Tuesday, July 28, 2020

It Is Not Always About Best Practices

There is a common phrase; ‘when you have seen one family business, you have seen one family business’. This is an important concept to remember when your family is evaluating ‘best practices’.

Best practices are not all bad, and many individuals are quick to espouse best practices for your family business. A best practice is a method or technique that has been generally accepted as better than alternatives.

These best practices are thought to produce superior results or have simply become an acceptable way of doing things. Some families are looking for pre-made templates to standardize family business processes. Sometimes a best practice is not applicable or is inappropriate for a particular business family’s needs. A key strategic ability required when applying best practice to organizations is the ability to balance the unique familiness, qualities, values, strategies, and goals of a business family that it has in common with other family businesses. 

Determining best practices to address a problem or situation is a commonly used but little understood tool of analysis because the concept is vague. Vagueness stems from the term ‘best’ which is subjective. While some evidence must go into determining a practice the ‘best’, it is more helpful to simply determine if a practice has worked exceptionally well and why. Instead of being the best, it may simply be a smart practice. This approach allows for a mix and match of smart practices. 

The primary mechanism in a good practice is the ability or the means of achieving a goal in an efficient manner. When adopting good practices, it is important to identify the core essence of the practice while allowing flexibility for how it is implemented so it remains sensitive to the needs of the family. Robust good practices are adaptable to various conditions, have many operational features, and can employ similar but diverse ways to achieve their goals.

In addition to the reasons why a smart practice might succeed, advisors and family business leaders should describe potential vulnerabilities that could lead a good practice to fail. Leaders and advisors of the business family must develop safeguards in order to minimize the risk of vulnerabilities. Risks to implementing the selected good practices in the applied context as well as what support structures can be put in place need to be anticipated in order to maximize the likelihood of success. These conditions include increased enthusiasm, advantageous family involvement and economic conditions, and less bureaucratic resistance.

Learn to know the good practices other business families are using and judiciously, with guidance, use what will best fit your family and your family business. It’s not about the best practices for someone else’s business; it’s about developing the best solutions for your business family.


Tuesday, June 30, 2020

Family Business Values Really Do Drive The Family And Business Culture

A “value” is a principle, standard, or quality considered intrinsically worthwhile or desirable. The root of value is valoir, which means “to be of worth.” Values are deep and emotional, difficult to change and often unconscious. Every family has values. They may be spoken or unspoken. Some families live out their values more closely than others, but each family has a set of values. 

Though the world is ever-changing, a family’s core values should be constant.  It is these core values that influence attitudes and drive behavior. It is who you are as a business family. 

As leaders in our families and in our businesses, are we modeling the behaviors that match our values?

            Are we showing and modeling respect?
            Are we showing and modeling honesty?
            Are we showing and modeling credibility?
            Are we showing and modeling commitment?

To check in on how your business family is doing, here are some discussion questions for your family, perhaps for your next Family Council meeting:

·      What are our family values?
·      How will our family values carry our business through the tough times?
·      How do the stakeholders in our business see our family extend grace, love, and forgiveness to others?
·      How are we ensuring the future generations will commit to our family values?
·      How do we as a family hold each other accountable and responsible to live out our family values?
·      Do we believe difficult decisions can be made expeditiously because our values are clear?
·      Are our values clear so that our priorities are clear?

Sometimes people mistakenly think of values as a list of “shoulds” and “should nots” guiding what they can or cannot do.  To the contrary, values are energizing, motivating, and inspiring. When people care passionately about something—in other words, when they value it—they can spur themselves to great achievements. Values are conscious motivators!

“It’s important that people should know what you stand for. It’s equally important that they know what you won’t stand for.”
                                                Mary H. Waldrip, Author

Contact us to learn how we can assist your family in codifying you values.


