So What Makes You A Leader

"If your actions inspire others to dream more, learn more, do more and become more, you are a leader." 
--John Quincy Adams

Kouzes and Posner in their classic “The Leadership Challenge”, see leaders as pioneers… “Leaders are pioneers. They are people who venture into unexplored territory. They guide us to new and often unfamiliar destinations. People who take the lead are the foot soldiers in the campaigns for change… The unique reason for having leaders – their differentiating function – is to move us forward. Leaders get us going someplace.”

How are we as leaders in our families and businesses inspiring others?

Are we truly moving our business and family forward into new territory?

Let me know what is holding you back.

Your actions speak so loud I cannot hear a word you are saying

Our children, family, employees, customers, vendors, neighbors, (and the list could on and on) are not necessarily awestruck by what we say, BUT they are struck by what we do and how we act.

How aligned are our actions with our rhetoric?

Some time ago, I was talking with a Family Business owner whose business was struggling to survive. He stated he was also struggling to find, hire, and retain “good help”. In the course of our discussion he stated employees who had a strong work ethic, were honest, and willing to put in “full day” just did not exist anymore. As our discussion continued he continued to talk of his struggles and related a story of how a customer tried to take advantage of him. This particular customer told this businessman they did not receive certain product they had paid for. This Family Business leader stated he knew the product was delivered as he personally had delivered the product. So rather than discuss the issue with the customer he advised his delivery staff to “pad” the bill each time they delivered product to that particular customer.

I then proceeded to ask him what he would do if he caught one of his employees, or children, “padding” their Timecard because they felt they were not being paid appropriately?

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

Are we showing / modeling respect?

Are we showing / modeling honesty?

Are we showing / modeling credibility?

Are we showing / modeling commitment?

Are we showing / modeling our stated core values?

Are your actions speaking so loud people cannot hear a word our saying?

What examples can you provide?

Passing the Baton of Leadership in the Family Business

For those who enjoy Track and Field, you understand the discipline and hard work that is required to effectively compete. Track and Field is both an individual and team sport. For those athletes involved in Relay competition, they are required to develop their personal skills and abilities, but also spend many long hours practicing the hand-off of the baton. Many races are lost due to the hand-off. What lessons can we learn from Track and Field that apply to the Business Family?

In a recently released survey of Family Businesses, it was estimated that within the next 5 years over 25% of Family Businesses would transition to new ownership and new leadership and the majority believed the business will remain within the family.

When one considers the sheer number and volume of businesses that is describing, I believe it begs the question: How are we working in and with Business Families, nurturing the next generation to accept the baton of both ownership and leadership?

A disheartening finding of this survey indicated that only 50% of the Family Businesses had a Succession Plan. This sobering thought provides much opportunity and work for all Business Families. The Transition of both Ownership and Leadership is the hand-off.

One way to develop the next “leg of the family business” is to understand the knowledge, skills, and abilities the next generation will need to continue the race and help them gain the appropriate training. This training may be both formal and informal. A key aspect of this in any event, is for the senior family members to lead by example, respect the next generation to allow them to hone their skills on the job, help the next generation build their credibility with all stakeholders of the family business, and show the next generation they have the confidence of the seniors.

What are examples, that you would be willing to share, of how your family is preparing the next generation to take the ‘hand-off’ of the baton for the Family Business?

Leaders in Family Businesses Should Give It Away

"Leadership must be based on goodwill. Goodwill does not mean posturing and, least of all, pandering to the mob. It means obvious and wholehearted commitment to helping followers. We are tired of leaders we fear, tired of leaders we love, and tired of leaders who let us take liberties with them. What we need for leaders are men of the heart who are so helpful that they, in effect, do away with the need of their jobs. But leaders like that are never out of a job, never out of followers. Strange as it sounds, great leaders gain authority by giving it away."

— Admiral James B. Stockdale

How is your family developing the next generation of leaders?

Be Prepared

How would your family and business survive with the sudden loss of a key family member or executive?

In a recent survey by the American Management Association Corporate Learning Solutions only 14% stated they were ‘well prepared’ to handle such a crisis. This is an extremely low percentage of businesses that believe they are prepared.

How prepared is your Family Business for a sudden loss requiring the transition of ownership of the business and transition of management of the business?

