Posts

Honouring FamBiz System Exits

I was born into a family business system over five decades ago, and I’ve been working in and writing about the FamBiz space for over five years now.

The fact that a family is actually a “system” is one of the important realizations that I’ve come to, yet not necessarily one that I’ve shared much about here.

There have been some blogs relating to Bowen Family Systems Theory (A Systematic Business Family?) (My Beliefs on Family Legacy Advice) and I have shared with many people the fact that I’m beginning to work on my next book, which will be all about the intersection of BFST and the world of FamBiz.

But there have been a couple of events in the last little while that made me want to address the subject of “systems exits”, i.e. situations where someone who has been a part of a system is suddenly no longer around, and some of the consequences.

 

A Matriarch’s Retirement

The first situation draws on an annual meeting with a family business client of mine, where the matriarch of the family made the sudden announcement that she would be retiring from the business, effective immediately.

I took her at her word, and after she left the meeting, I mentioned to her children and nephews that they should begin to find a way to honour her service and announce this news to all the employees.

They looked at me with curious expressions, which I eventually realized were caused by the fact that few of them believed that she was serious.

Well, that was over three months ago, and she has been true to her word, and they have yet to do anything in line with what I had suggested.

 

Leaving a Door Open

My idea for announcing the retirement decision stemmed from my view that clarity is of utmost importance in any family business.

There are so many ambiguities that are inherent in systems where family and business overlap, that it behooves everyone to work extra hard to be clear on as many things as possible.

By not announcing the retirement of the matriarch, a proverbial door was being left open for her return, and that leaves the situation more open to confusion among the ranks of the employees.

 

Losing Man’s Best Friend

The second situation regarding a systems exit was not about the exit of a human, but it was about the loss of a member of the family.

The photo accompanying this post is the last one we have of Caedmon, our companion for the last nine years.

He had an interesting life during his time with us, and I’ve got enough stories about his adventures to last the rest of my life.

I wrote about one of them a few years ago (Sharing my Warmth Goes to the Dogs) and then that story was followed by another interesting turn of events that even got us on the news, first locally and then nationally. (Go Labs go! (Don’t worry) Carey Price gets his dogs back)

 

Honouring Those Who Have Left

You may think that this is a bit of a stretch (and I’d have a hard time arguing against you if you do) but I’m trying to honour this family member by writing about him here.

When we first got Caedmon, we jokingly referred to him as “Bosco’s dog”, because we got him to keep Bosco company after Rufus went to doggy heaven.

Bosco was the subject of a blog post in 2014 when he followed his “brother” Rufus to the pearly gates (R.I.P. my Old Friend)

 

Don’t Pretend They Weren’t There

I get some interesting looks from people sometimes when I refer to people who have died when we have family gatherings.

It’s so easy to not bring people’s names up because we don’t want anyone to feel bad about the absence of those who are no longer with us, but I like to buck that trend.

At funerals, we usually hear that we are there not to mourn, but to celebrate the life of the dearly departed.

That can be difficult when it is still so fresh and when the person was important to us. But after years have passed, I hate to act like the person never existed.

 

It Is Better to Have Loved and Lost…

When someone has exited the system, you can mourn them, honour them, grieve them, and celebrate them.

Just please don’t forget them, act like they were never there, or write them out of the story.

Evolving Gender Roles in Family Business

Sometimes family businesses don’t get enough credit for the societal leadership they so often exhibit.

The long-term view that they bring to the way they plan, strategize and operate, make them a special subset of businesses in general.

For example, many people instantly recognize that family business leaders are often great philanthropists, especially in their local areas.

 

Gender Balance

There’s another area that I’m starting to notice more and more where family businesses are taking an important leadership role, and that’s gender balance.

When looking at any such leadership role, you might think about the intent of any of these leaders, and imagine that there’s some concentrated effort on their part.

But family businesses don’t typically get together and decide that family businessess should do this or that.

They decide what’s best for their family, and once it turns out that many of them are doing the same thing, the leadeship trend emerges.

 

Wife, Daughter, Sister, Niece 

It seems to me that family businesses are leading the way in the area of gender balance in management and leadership roles.

My evidence is anecdotal, based on things that I read and come across on various forms of media.

But it also doesn’t surprise me either.