Monday, June 15, 2020

What Does It Mean For A Family Business To innovate

In challenging times, it is imperative to the survival of businesses to have ambition, grit, and the internal force of innovation and creativity. All employees, family and non-family, must build on the family’s values, culture, vision, entrepreneurial drive and innovation. Fostering this internal force requires a management and leadership model that empowers all in the business to internalize an “owner’s” mindset.

Being innovative and creative is a conscious choice to challenge the status quo.  Creative people are value investors in the world of ideas.  Value is generated by evaluating a creative idea, calculating the risk-reward, and driving forward.

By defining specific characteristics of innovation as:
     Being an advantage over current use.
     Compatible with the family’s value and beliefs.
     Not overly complex so that it can be implemented.
     Provides an ability to ‘test drive’, yet still revert if it does not prove    
     Visible enough to be seen by others.

How can a family business foster innovation and creativity to keep new ideas flowing?

1.     Set the culture.  Establish a culture that promotes authenticity, commitment to people, commitment to the business, and continuous effort.
2.     Nurture a nudge.  A nudge is an action that attracts people’s attention and urges then to alter their behavior in a positive way, yet it is not done in a heavy-handed way. This nudge may be as simple as urging the sharing of an idea or as complex as developing and implementing a change process.
3.     Teach the family and employees the business.  Focus not only on the technical skills each individual needs to perform, but educate people regarding how the business makes money, how the business attracts and retains clients or customers, and other big-picture issues that impact the business.
4.     Keep the momentum going.  Building the internal force of innovative and creative family leaders and employees, and the culture to keep it going, takes hard work.  To keep the momentum going, ensure that the organization focuses on competitive compensation, keeping morale up, and consistent, effective communication.

By tapping into the internal force of innovative and creative family leaders and employees, a family business can out-think and out-perform the competition, increase profits, and move successfully into the future.


Tuesday, June 9, 2020

Invest In The Next Team

As the economy begins to re-open following the COVID-19 shutdown, many professional sports leagues are still trying to figure out what they will do. During the course of the pandemic, some professional baseball teams decided to stop paying their minor league players. At a fundamental level, decisions like this communicate a withdrawal from investing in the future.

Family owned enterprises cannot afford to stop investing in developing their bench for the next leadership team. Building the bench for a family business, which may include both family and non-family members, brings unique challenges and complexities.  

For a business family that desires to build a legacy and grow profitably well into the future, the following principles will help:

1.  Develop a Family Employment Policy that encourages family members who desire a leadership role to gain work experience outside of the family business and specifically defines the objective criteria necessary for employment and leadership.
2.  Nurture mentoring and coaching between the current CEO and the next generation of leaders. 
3.  Clearly define, in writing, the job description for the leadership team roles.  Identify the expectations and metrics to which each position will be held accountable.  This should also include the knowledge, skills, and abilities expected in each role, as well as a commitment to the family’s values and objectives. Have the senior generation guide the process of selecting their successors before they leave. 
4.  Seek the support of non-biased, third party perspectives in evaluating and selecting the next CEO and leadership team.  This may mean soliciting input from non-family directors, members of the advisory board, or qualified advisors.
5.  Be open to a non-family CEO for a season if a family member is not ready to assume leadership.
6.  Set the leadership team and the next CEO up for success.  Develop a communication structure and a governance system that efficiently and effectively outlines the processes for the family, the ownership, and the business to keep focused on the correct goals and objectives.
7.  Revisit these guidelines annually.

As a family, commit to a process that will build the best bench and develop the most qualified leadership team for the future of your family business. 


Wednesday, May 20, 2020

Will this plan unite or divide the family

What’s the Plan?

Will this plan unite or divide the family when Mom and Dad are gone?

A recent survey by the National Bureau of Economic Research’s Family Business Alliance found that only 15% of family enterprises had anything in place that resembled a succession plan. What’s a family to do?  

How does a family business owner avoid reaching the golden years, having worked as hard as he or she did, with no plan for transition?  It starts with the three basic questions: where are we now, where are we going, and how do we get there.  