The Transition of Ownership and the Transition of Management are not necessarily the same and should have two different plans.

Let me know your thoughts, or give me a call.

It Really is All About Family

As a very proud grandfather,

I would like to introduce the world to my new granddaughter –

Heidi Eva Moyer who arrived safely Sunday morning - May 22, 2011 - at 1153 weighing in at 9lbs 9oz and measuring 22 inches long. She is perfect!

She joins my son, daughter in-law, and her big sister, Lydia.

What a joy and blessing Family is.

What to do - Best and Worst Practices in Family Businesses

In a recent on-line seminar Frederick D. Lipman, Esq. discussed the Best and Worst Practices in Family Businesses. Fred is an internationally known authority on business law, has authored 12 books with his most recent being The Family Business Guide. He has lectured internationally and nationally including at the University of Pennsylvania Law School and is with Blank Rome LLP Counselors at Law.

Fred began his discussion by describing what he believes are four Success Factors for the successful transition of the Family Business.

1. The Economic opportunity the business provides the family.

2. A business with a stable product.

3. Clearly defined and explicitly written Dispute Resolution policies.

4. The positive mentoring of successive generations.

Fred reiterated, throughout his presentation, that he believes Divorce is the major risk in every family business and therefore requires the proper agreements and policies, in writing and signed. It is the responsibility of the founder of the business, or the senior generation, to put in place legal mechanisms to resolve disputes and not allow the business to be jeopardized.

A few of the topics that Fred provided the Best and Worst Practices included; Mentoring the Next Generation; Succession Planning; Shareholder / Owners Agreements; Pre-Nuptial Agreements; Selling the Family Business; and Taking the Family Business Public to name just a few.

This virtual seminar provided many golden nuggets of information, do’s and don’ts for the Family in Business that truly desires to build the business legacy for the family.

There are four key items that families need to begin working on immediately:

1. Examine your family’s position and/or policies for these critical issues and determine what your family wants and needs as they establish the transgenerational legacy.

2. Communicate, Communicate, Communicate clearly and appropriately with the family what is going on, be transparent in the goals and put the protection in writing.

3. Then sign and execute to documents, agreements, and policies to protect the business and family.

4. This process requires a team of experts; a Family Business Consultant, a Family Business Attorney, and a Family Business Accountant.

If you would like to discuss these critical issues in greater detail, please contact me, I would be happy to talk with you.

The Family Business Check-Up

As we looked at in a post earlier this year, Physicians encourage us to have annual check-ups. This is critical in order to understand, prevent and address potential health risks.

Family owned Businesses, of any age or generation, also need to take routine assessment of the health of their business, family, and individuals in the business. To get a clear true understanding, the assessment should consider, separately and in combination, all the factors that enhance the health of the Business Family. Critical areas that should be evaluated can include: Leadership; Values; Change; Goal Orientation; Empowerment; Communications; Team Work; Interpersonal Relationships; Familiness; Customer Focus; and Individual Recognition.

The best way to find out what is actually going on in the family and business is to ask those in the family and in the business. Last time we considered Familiness; this time the check-up considers the area of Values.

A recognition and adoption of the values, guidelines, and way of behaving that a Family has declared by which family members behave, make decisions and take actions. When there is strong commitment and agreement to those values family members and employees are able to focus on the family needs and the business needs and mission.

Each Family Member should address the following statements:

1. Our family has written Values that motivate, guide, and impact our family’s actions and behaviors.

2. Our Family Values are sometimes compromised to attain the business goals.

3. Our Family traditions often interfere with clear thinking and effective decision-making.

4. One of our Family’s strengths lies in the strong commitment of doing the right thing because it is the right thing.

5. As a Family we ‘audit’ ourselves to determine if we are living and practicing our family and business values.

How would your family, employees, and customers, clients, or vendors, answer these questions about the Values of your family and your family business?

We will continue to explore critical areas for the annual check-up of Family Owned Business in later posts.

What are your thoughts regarding the annual check-up?

Best and Worst Practices in Family Businesses

The Network of Family Businesses has scheduled an on-line educational seminar with Frederick D. Lipman on The Best and Worst Practices in Family Businesses. The seminar scheduled for Tuesday, May 17^th at 11:00 AM EST.