When it comes time to decide which person to promote to a key position, a high performing woman is less likely to be overlooked when she also happens to be the daughter, sister, cousin or niece of one of the leaders.

 

My Own Backyard 

Perhaps it’s because family businesses have always had a tendency to promote from within, that it’s more natural that any strong woman will be given more of a chance.

When I just think about my own daughter and nieces, as well as my wife and sisters, I know that they are at least as qualified as any man in their roles, and usually much more so.

 

Evolving Business Styles

It might also have something to do with the way that businesses are being run in less of an old-fashioned, authoritarian way.

The “macho male” attitude doesn’t seem to cut it like it used to, certainly not in the North American culture I’m most familiar with.

A softer touch, more inclusive leadership styles, and more democratic decision-making styles all seemingly play into the trend.

 

Family Roles

The traditional family roles of wife and mother versus husband and father have also changed a lot over the past few decades and generations.

The “stay-at-home parent” isn’t as much of a staple as it was when I was a kid and everyone went home from school for a nice lunch that Mom was busy making.

Those days are long gone.

Even in cases where one parent makes the conscious choice of taking a career break in order to take on child-raising full time, it isn’t always the mother.

And with couples having children at a later age, the eventual return to the work force can also be an easier fit for a mother who decides to go back to a family business.

 

Goodbye Primogeniture?

While it may be too early to say Goodbye to primogeniture, things are being done in family businesses today that were pretty inconceivable just a few decades ago.

It isn’t just the gender balance either; there are more and more sibling teams running things as more or less equals, with a trend to title sharing like naming a brother-sister team as “Co-Presidents”.

If any two people could pull that off properly, I’d bet on a sibling team anytime.

 

Soft Skills in a Family Business

I’m not sure this is a 100% true statement, but it seems to me that the “softer skills”, like getting along, democratic decision making, open communication, authenticity and teamwork are even more important in family businesses.

But just because these skills may be more “necessary” there, does that mean we will find them there?

I’m not sure I could make that case strongly; but what I can say is that a family business where the people have those skills, and have things structured for those skills to shine, will be the ones that thrive.

 

Generational Transitions

A family business will only remain one as long as the family can agree enough to hold onto it.

Having the kinds of people in charge to make this happen will require diverse groups going forward.

Bet on it, sister!

 

Note:

Between when I first drafted this blog and when I was wrapping it up, my friend and FFI colleague Carrie Hall published this piece which complements it nicely:

Please see:           Why family businesses have a higher percentage of women leaders

 

When Is Helping Not Helpful?

This subject has been kicking around in my head for a little while now, and I’m finally tackling it this week.

I’ve been seeing more and more things I could add, so I’m curious to see how this turns out. Let’s go.

 

It Feels Good to Help

Let’s start with the fact that most people feel good about themselves when they can help someone else.
Sometimes it’s completely altruistic, sometimes it’s more about being “one-up” on others.

It may stoke our superiority complex, or make us flash back to the parental approval we got for helping, when we were kids.

The point is, helping is something many of us do instinctively, it makes us feel good about ourselves, and that makes it a great win-win.

 

So What’s the Problem?

If you’re a parent, you’ve surely experienced situations where “over-helping” eventually had its downside.

If I continued to tie my kids’ shoes because that’s how I can help them, they’ll never learn to do it themselves.

 

Family Business Version

In a family business, the most prevalent version of this phenomenon comes up in the area of employment.

The owner’s child “can’t find a job”, so they’re hired, out of a desire to “help” them.

If you can’t see that this may turn out to be a future lifetime under-performing employee, then you probably aren’t paying enough attention.

 

Asking for Help

I’ve also written about the fact that family businesses are often reluctant to ask for help from outsiders.

(Blog version      and       Video version)

There certainly is no shortage of potential “helpers” out there, especially regarding issues that affect the business.

In fact, getting help with “business” issues versus “family” issues is still a far more common request.

 

Different Kinds of Help

For many situations, the requested help is pretty clear.

When you need advice with investments, taxes, or legal structures, there are specialists who deal in those things every day, who’ll happily provide you with a solution.

As to whether the help you think you need is actually what’s best for you, that’s another question.

There are plenty of solution providers who’ll “help” you by giving you what you ask for. It’s often done very efficiently, even if it turns out not to be very effective.

 

What About Help for the Family?

When you move over to the family issues, that’s where things get a bit trickier.