As owners, families need to chart out their plan for success and be willing to adapt as they go. The competitive advantages of a family business are many. The family culture is one distinct advantage, and a well-functioning family is grounded in trust. This includes trust between the generations, between family branches, and with non-family employees. Survival of an organization, and more specifically a family business, is dependent on this trust. 

First, the family needs a vision. What will success look like for the business?  What does success look like for the family?  Are family members willing to let go and let new people innovate to keep maximizing the use of the family’s resources? Part of this includes talking about who you are. Your identity and core values are bigger than the business and bigger than its success or failure.

Second, the family needs to work through how each family member wants to be involved (or not) in accomplishing that vision. Is anyone in the family interested in the business? Are the interested family members qualified for the roles they want? What other strengths do family members bring to the table to help maximize and manage the family’s resources?  

Finally, as you go out and pursue that vision, remember to be flexible. Part of what makes a business successful is executing a plan but staying flexible to adapt as you go. Be comfortable, as a family, operating at the nexus of the strategic strategy and the emerging strategy.

Success may be different for each family member. Define what success looks like for the entire family and begin charting a path to get there. Develop a plan, communicate the plan, and keep asking:

Will this plan unite or divide the family when Mom and Dad are gone?

Wednesday, May 13, 2020

Effective Planning For Succession

Moving an enterprise forward requires the right people, doing the right things, in the right place, at the right time. Like strategic thinking and planning, succession planning starts with where the family’s and staff’s abilities are now, considers where they need to be, and determines how the enterprise will help them get there.

Effective succession planning is a process that can make or break the future of an organization. A survey by The National Bureau of Economic Research found over 40% of Family Businesses have not adopted a Succession Plan. In a separate study of family-owned enterprises, it was found 78% have no transition team and 83% have no written transition plan. 

Implementing a transition team of key internal members and non-family advisors will have the ability to determine the Knowledge, Skills, and Abilities needed for the future. As we experience the continuance of today’s volatile business and social environments it is critical now, more than ever, to determine the model for the future leadership of the business. 

Succession planning cannot be limited to the rising generation of family members. It is essential to create a deep bench of leaders throughout the enterprise that support the family ownership, understand and endorse the family mission and values, and have the interpersonal skills to lead

There are a number of factors to consider in effectively planning for succession:

1.     Roles and Responsibilities.  Accurately determine what roles and responsibilities are essential for the organization, difficult to replace, and will need to be transitioned in 5 – 10 years.

2.     Knowledge, Skills, and Abilities.  Define the knowledge, skills, and abilities needed in those positions both now and in the future.

3.     Current Talent Pool. Examine the current talent pool of individuals in the family and the business to understand potential options for future leadership. 

4.     Development.  To be effective, development plans require thoughtful planning, diligence, and follow-through.

5.     Preparation.  Help the future leaders earn the respect of the family, the business, and outside stakeholders.

Grooming the next leader in advance can help ensure the transition will be smooth, effective, and successful. By beginning this process now, it allows for the ability to identify and address critical business needs for the business moving forward. The early beginning of building a process and system can also ensure proactive continuity of senior leadership and it may minimize a potential of post-succession executive turnover. 


Thursday, May 7, 2020

After The Lockdown

Preparation can give a competitive advantage.

As we begin planning an exit from this lockdown, there needs to be a plan created without panic. As a family business leader, being either extremely optimistic or extremely pessimistic may put us at risk. There will be opportunity for those that develop a good foundation, have a good foundation, or are building a strong foundation for the business. Strong systems and processes with clearly articulated values and principles will help guide your team through these rough waters.

In a survey by Statistics Canada, private companies with Advisory Boards, particularly ones with non-family members, produced significantly better results after instituting the Advisory Board than before. The study found sales growth increased three-fold in the three years following the introduction of the advisory board compared to the three years prior to instituting the advisory board, and productivity rose an average of 5.9% compared with 3.2% in the previous three-year period.