In a White Paper found at www.netfamilybusiness.com Fred begins to explore best and worst practices for Mentoring in a Family Business, Succession Planning in the Family Business, a Shareholder Agreement for the Ownership as well as numerous additional critical items for Business Families building their family legacy.

Fred is an internationally known authority on business law and has authored 12 books, including his most recent, The Family Business Guide. He has appeared on CNN, CNBC, Bloomberg, and Chinese television and has been quoted in the Wall Street Journal, USA Today, Forbes, and other publications. He was a lecturer in the MBA program at the Wharton School of Business for five years and at the University of Pennsylvania Law School for ten years. He has lectured in China, Thailand, and India. A graduate of Harvard Law School, he has more than 40 years of experience in corporate governance (including special committee and controlling shareholder representation), trust law, mergers and acquisitions, insurance, private equity, and IPOs.

We at The Network of Family Business are excited to have Fred presenting.

Registration for the On-Line Educational Seminar is available at:

www.netfamilybusiness.com

A Balancing Act

I stopped and listened to an interesting segment on one of the morning news shows recently. The discussion centered on a survey that found Moms now feel guilty when their work intruded on their “family time.” Moms felt guilty when “technology” (i.e. blackberry, e-mail, phone calls, etc.) was disturbing their personal time with their family. They also struggled when the boss asked them to stay late or work weekends. They admitted it was hard to say “no” to work. Some even resorted to turning off all “technology” for several hours in the evening so that they would not have to make a choice between answering the demands of work and spending time with family.

Isn’t this a fact of life for family business owners? We are “on call” 24/7. It’s just a way of life. Our responsibilities don’t end at 5 and begin again the next morning. It’s our responsibility to make sure ovens are running, the deliveries are getting made, the customers are satisfied and our employees are taken care of. The joy for a family business owner is that it is a “family” business. Parents, children, grandchildren are all welcome parts of the business. Responsibilities and joys are all shared. When Dad or Mom needs to attend to the business, the kids are often invited along. It becomes an informal teaching session for the children – teaching them the in’s and out’s of the business, along with a sense of responsibility.

While we all look for balance in our lives, Family Business Owners have the unique opportunity to incorporate work and personal life – hopefully to the advantage of both.

Guest Blogger:

Kathy Moyer

A Board of Directors for the Family Business: Getting the Most Out of Your Board

In a recent on-line seminar Jennifer Pendergast discussed the advantages for a Family Business in having an active independent Board of Directors. A senior associate of The Family Business Consulting Group, Inc.®, Jennifer Pendergast specializes in strategic planning, family and business governance, family office structure, and facilitation.

Jennifer went into great detail defining the contribution a Board can make to both the Family and the Business. She began by reviewing research that showed the vast majority of family businesses still do not have independent Directors on their boards, and many never use the board they have in any sort of oversight or governance capacity. Not having a Board may be considered as somewhat shortsighted. Jennifer stated, “First, it is likely that over time not all owners will be involved in the management of the business, creating some possible tension between “inside” and “outside” owners that independent board directors could help alleviate. Second, while the overlap of management and ownership may reduce the need for oversight, the additional overlap of family relationships in a business context increases the emotional complexity of certain key decisions (from compensation to succession planning) that would be beneficially impacted by the presence of trusted independent board members.”

Three Key Take Away Points made by Jennifer:

1. Developing a BOD is process that will evolve over time and will meet the needs of the family and the business. It is critical that family members and the Ownership agree on the Governance structure. Dialogue and discussion are important to determine what “high” level input can be helpful and will be accepted.

2. Define the Roles and Responsibilities and Expectations of BOD. Both Family and outside professionals.

3. Be diligent in the search for Board members. Interview to make sure they meet the criteria you need. And that the individuals you are considering really care about you, really care about your family, and really care about your family business.

This seminar can be viewed in the archives of The Network of Family Businesses at www.netfamilybusiness.com

Why does our Family Business Exist?

I recently asked a family member working in their Family Business, “Why does your Family Business exist?”

The response was a long period of silence, followed by, “I never really thought about it, it was always just here.”

If you were to stand at the door of your business and ask every individual (both family and non-family) that goes in and out of your business, how will they answer that question?

Why is this question and understanding so important?

As a Family in Business – Why does your family business exist?