As someone who works this space, I can tell you that the requests are often formulated in the same way.

What I mean here is that “Tell us what we should do!” is a common way of asking for help.

There’s also no shortage of “helpers” out there, that’ll gladly step up and “help” by simply answering that question.

You may be wondering why I’m implying that there’s a problem here.

 

“For the Family, “By the Family”

Here’s why the “Help me!” request, followed by “OK, here’s the answer” method usually doesn’t do the trick.

I can tell you that when I get “Tell us what to do” it can be pretty difficult to not just simply spew forth my best advice, in the guise of helping.

That’s because I know that the best results for tricky family dynamics situations are always the ones that are co-developed by the family.

 

The “Process Versus Content” Dilemma

I’ve spent the better part of the past 5 years acquiring and honing the skills necessary to become a better “process” consultant, rather than simply being a “content” expert.

Having come to the family business space by “living it” my whole life, and continuing to study the “content” of “best practices”, it can get tricky.

But I also know that any help that I offer always works best when it is subtle and indirect, especially at first.

 

Who Are the Real Experts?

When dealing with questions of family dynamics, the real experts on “how the family operates” are the family members themselves, not the outside “expert”.

In fact, if I try to offer too many “helpful solutions” before I have a good feel for this particular family, they’re bound to backfire.

 

Who Does the Work?

Those asking for help often hope for a “short cut” solution, where the expert provides an easily implementable “quick fix”.

In truth, there are few magic fixes available, and in the end, it’s always the family members who’ll need to do the work, with the helper acting as a more of a “guide”.

And you’ll each tie your own shoes.

 

The Importance or Saying “NO” in a FamBiz

Family businesses sometimes get a bad rap because of the way they often do things less formally than a “more professional” company would.

The less formal nature of any business can be a plus in many ways, but of course it can turn into a negative too.

When they do turn negative, it’s usually because someone has agreed to something (i.e. said “Yes”) that they really should have said “No” to.

Today we’re going to look at some of those cases.

 

Summer Jobs

Quite often the children of the “boss” get their first real exposure to the business as teenagers with a summer job.

When a teen asks “Can I have a summer job?” the best answer is usually “Yes”.

The part where it can be hard to say No is if there are follow-up questions like, “Can I take Fridays off?” or “Can I take a couple of weeks off” or “Can I start a bit later than everyone else?”

If the job is to work with other regular employees who all follow certain rules, every time you make an exception for them, you’re setting a bad precedent, that not only affects your child, but also everyone else who sees the special treatment.

 

Full-Time Jobs

When you’re dealing with adult children, the idea of consistency and no special favours also often comes into play.

“Can I get a job at the company?” will often be answered with a Yes.

But, “Can I have the same pay as my sister for less work, because I have family obligations?” should probably be greeted with a No.

“Can I come in later, work from home most of the time, take Fridays off, etc.” are things that other employees see and if they become standard perks for family employees and no one else, these are huge morale killers.

 

The Other Side of the Coin

Lest you think that it’s only the next generation who ask for things to which the parents should be saying No, I’ve got a more drastic scenario for you.

This one also occurs far more often than it should, and it involves the parents taking advantage of their kids.

Picture the daughter and/or son, who have been diligently working for the family business for decades, not only following the rules that exist for all of the employees, but going above and beyond.

 

Some Day this Will All Be Yours

They work evenings and weekends, never take a vacation, and do everything that’s ever asked of them.

They ask the owners, their parents, for a raise or some time off, but they are rebuffed with something along the lines of “Some day this will all be yours”.

That can be an acceptable answer, for a while.

Five years later, when it comes up again, and the answer is still just as vague, that’s where the children need to be able to say NO.

 

When Exactly IS “Some Day”?

At some point, some clarity, especially around the “when”, is needed. But just because you want clarity, and even need clarity, that doesn’t mean that you automatically get clarity.

Sometimes you need to demand it. And that begins with a firm NO.

As I write this, I’m picturing the old sitcom plot where the mother is tired of being taken for granted and decides to go “on strike”, and finally the husband and kids realize how lucky they are to have Mom around taking care of so many things.

 

Respect the Interdependence 

As the years and decades go by and family members age and grow into new roles that fit their evolving life stages, the “power balance” shifts.

The people and the roles are very much interdependent all the way through, but the nature of that interdependence changes too.