One tool to help guide the family business after the lockdown can be their Board or Advisory Board, or Advisors. Outside Advisors are a powerful tool to help business families build their legacies, grow ROI, increase innovation, form new networks, and develop key strategic initiatives. 

During times of uncertainty, expertise, support, and unbiased in-put when you’re facing big decisions becomes a necessity. Outside Advisors will provide counsel, advice, knowledge, skills, and abilities that typically go beyond the organization’s management team. Advisory Boards are an informal brain trust to help think through the investments, innovation, staffing needs, and plans. Non-family advisors must challenge the family’s assumptions, which often remain unquestioned in times of crisis. This can prevent decisions from being made as a result of the herd mentality. The non-family advisors can also provide the ‘safe space’ for the leaders to share their doubts, concerns, anger, anxiety, and insecurities.

An Advisory Board should always provide value to the family, the organization, and the leader of the family enterprises. Advisory Board members, who serve at the pleasure of the organization’s leadership, are selected for their experience, insight, wisdom, ability to ask the right questions, and ability to be a focused sounding board for the CEO. As a Family Business leader, this is essential to recover from a downturn.

Too often, growing, privately held companies get stuck and don’t take advantage of the invaluable resource Outside Advisors can be. An Advisory Board tailored to your business will help you lead for the future and build a healthy business.

Preparation will give a competitive advantage.


Monday, April 27, 2020

Time To Plan

“For everything there is a season, and a time for every matter under heaven…”
                        Ecclesiastes 3:1

Family businesses are straddling rebuilding a successful business today while planning for a future that will require different skills. This is where strategic thinking and planning is essential. Virtual and digital disruption are at the heart of each family, family business, and privately held enterprise.

What makes planning in uncertain times so difficult for so many business families runs the gamut: the fear of the unknown; the business may be forced to close; cash flow is reduced or nonexistent; the business is struggling and leadership fears the ability to get it back on track; indecision in choosing or creating a plan; psychological and emotional connections that paralyze the family, leaders, and employees. 

The family needs a vision. What will success look like for the business on the other side of this crisis?  What does success look like for the family?  Your identity and core values are bigger than the business and bigger than its success or failure. Second, the family needs to work through how each family member, leader, or employee wants to or will be involved (or not) in accomplishing the plan. Are family members and employees qualified for the new roles that will be required?  What strengths do family members bring to the table to help maximize and manage the family’s and the business resources?  Finally, as you go out and execute the recovery plan, remember to be flexible.  Part of what will make the business successful is executing a plan but staying flexible to adapt as you go. Define what a successful plan looks like and begin charting a path to get there.

So how does the family business leadership turn values like loyalty, hard work, and vision into a plan for success? We see several strategic moves ahead to consider in building a plan for overcoming issues:

1.     Write down / codify your values and purpose into the plan. Draft a written plan of recovery, along with a timeline for execution. This is where your family business has a competitive edge, take it to the next step.
2.     Ensure family, leadership, and employees are deeply involved. They have a lot to offer the business grappling with rebuilding from the disruption. 
3.     Determine the skill sets needed for the future. Raising the ‘Digital IQ’ of the business is closely entwined with raising digital capabilities of existing workforce and determining future skill sets.  
4.     Implement a feedback mechanism. It is important to monitor the progress toward plan and adapt with proper intervention as needed.
5.     Form a team of professional advisors.  By bringing in independent advisors and board members with external expertise the leadership will also gain unbiased monitoring of the plan. 

It’s not too late to get started planning.  Doing nothing is not really an option.


Tuesday, April 21, 2020

It Is Inevitable – Conflict In The Family

There is no such thing as a family business without conflict at some point. What is the cause of conflict in a family business?

Though there is not one answer to that question for every situation or family business, we believe, based on our experience, the source of much conflict is misaligned expectations.

Each family member brings his or her own thoughts, ideas, experiences, definitions, interpretations, and perceptions. In many situations, there is an assumption that others just know what we mean, and we move forward acting on our own definitions or interpretations. These families take the greatest hits when change is necessary, or a critical decision must be made.