Let me know

A Board of Directors for the Family Business: Getting the Most Out of Your Board

The Network of Family Businesses has scheduled an on-line educational seminar with Jennifer Pendergast on the advantages of a family business to develop a Board of Directors. The seminar scheduled for Tuesday, April 12^th at 11:00 AM EST is titled: The Valuable Role of the Board in Family Business.

In a White Paper found at www.netfamilybusiness.com Jennifer explains that to get the most out of a BOD the family / ownership must establish meaningful roles, clear expectations of the Board member, carefully structured meetings, and evaluations of the Board member. Pendergast states, “Putting together a board that is actively involved in the oversight of a company is a significant investment. If you make the investment that allows a board to play a meaningful role in your company, you will definitely reap the rewards.”

A senior associate of The Family Business Consulting Group, Inc.®, Jennifer Pendergast specializes in strategic planning, family and business governance, family office structure, and facilitation. Jennifer is an experienced management consultant with an extensive background in the many strategic challenges faced by family firms serving a broad range of clients, ranging from startup to Fortune 500 companies, in both for-profit and non-profit arenas. With a Ph.D. in strategy, Pendergast has taught Emory University's Goizueta Business School, Georgia Tech and The Wharton Business School. Her teaching experience spans undergraduate, MBA and executive level programs. Pendergast's presentations, consultations and publications concentrate on strategic planning and business growth, developing and managing family meetings, family councils and ownership groups, structuring and improving the effectiveness of boards of directors and creating and managing family offices.

Registration for the On-Line Educational Seminar is available at www.netfamilybusiness.com

Private Equity Can Provide Business Families Options, Liquidity, and Transition

Families in Business have more options than many realize when they desire to grow, expand, or transition the family business and still maintain control and the family culture. As Aaron Aiken recently explained during an on-line seminar with The Network of Family Businesses, Private Equity firms can provide a business family with additional options.

Aaron Aiken is a Senior Associate in the San Francisco office of Hanover Partners, Inc. Hanover Partners is a Private Equity Investment company that partners with privately held and family owned businesses. One of their goals is to support, develop, and grow companies over the long term in partnership with management.

Several key points Aaron highlighted regarding what a Business Family should consider included:

1. A family in business needs to discuss their needs, goals, and objectives as a family and as a business. There are more options than many families in business may realize – there is more flexibility than selling or going public. And the family does not necessarily need to disrupt the family, non-family employees and culture of the family and business.

2. Private Equity firms have different strategies and cultures – take time to talk other families that have worked with that particular Private Equity firm – Do Your Homework – find a Private Equity firm that takes a "stewardship view" of your family business and values your family’s culture.

3. Be realistic about the valuation of your business. Know what your emotional attachment to the business really is - may not need to ‘auction’ to get the full value – don’t be too low in your valuation with a Private Equity firm – there are options for the transition and estate planning

As Aaron explained, “In some situations the owner of the company may not be willing to or financially able to take the financial risk alone. By working with a Private Equity investor, the owner can take some “chips off the table”, monetize a portion of the value of the company and then share the risk and reward of future growth with experienced investor partners”.

This seminar can be viewed in the archives of The Network of Family Businesses at www.netfamilybusiness.com

DWYSYWD to DWWSWWD

Frequently I will go back to my personal library and review or reread books that challenged my way of thinking or that made an impact in my life.

One of those books I revisited recently is Credibility by Jim Kouzes and Barry Posner. For me this book reinforces how personal leadership is and that at the end of the day, all leaders really have is their own integrity, honesty, principles and credibility.

One of the keys for me in building Credibility is putting my words into action.

The authors reframe the DWYSYWD or Do What You Say You Will Do

To:

DWWSWWD or Do What We Say We Will Do

The ‘we’ is critical for me as an individual to build my credibility but also for me to lead my family and business.

Credibility – It will take time for me to earn it, I can lose it in an instant.

Hold me accountable to walk the talk.

How am I doing?

How are we doing?

DUKING’ IT OUT

In the country side of Germany there is a castle dating back to medieval times. This castle, while not particularly interesting in structure, has a very unique history. The uniqueness of this castle is that the same family has retained title to the castle for several hundred years.