It’s usually so gradual and incremental that you barely notice it, but it is happening. Sometimes you need to take the time to stop and notice and decide that the way things have been going doesn’t work anymore.

In this circumstance the “NO” is not necessarily the answer to a question, it’s more of a statement.

 

NO, I’m Not Settling for That Anymore

Many people get to the point where they feel this way. Not all of them have the courage to make the statement though.

I’m not saying that it’s easy, but at some point it needs to be said.

Informal Authority in Family Business

I like writing about aspects of family business that sometimes get overlooked “in real life”.

Some subjects that you can learn about in business school work OK in most places, but somehow, when looking at a family business, things aren’t that way at all.

 

The Standard Org Chart

Nowhere is this more apparent than with a document that you’ll find in just about any company, the good old organization chart.

There are usually lots of rectangles, connected together by lines, and often looking a bit like a pyramid.

Simple enough, “this person is in charge of this department”, “these people report to this person”, “those department heads in turn report to this VP”, you know what I’m talking about.

 

The FamBiz Org Chart

A family business, especially early on in its lifespan, may not even have an org chart.

When someone finally insists on creating one, the founder may not like it and may even ignore it.

Eventually, as the company grows, they’ll reluctantly agree that one is needed. But that doesn’t necessarily mean that they’ll respect it.

 

Respect My Authority!

The person at the top of the chart will often simply prefer to rely on the fact that they’re at the top and therefore, everyone else is below them and in turn reports to them.

While this is often factually correct, the reporting lines at the lower levels are there for a reason, and employees come to expect that those lines will be respected.

When the owner or founder walks into a department and sees something they don’t like, it’s pretty hard for them to bite their tongue and seek out the person below them on the org chart to relay a message.

In order to “save time” they’ll usually give instructions that the lowly employee feels they have no choice but to follow.

 

Giving Up Formal Authority

The good news is that while this type of scenario is rather commonplace, it is often harmless.

That is, as long as the person who’s giving the instructions is still truly the top person in the company.

When leaders step back, whether formally retiring or just cutting back to let others build their leadership, this can get a bit trickier.

The employees who are given instructions to do something will ususally feel beholden to the oldest person, and do as they say.

But what if what they’re being told goes against what their “real boss” (according to the org chart) has told them?

 

Formalize the Authority

One of the things I like to suggest to family business clients is to formalize the authority.

What does that look like? Glad you asked.

When a business leader steps back or steps out, it is essential that the employees know who is now in charge.

There are several ways to do this, and it may be best to use more than one:

 

          – Leadership Handover Ceremony

A formal ceremony in front of the employees, during which the outgoing leader is thanked and acknowledged.

 

          – Bulletin Board or Newsletter

A written message posted on a company bulletin board and sent to employees via a regular newsletter publication.

 

          – A Simple Email to Employees

If there is no newsletter, an email explaining the changes at the top, with appropriate thanks and best wishes.

 

Culture and Leadership from the Top

The new leader needs to be able to put their cultural stamp on things, and it’s next to impossible for them to do so unless and until the former leader has officially stepped aside.

“Officially” is a big word, though, so it’s important that both parties, the one leaving and the one coming in, be part of any such announcement.

The more people who witness it, the better. This is why I have a strong preference for the ceremony.

 

Group Decision, for the Good of the Group

For all employees to be able to buy into the new reality, it needs to appear to be a joint decision, and not any sort of “coup” or forced take-over.

The outgoing leader will hopefully see this as “closure” and resist the temptation to return to a leading role.

If a support role can be identified for the outgoing leader, to still retain some presence (at a much lower official level) that can also be good.

 

Clarity is Key

Few things in any organization are more important that clarity. Clear lines of authority are a must.

“Clunky Ownership Syndrome” in Family Business

Ownership usually doesn’t get much attention in the area of family business, and there are many reasons for that, and we’ll get to some.

Maybe I’m emphasizing it too much. I did a quick search of my website (www.ShiftYourFamilyBusiness.com) and found that I’ve already written 3 blogs with “ownership” in the title.

Everything is relative, though, and even with this fourth blog on the subject, that’s less than one blog a year about this “forgotten” circle. (see: Ownership: the Forgotten Circle of Family Business)

 

Status Quo That Lasts

The people who own a business have certain privileges that come with ownership, but with those, there are also responsibilities.