Because every family is going to have conflict, what is a family to do?

-       Who you talk to is as important as what you say. Avoid Triangulation.

-       As a family and as a business, consciously work on developing a culture of conflict resolution. Individually focus on developing conflict resolution skills.

-       Work on the correct issue. Refrain from piling on with incorrect data or with issues from the past.

-       Handle the right problem with the right person. 

-       Establish appropriate boundaries. Establish a balance between work life and family life.

-       Be an example with your own communication. Practice good communication. Be quick to listen and slow to speak. 

-       Seek help. As a member of the family enterprise, find a coach to support you and your family in developing healthy communication habits and breaking the communication triangulation and cycle of conflict.


Only by addressing conflict directly will the cycle end. Families and their enterprises cannot thrive where communication habits undermine trust and credibility.  Conflict is inevitable, but how you handle it is not.  


Friday, April 17, 2020

Now More Than Ever

In a business family, boundaries, though often mental structures or commitments, are as real as tangible fences. Boundaries establish one thing in relationship to another. They are a line between where one ends and the other begins. Boundaries draw lines regarding what is acceptable and what is unacceptable within the family and the enterprise.  Boundaries help family members balance personal and professional obligations; maintain family bonds; and develop emotionally and psychologically throughout their lives. 

In this era of social distancing, boundaries are being defined as six feet. This is important for us to maintain the physical health of our families, our staff, our customers, clients, and society. This distancing while critical, can also lead to a feeling of isolation, loneliness, and depression. It is critical for leaders of the family and leaders of the business to recognize the needs of each individual.

For each leader, it is important to pay attention to what is appropriate, inhibit what is not relative and destructive, and be conscious of what everyone needs to know or do. In these times, is critical for the leader to be creative and attentive to helping family members, employees and staff connect.

Maintaining the family-ness that comes from nurturing shared identity can also be one of a family business’s strongest competitive advantages.  In other words, connecting and sharing stories not only brings understanding and identity to family and family business, it is also one of the best ways to nurturing one of your strongest competitive advantages.

There are many ways to work at staying connected. Phone calls. Emails. Text messages. Conference calls. Zoom Meetings. Video conferences. Skype. We need to be in constant communication to help everyone feel connected. Now more than ever, over communicate.

As a leader, create the environment, experiences, and opportunities where your family and business can attend to each other, innovate for the business, create new ways of doing things, and look to the future.

Monday, April 6, 2020

We Are In A Crisis What Does It Take To Lead A Family Business

 Leading a successful family business through unprecedented times requires a clear understanding of positive family relationships and a clear understanding of business relationships (known as employees, management, vendors, and customers).

During these uncertain times, positive family relationships do not occur by accident or by just thinking positive thoughts. Some debate whether positive relationships are the result of focusing on ‘quality’ vs. ‘quantity’ of time spent. We all now have a quantity of time. To keep positive relationships requires intentionality. How do you do that?

  1. Commit to the focus needed to guide the family and business. It is easy to become distracted or distraught.
  2. Keep the balance between your individual needs, the family needs and the business needs. You need to do self-care so you can care for the family and the business.
  3. Commit to enjoy activities together as a family.
  4. Maintain the balance between personal and interpersonal privacy.
  5. Remember, you won’t have all the answers.
  6. Use this time to learn as a family how to have the difficult conversations and still love each other.
  7. Communicate, communicate, communicate. Be open, be honest, be truthful with your family, your employees, and your business. If you are not able to be face-to-face, use the phone, Skype, Zoom, SMS.
  8. Commit to providing grace, love, and support.
  9. Leadership can be lonely. Utilize the support networks you have, your family council, your Advisory Board, your Board of Directors, your management team, your friends, and your advisors.
  10. Eat well, sleep well, exercise, lean in on your faith.

It is in these times family business leaders are called upon to provide strong leadership with a sense of hope. Cast the vision.