvement in decisions, it will be met with skepticism and confusion.

 

Recognize that it’s YOUR Mess

If you continue to do nothing, you will have a mess to deal with and it will be YOUR mess. If you don’t accept responsibility for it, there won’t be much anyone else can do to help you.

 

Start cleaning up the M.E.S.S.

It’s your mess, so start cleaning it up. Get Moving, and do it as Early as possible. Start Small and Slowly. And keep going, so that you can gain momentum.

As you begin to move and clean it up, that movement and progress will attract others to join in and believe, and they will help you.

At the end of the day, getting the others involved in figuring things out is what you are really after, isn’t it?

 

Bottom Line: Start Moving, start Early, start Small, and start Slowly

 

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There Goes the Neighbourhood

This past week was a little out of the ordinary for me as I took a quick trip to my cottage to get away and clear my head. My intention was to rest and plan, but instead it turned out that I was pretty productive.

I’m not sure if that makes it a successful week then, but as someone pointed out to me, sometimes a change is as good as a rest.

Good Fences = Good Neighbours

One item on my agenda during my visit to the cottage was to deal with a part of our property on which there is a building that’s in need of a lot of work. After initially considering demolishing it or carting it away, we are looking at salvaging it instead.

A neighbour from two doors down asked if he could purchase it and fix it up to rent to his sister who’s moving to the area.

After discussing it with him, I went to see the local land surveyor who had drawn up the plans a few years ago.

Sidebar: As a fan of languages, I’ll point out that the French term for Land Surveyor is “Arpenteur Geomètre”. An “arpent” is an acre, so that makes the profession one of “Acreage Geometrist” as a rough translation.

Warring Neighbours

While making small talk with the man, he noted that he was being more selective in choosing the jobs he’s taking on at this stage of his career, sticking to the “easy ones”.

It turned out that the degree of difficulty he was referring to has zero to do with the complexity of the land, and everything to do with the people who own the land.

All this time I had imagined that the profession of land surveyor was all about surveying land (and acreage geometry), but as it turns out, most of the stress of the job comes from the people who own the land.

Working with drawings, driving stakes into the ground, using a transit (the scope instrument on a tripod), calculating the square footage, well, that’s the fun stuff. Standing between warring neighbours who are each arguing that the line should be “further over that way”, well, not so much.

Déjà Vu All Over Again

When my new friend related this aspect of the job, I had a bit of a flashback. A few years back when I first became a member of PPI (Purposeful Planning Institute), I joined one of their weekly thought leader calls.

I’m not 100% sure who the guest was that week, but I recall that they got their start advising families after being called in to mediate a number of sticky situations. I also recall the guest stating that he now tries to avoid those types of clients, preferring to work with good families, helping them become great.

Professional Stress

So if the land surveyor is stressed out by the fighting neighbours, and the family advisor is stressed out by family fighting, how bad must if be for the parties on the INSIDE?

What can be done to lower the level of conflict and to help everyone coexist? Neighbours are kind of “stuck” with each other, and families even more so. Their interdependence is pretty high.

Sounds like some good, clear rules and guidelines would be helpful. Once again, it comes back to governance. (See Governance Aaaah!)

Drawing the Boundaries

Right now I own the land that is being re-drawn, so it is the perfect time to figure out where the stakes will go into the ground to divide the property.

Things are calm, and I control both sides, so I can divide it as I wish, and will make it clear what I am offering to sell to my neighbour BEFORE we make the deal.

When you look at your family situation, and how things will shake out when the next generation will be in control, are all of the lines and boundaries clear and well understood?

Although we hope and would like to think that our kids will just get along, hope is not a strategy, and many families who ended up feuding used to think the same thing.

Bottom Line: Draw the lines in times of peace, don’t wait for the fighting to start, because then it is MUCH more difficult.

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Who Gets to Decide Who Gets to Decide?

The old “Hercules” animated TV show from my youth featured a centaur named Newt, who had the annoying habit of saying everything twice.

He even sang a song, “I’m glad, I’m glad, to have, to have, a friend, a friend, like Hercules, like Hercules”. The title of this post is NOT a homage to him.

It’s actually a question with two parts, which could be rephrased as “who gets to decide who the decision makers will be”. Saying it out loud with the proper inflection makes the point better than any way I could write it.

Last week in part 1 (Who Gets to Decide?), we talked about family systems and collective decision-making and how important leadership and alignment are to family governance.

Kicking it Up a Notch 

I promised a follow-up in which we looked at the question from a higher level. So here goes.

There are different levels of decisions that need to be made in any business. Even the lowest level employees have some decisions to make, and we need to train them and then hope that they make good decisions on day-to-day issues.

At higher levels, decisions like who to hire, or promote, come into play, and at even higher levels there are major purchases, and strategic business decisions that are made less frequently, but that have much more importance.

The Case in Family Businesses

As a family business grows and ages, different family members can become involved in business decisions, as their abilites and responsibilities grow.

But as long as we’re only looking at the decisions made in the business circle, this is all pretty mundane stuff.

Things get much more interesting in the ownership circle and in the family circle, and of course in the areas where they overlap.

Generational Groups

As a single founder gives way to a group of siblings, the dynamics change completely. When it gets to cousins and different branches, it gets even more hairy.

Day-to-Day operating decisions of the company are understandably usually left to those who manage the business. What about bigger questions?

Major Decisions

The stickiest decisions usually center around power and money, and when family members are working through these things, discussions can be heated.

Sometimes it helps to identify which group should be making the decision before going too far. If it is strictly an ownership issue, then the owners of the business or shared assets should be involved. If it is a family issue, then it’s the family.

Each group, or system, is comprised of certain people, and ideally each should have its own governance procedures and systems. Even when the two groups comprise exactly the same people, it’s important to consider this.

But governance doesn’t just fall from the sky.

Off the Shelf?

If you think you can just get your lawyer to draft something for you, well, good luck with that. The likelihood of it being adequate, fair, useable and acceptable to all is pretty low.

Governance systems need to be developed by the group of people they are going to serve in order to have the greatest chance of success.

The Business Circle

For the business, top management and or a board is usually sufficient, but even then, the more you get the people involved who are affected by the decisions, the more likely they will be followed.

The Ownership Circle

A shareholders agreement is a pretty standard name for the document that governs this circle, but the agreements themselves are never “standard”.

Getting everyone to hammer out a document that they all believe fairly represents their relationship is a huge task, but well worth the effort.

Ask any lawyer who drafts these how often they remain unsigned, though, and you will understand how difficult this can be.

The Family Circle

The long-term legacy of the business rests with the family more than the business. The family’s governance is unfortunately usually left for last.

Getting a bunch of people with the same last name together and having them figure this stuff out on their own will almost never happen.

Bringing in someone from the outside is the first step to making progress in this area. Do that and start early, small and slowly, and it can be done.

It takes one family member to drive this, along with an outside expert, and it can be done.

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