Most people who work for a family business know who the owners are, and they’re usually given certain deference.

The owners, in turn, try not to act like superior overlords, and this dance can continue for decades, as long as nothing changes.

 

Fast Moving World

While ownership remains fixed over time, the two other “circles”, family and business, are constantly in flux.

The business evolves, new products are launched, new locations opened, expansions bring in new employees, and new markets are developed.

Financial results are compiled monthly and quarterly.

The family also changes, as members find partners and have children, people get educated and find their passions, some join the business, and everyone grows older every year.

Oh, and some die.

Things are constantly evolving, and changes are part of life, and these days things seem to move more quickly than ever.

Yet ownership usually stays fixed, and rarely even gets a second thought.

 

Clunky by Definition

I chose the word “clunky” to describe the situation because it felt like the right word, and I’ve used it to explain this to people in the past.

Searching shutterstock.com to find an appropriate image for this post, I almost had second thoughts, as the photo choices for “clunky” were mostly 1980’s cellphones.

(I went “outside the box” a bit with my choice of hippos; not sure it worked (?)).

Then I Googled “clunky definition” and I was immediately sold on the fact that clunky was the right word.

Here’s what came back:

clunky: awkwardly solid, heavy, and outdated.

 

So What? 

I’m not suggesting that ownership should necessarily change more frequently than it does; that would be stretching it.

What I am saying is that the definition above includes a couple of words that many family businesses should be thinking about much more than they typically do.

There are only four key words in that definition, so you can probably locate the two that are ringing alarms bells in my head.

 

Awkward!

“Awkwardly solid” almost sounds like a backhanded compliment. Solid is usually positive, but when it’s awkwardly so, well, maybe not so much.

Family business relationships are often already awkward, simply because family and business overlaps cause complex situations.

Now throw in ownership overlaps, compounded by the fact that things are stuck in the past, and things get even clumsier.

 

Outdated

“Outdated” is probably the simplest word to describe the issues that I’ve seen regarding the ownership of family businesses.

It’s not hard to understand why things change so infrequently, but that doesn’t mean that everyone should just be cool with it.

Rising generation family members crave some clarity about their futures, but they often continue to put up with vague replies when they broach the subject.

“Don’t worry, some day this will all be yours”

 

When Exactly is “Some Day”?

Once again I feel the need to explain my views on this, lest readers get the impression that I think ownership changes absolutely need to happen more regularly and quickly.

I’m advocating for some thoughtful discussion and planning, and hopefully some transparency.

 

Transition Planning

As the business evolves and family members age, transition plans are contemplated to make sure that people will be prepared to assume their future business management roles.

Don’t forget that there needs to be an ownership transition too.

 

Two-for-One

Do you really think it makes sense to think about those things as completely separate discussions? I don’t.

And if you ask those being groomed for future management roles, I bet they’d agree too.

Look 15 years into the future. People will be that much older, and the business will have grown.

If nothing changes, your current ownership structure will be pretty clunky.

Start planning those changes now too.

5 Things that Can De-Rail a Family Business

It’s been a few months since my last “5 Things” blog, so this might be overdue.

While I usually deal in positives because it’s my nature, this week we’re going to look at some potential pitfalls that many family businesses face.

Let’s get started.

 

  1. Assumptions

The word “assumptions” that I chose here might surprise some, but I wanted a word that stood on its own, without requiring a negating adjective.

So while I could have said “Poor Communications”, I chose instead to look at what IS there, as opposed to what is NOT.

The reason many families don’t think that they need to talk is because they actually assume that everyone else in the family knows what they are thinking, AND that everyone is in agreement.

That often turns out to be wishful thinking at best, and hides serious misunderstandings at its worst.

 

  1. Bad Timing

Another issue that can de-rail things is that family members from different generations will often have different views regarding timing.

I call it “bad timing” but it’s really about poor alignment of timing, different priorities around timing, and just plain waiting too long to get started on things that are important.

The rising generation needs to step into roles with a long runway so that they can learn while the elders are still there.

More often than not, the elders hang on way too long, telling themselves that the “kids aren’t ready yet”.

That usually has much more to do with their own sense of importance than anything else.

 

  1. “Us-against-the–World” Attitude

Business families are notorious for keeping things very close to the vest and having great difficulty trusting any outsiders.

