Preserving Know-How

If key Family Leaders walk out the door, what tacit knowledge and wisdom leaves with them?

This is of concern for the legacy of the family and the business and in many instances those remaining sit idly by and mourn the loss of all the wisdom. In many situations senior Family leaders are not consciously aware of what they do that has made, and makes them successful. The remaining individuals in the business must frequently and intentionally draw out the knowledge and wisdom. Sometimes this can be accomplished by nurturing informal discussions and at other times by creating intentional dialogue. The best way to help the senior family member pass on their wisdom is by getting them to tell a story.

The next generation needs to ask:

Tell me about the time….

Tell me how you started in the business…

What was the most difficult obstacle you faced when…

Give me an example of …

What was your experience with…

What were the times when…

Each of these leading statements, and there are many more, are designed to allow for additional probing and searching to understand the values, culture, philosophy, thought-process, wisdom and knowledge. If at all possible, as many family members as possible should sit in on the intentional dialogue. Comparing notes following the exercise will also help build oneness of the family. You may even want to video / record the time for future generations.

Don’t wait for a crisis, start today, and enjoy getting to know the senior generation of the Business Family in a whole new way as the wisdom and knowledge is gleaned.

What is your story?

In a family business how do we know what other family members really want?

Why not ask.

In many situations we ‘assume’ we know what the other person is thinking, or we project our own personal attributions or desires on the other person. Having spoken on several occasions with the founder of a family business, ‘Dad’ was beginning to think about retiring.

His first concern was what he will “retire to” and what he will do in retirement? Bottom line, he had not really given it thought before, and now he knew he wanted to retire, but was fearful in not knowing how he would spend his time. He was insightful enough to know we needed to figure something out or he would continually interfere with his daughter running the business.

Hence, the second issue. ‘Dad’ had made the assumption that his son and eldest child had no interest in the business since after growing up with the business and working in the business for several years he had left the business a number of years back and had built his own management career with a public corporation.

In discussing the familial relationships, ‘Dad’ kept saying his son had no interest in the business and that only his daughter was capable of running the business. After finally persuading him to talk with his son, he was astounded to learn that his son had an intense desire to return to the family business and on top of that he also stated his sister had the knowledge, skills, and experience to be President / CEO.

Why wasn’t the conversation started long ago?

Now we need to work out the new partnership agreement, the buy/sell agreement, and the exit strategies of the next generation. This too will require asking the questions and a willingness discuss the difficult issues.

I would love to hear your stories about learning the right information by asking the right questions.

Let me know at steve@netfamilybusiness.com

A FAMILY BUSINESS MUST BE AWARE OF THE HUMAN RESOURCES ISSUES

"Even With Family, It Has To Be All Business"

Jacqueline Shulman, Partner - Labor Relations & Employment Law Department of Obermayer Rebmann Maxwell & Hippel LLP stated in the September 13^th on-line educational seminar with The Network of Family Businesses that Family Businesses are not exempt from Labor and Employment laws. Jackie defined the need to understand what being an At-Will employer means and continued by outling the alphabet list of laws and policies that Families must educate each of their supervisors as well as each family member. She stated that by not following the law and / or not having appropriate policies in place, individual family members may not be protected by the corporate veil and may be held personally liable for failure to comply.

Jackie concluded her seminar by reminding the Membership of these important points every Family Business must remember:

There is No special dispensation for Family Businesses.

It is easy to file a Discrimination Claim!

You can be sued Personally!

It is Your job to Act Professionally (set the tone for your staff)!

Unions like Family Businesses too!

If it “feels good” – it may be best not to act until you check with HR or your labor attorney.

In a Check-List For Every Family Member, Shulman provided questions that each Family member must ask his or herself:

Would I want my actions reported on Action News or in the newspaper?

Would I act the same way in front of my spouse, partner, child or parent?

Would I want to talk about my actions at the dinner table?

Would I want my children to hear about my conduct?

Would I want someone to act this way towards my spouse/partner/child?

Am I treating others as I would want to be treated?

Would I describe my conduct as “ACTING IN A PROFESSIONAL MANNER”?

More information on Shulman’s comments and seminar is available by registering at www.netfamilybusiness.com

Can the next generation in the Family Business say we did it?

Many founders of businesses who have the intent of passing the business to their children find it difficult to develop a plan and a process for the development of the next generation and the subsequent transition of the business to the next generation.

The founder’s heart is generally in the right place in their desire for the next generation to take over the business, make the right decisions, and accept the responsibility. Statements and comments frequently made by the senior generation may include why don’t they tell me what they want to do; what do they want; why won’t they just step up and take responsibility, or what do they expect of us?

In subsequent conversations with the next generation, they state, why doesn’t Dad / Mom just tell us what they want, which one of us will be president, when will they retire, or what will they do when they retire?

What was intriguing in those conversations was the fact that in most cases the next generation was often not given opportunities to learn how to make critical long-term strategic decisions and did not have / or participate in family council meetings to learn how to analyze both family and business issues. In some situations the next generation did not have the opportunity to learn how to operate the business.

It is critical for the senior generation to consciously and specifically help the next generation grow. The next generation needs to gain the expertise, experience, mentoring, tacit knowledge, passion, and internal drive to continue building the family legacy. The next generation needs to hear praise, encouragement, appropriate guidance and the confidence of the senior generation. When the proper plans, processes, and guidance is in place by the senior leadership, the next generation can continue building the legacy.

"A leader is best when people barely know he exists, not so good when people obey and acclaim him, worst when they despise him. But of a good leader, who talks little, when his work is done, his aim fulfilled, they will say, 'We did this ourselves.'"

— Lao-Tse

What have you / are you doing to prepare the next generation?

What will the next generation say?

In many situations the help of an outside facilitator can help guide the process.

If you would like to discuss this in more detail, please contact me.

HUMAN RESOURCES ISSUES IN A FAMILY BUSINESS - "Even With Family, It Has To Be All Business"

Jacqueline Shulman, Partner - Labor Relations & Employment Law Department of Obermayer Rebmann Maxwell & Hippel LLP states in a White Paper posted with The Network of Family Businesses that many family business owners believe their "close-knit" approach provides them with protections not enjoyed by the typical private employer. This wrongly held belief can be costly on two fronts. Aside from poor morale, it could lead to legal fees being expended for failure to comply with specific laws (especially discrimination lawsuits).

Shulman’s White Paper considers three significant issue Family Businesses need to understand: “At-Will doesn’t always mean what is says”; Unions don’t just go after big companies; and Families in Business must know their ABCs which includes state and federal employment laws and the host of other laws titled as an alphabet soup.

The White Paper can be found at www.netfamilybusiness.com and an On-Line Educational Seminar on these issues and more is scheduled with Shulman for September 13th at 11:00 AM EST. The On-Line Seminar is being sponsored and hosted by The Network of Family.