They often think that they’re the only ones in the world who have family issues to contend with as they run their businesses.

They wrongly believe that everyone else is “out to get them” and have trouble trusting anyone who happens to have a different last name.

This can be harmful in terms of attracting good employees, qualified advisors, and of course eventually outside independent directors for their board.

 

  1. Jealousy and Superiority Complexes

You had to know that I’d eventually get to something in the area of sibling relationships, and here I’ve chosen to label it as jealousy.

When there’s a lack of harmony in sibling relationships, quite often it can be traced to some jealousy issues.

And even when one sibling isn’t really jealous, sparks can come from what I like to call someone’s “superiority complex”.

I’m not sure if that’s even a real term, but I like to use it as the opposite of the more familiar “inferiority complex”.

When a sibling occupies a leadership position in the business vis-à-vis their siblings, it brings about some potential difficulties, like jealousy, for example.

A humble sibling leader will face less issues with this, than one who boasts about his relative place with his generational peers.

 

  1. Stagnation

Family businesses can become stodgy and complacent with time and not quick enough to innovate. Lack of foresight and getting out in front of industry changes can become a problem.

This often accompanies the bad timing noted above, where the younger family members know that things need to change, but aren’t able to convince the current leaders that changes are needed to be profitable in the future.

 

Wait, Where’s “Conflict”?

Just guessing here, but I assume that some readers may be surprised that “Conflict” did not make my list.

It certainly isn’t because conflict doesn’t exist in business families, nor because I don’t think conflict needs to be addressed.

Of course conflict is an issue, and it exists in almost every family business. But, in and of itself, conflict won’t de-rail a family business.

Unresolvable conflict, due to an unwillingness to work on resolving it, can certainly be a huge risk.

Likewise, unexpressed conflict that lays beneath the surface for years or decades has certainly sunk more than one family business.

 

Manage the Conflicts, Look Out for the Other Five

Conflict can be healthy (see: Embracing Conflict in Family Business), so I suggest concentrating on the other five areas.

No. 3, only trusting insiders, can be the biggest one.

Regular, honest, open communication is the best antidote to all of these.

Recognizing everyone’s interdependence is probably the “magic bullet”, if there is one.

 

What keeps you up at night?

Shifting FamBiz Time Horizons

Family businesses are known for looking at things from a much longer time perspective than larger, publicly traded companies.

They aren’t concerned with how their decisions will affect their next quarterly earnings release, and instead focus on how things will look in a quarter century.

 

How Fixed Is a Time Horizon?

The long-term view can stay the same for decades, but sometimes events occur that make changes desirable over a much shorter timeframe.

One of my continuing roles in managing our family office is handling the asset allocation to various professional outside investment managers.

We recently decided to divest one position and I was surprised to learn that there would be an early withdrawal penalty for not having held it for the 5-year minimum.

Hmmm, I wondered, why had I not noticed that back then (it’s been over four years)? Simple, at the time it did not seem like it could ever be an issue.

Things change…

 

Time Flies

In another sphere of my life, a couple of years ago I was in Boston with the family, and we went to the Harvard bookstore to look at their swag.

I curiously asked my kids if they’d ever thought of attending that school.

I’ve since done campus tours at most of the Ivy League schools, plus a bunch more, with both of them, and yet in a few months that important chapter of my life will also be behind me.

How could my focus change so quickly? It feels like just yesterday we were looking at daycares.

 

Teens, Seniors and the Sandwich

Maybe it’s just that I’m part of the sandwich generation, with two teens and an octagenarian mother who depend on me.

During those life stages, a few short years can change many aspects of one’s life.

But every family has people at various ages and life stages, and that’s part of why business families are so complex.

 

Family Life Cycle

If you read some of the books around family wealth and making it last over generations, you’ll surely come across authors who talk about “100 years” as a timeframe to consider.

I have to admit, when I first saw this a few years ago, I thought it would be difficult for most people to grasp.

Heck, I was working in this space, and I was having trouble wrapping my mind around it.

I’m pretty sure I “get it” now, but I’m not sure if it’s because I’ve become used to hearing it, because I’m a few years older myself, or because I’ve “matured” into a different life view.

 

Legacy Families 

If you want to learn from families who’ve been successful in transitioning wealth from one generation to the next, and done so more than just once, well, you almost have no choice but to look at those who have lasted a century or more.

At the recent Institute for Family Governance conference, one speaker mentioned that a 20-year investment time horizon for a family might be considered “short term”, and I agree.

But if I want to look at things that way, first I need to almost be able to remove myself from the equation.

I now realize that maybe the investment we were divesting shouldn’t ever have been made because it did not fit such a long time horizon.

 

My 100-Year View

Or maybe for my family, a 100-year horizon isn’t appropriate, because our family never quite reached the wealth level necessary to become a “legacy family”

Maybe another lesson here is that it’s easier to help some other family deal with these questions than it can ever be to look at this for your own family.

It’s really difficult to look at these kinds of multi-generational issues when you and your life are part of the equation.

It’s much easier for me to draw out your expected lifespan and matter-of-factly talk about how things will look decades later. Doing that for me, um, not so much.

 

Not Fun? Doesn’t Mean You Don’t Need to Do It!

Realizing that things are complex and potentially not fun does not absolve you of the responsibility to actually take care of important things, though.

Thinking about the importance of this is the first step to getting started. Now go and find someone who can keep you on track.

Then together you can take the steps needed for a true 100-year plan.

Avoiding the “60% Problem”

A few weeks ago one of my “tweeps” (Twitter peeps) shared a news article about family business that quoted an interesting statistic.

The field of family business as a specific “unit” of study still being relatively new, there aren’t necessarily lots of stats to choose from when someone sits down to write such an article.

It seems like the same studies, usually decades old, have their stats recycled and re-used over and over again. But that’s a problem for another day.

Sixty Percent of FamBiz Failures

Here is a quote about the main stat from the story:

 

“Sixty percent of the failures were due to breakdowns in

trust and communication within the family unit”

 

I’d like to address the 60%, but first I need to fill in some of the context. The sentence before the one quoted above read: “A comprehensive study identified reasons why family businesses don’t last.”

If we wanted to add to the list of things that “don’t last”, we could add businesses in general, and of course, people, because we will all eventually die.

Okay, now that I dealt with my pet peeve on how family business stats are thrown around by some writers, let’s get to the good stuff.

 

Breakdowns in What?

Let’s look at the “problems” with family business that were mentioned as being the most prevalent, i.e. 60%.

“Breakdowns in trust and communications” is how it was worded, and I take that to mean “breakdowns in trust” and “breakdowns in communications”.

Of course one could make the argument that “trust and communications” are so intertwined that they are actually inseparable in this context, and I would not argue against that either.

The fact that they were “lumped together” in the first place sort of makes that point already. But just for this exercise, let’s begin by looking at them separately.

 

Breakdowns in Trust

In order for there to be a “breakdown” in trust, there needs to have been some trust to begin with.

Here is the presumed scenario: 1. There was trust; 2. It broke down; and 3. Eventually the family business was no more.

Presumably, if the trust had remained strong and not broken down, the business would still be around.

It would be really interesting to look at the details around the trust breakdowns, because I have some theories I’d like to check out if we could see the actual data.

I’d be willing to bet that the trust level between individual pairs of people did not change very much over time, because in my experience it usually stays pretty constant.

However, changes, over time, in the make-up of the overall group running the business, can certainly result in a trust level that gets worse.

 

Breakdowns in Communications

Communications breakdowns are often easier to see than trust issues. That’s because when the issue is trust, that fact tends to be kept mum.

When we picture communication problems, we may be inclined to think about screaming matches and altercations that people in the office can see and hear.

I’ve known some family businesses that are no strangers to these types of scenes.

But I think that the kinds of communications breakdowns that are at the root of family business failures are more often the silent type.

Sometimes the screaming doesn’t happen anymore, because nobody is even talking to anyone else anymore.

 

Reasons and Opportunities to Talk

The good news is that trust and communications issues don’t usually just show up one day. They are usually gradual. Why is that good news? Good question.

To me, if a situation is slowly degrading, there is an opportunity to address it and try to rectify it. Of course there does need to be a willingness to actually work on it.

Family members who are involved in owning and/or managing a business together have plenty of reasons why they need to be in regular communication with each other.

Sometimes they don’t create enough opportunities to talk.

 

Regular Meetings

My best advice for families that are worried about these “trust and communications breakdowns” is to schedule regular meetings to talk about working ON their business.

Usually at least once per quarter, key family members need to come together and air things out, so that things don’t get worse.

If you need a “referee”, find one. But please do it.

 

Link: Family Business: When business is personal – Smart Business Magazine

Guest blog from Kim Harland – Thanks Kim!

Lessons Learned from Women in Family Business

Family businesses account for 50%–80% of all jobs in a majority of countries worldwide.[1] And it seems women are leading the way, doing far better in leadership and management positions in family businesses than those in the non-family business sector. For example, 80% of family-owned businesses have at least one female director whereas only 17.7% of companies in the FTSE 100 have female directors.[2]

To celebrate the key role women play in family businesses, we spoke to a number of leading ladies and asked them to share their advice on range of topics plus give you a few tips on how to apply them to your family business.

 

What makes family business successful?

Across the board, all the women we spoke to felt three important principles underpin family business success – communication, a clear family vision and trust.

According to Lea Boyce, a key advisor at Boyce Family Office (5th generation family business), family businesses also have a crucial competitive advantage over the corporate sector – their nimbleness.

“While non-family businesses are busy having layers of meetings, a family in business has made the decision, got family buy in, done the deal and moved onto the next opportunity. As a result, they are able to be more entrepreneurial,” she says.

Another factor vital to family business success is the induction process for the next generation of family owners. On this topic, Priyanka Gupta Zielinski (author and executive director at MPIL Steel Structures Ltd, a 2nd generation family business), has some important advice.

“As you bring your daughter or son into the business, remember that you are unsettling an existing framework – things will change and you have to be willing to let them. It is important to let your children make their own mistakes. Sometimes their screw-ups will be of enormous magnitude – but remember, at least the worst is happening while you’ve got their back,” she says. “Whenever possible, help your children calculate and mitigate the risk without taking away their sense of ownership of the project.”

 

Your family business check-up

  1. Do you have a formal structure to allow open and honest communication as a family group?
  2. Has your family group articulated and documented shared business and family goals?
  3. Are you harnessing the opportunities presented by your next generation?

What’s the biggest challenge for women in family business?
Many of the women we spoke to believe the greatest challenge they face in business is the struggle to be taken seriously.

Lea says when it comes to families, patriarchy remains the dominant world view so when clients encounter a matriarch running the business they find it very confronting and challenging.

Priyanka feels that even in 2017, there is still a lack of role models for women in business. But she has an interesting idea for change.

“What is needed is a community of feminist men in family businesses who help women along the way by challenging the opinions of other men,” she says.

 

Your family business check-up

  1. Look for role models within your own or other family businesses.
  2. Consider a mentor – it is always helpful to work with others who have been there before you.
  3. Keep in mind that many women in family businesses can draw great inspiration from the men in their lives – their fathers, brothers and husbands.


The benefit of hindsight.

Everyone loves a bit of hindsight and when asked what advice they would give to their 25- year-old selves, our interviewees provided some excellent food for thought.

Looking back, Sara Pantaleo – CEO of 2nd generation family business La Porchetta – has this counsel for young women.

“Fight for what you believe. Gender doesn’t matter so just go for it. Don’t be mediocre. Strive to achieve. I sometimes see amazing, intelligent young women just accept things and I think that’s quite sad.”

Finally, Corrina, a 6th generation member of the Oliver winemaking family, suggests reflecting on one’s partner to see how they can help – rather than hinder – your family business.

“Recognise the key role your husband plays in enabling you to succeed in business and life – with support, not competition or jealousy, and contributing his share to the family.”

 

Your family business check-up

  1. What can you learn from the elders in your family? Ask your older family members the same question we did – “What advice would you give to a 25-year-old version of yourself?’ You might be pleasantly surprised at the answers and what they can do for your business.

We hope you’ve enjoyed these Insights from a few prominent women in family businesses. We have recently published our “Women in Family Business E-book”. If you’d like to learn a bit more about what we do, head over to our website.

[1] Global Data Points, Family Firm Institute, http://www.ffi.org/?page=globaldatapoints, accessed 18/10/17

[2] Imperial College Business School, Leeds University Business School and Durham University Business School, http://www3.imperial.ac.uk/newsandeventspggrp/imperialcollege/newssummary/news_22-5-2013-12-0-36 , Accessed 4/10/17