Credit for this feat was given to the fact that the family married intelligently, made good business decisions, and due to the fact that the family for centuries believed in working out their difficulties. The place to work out their problems was in one particular room in the castle. Adorning the wall on one side of the room was a rendition of a court jester and on the other side was a beautiful carved rose. There was great significance in these two symbols for anyone gathered in that room to “duke it out” or “work out” problems or issues.

In days of old, Court Jesters were permitted to say anything to the king without repercussion. While others in the court always held their tongues in front of the king, never wanting to confront or upset, the Court Jester was generally free to speak whatever he thought or felt.

A Rose is a symbol of “silence.” It reminded everyone that the conversations held in that room were private and not to leave the room.

By displaying these two symbols, the owners of the castle were subtly reminding everyone that they were free to speak their minds when meeting in this room to discuss the pertinent issues of the day, without repercussion, but the rose reminded them that whatever was said in that room, stayed in that room.

How would we function in a meeting with family members or the boss or the board if we knew we could speak our mind, as the court jester was allowed to do, but know that what said in that room would not leave that room.

Freedom to speak our mind (best done with grace and love) and respect to keep the discussion private.

A good motto for us as we work out issues in our families and our family business.

Family Business and Private Equity – Liquidity and Transition

In his White Paper with The Network of Family Businesses Aaron defines Private Equity and how a Business Family may utilize a Private Equity firm. Aaron stated, “While publicly traded companies are subject to federal securities laws and regulations as well as to daily scrutiny by financial analysts and the business media, companies owned by Private Equity buyout firms operate virtually free of quarter-to-quarter public accountability. This provides buyout firms with investment advantages such as flexibility, patience, and a long-term view that generally publicly traded companies do not enjoy.” Aiken also answers ‘Frequently Asked Questions’ about Private Equity in this White Paper.

The Network of Family Businesses has scheduled an on-line educational seminar with Aaron Aiken to discuss “Family Business and Private Equity – Liquidity and Transition” for Wednesday, March 16th at 11:00 AM EST.

Aaron Aiken is a Senior Associate in the San Francisco office of Hanover Partners, Inc. Hanover Partners is a Private Equity Investment company. They are experienced partners with privately held and family owned businesses. One of their goals is to support, develop, and grow companies over the long term in partnership with management.

Registration for the On-Line Educational Seminar, “Family Business and Private Equity – Liquidity and Transition”, is available at www.netfamilybusiness.com

What defines success in a Family Business

As in Art,

beauty is in the eye of the beholder.

So too is the definition of success.

In a business family, the measuring stick or metrics of success must be determined and considered by all in the family business in order to understand underlying motivations and decision-making. Studies have shown increased satisfaction in attaining the results of the metrics will increase morale, commitment, and overall satisfaction in the business.

In the business family, goals and objectives of the business and goals and objectives of the family are often difficult to distinguish. The level of expectation and the attainment of those goals contribute to feeling of success and satisfaction and commitment by the family to the family and to the business.

The question I believe this raises, is what are the goals and objectives of your family business?

Is the goal to just pay the bills and employ everyone in the family?

Is the goal to have net profits exceed industry standards?

Is the goal to harvest the business and cash out?

Is the goal to pass the business to the next generation?

Research has shown the family’s satisfaction with their business performance is directly connected to the survival of the family business.

Have all in your family identified and connected with the goals and objectives of your family and your family’s business?

Have all in your family internalized the vision, mission, and values of your family?

How would you encourage other business families?

“Fun With A Purpose”

“Fun With A Purpose”

Issues Will Always Exist in a Family Business: Tackling Them Is the Real Trick

A Fourth Generation Family Business Looks Back and Ahead

“Fun With A Purpose” is a resonant theme we heard from George Brown on a recent on-line educational seminar with The Network of Family Businesses. “Fun With a Purpose” for the children they serve and “Fun With a Purpose” as a Business Family.

George is Manager of Asset Services with Highlights magazine and Highlights consumer products. A fourth-generation member of the family, he has worked for Highlights for Children, Inc. in a variety of roles over the past ten years including sales, planning, editorial, product development, and content management.

As George relayed the history of the Myers Family and the significance of Shared Values, Shared Experiences, Shared Places, and Communication, everything the family does mirrors the business motto of “Fun with a Purpose”. The family reunions, family council meetings, and educational programs for the next generation not only occur at the family homestead but are designed to nurture the transition of family values with very purposeful events. These events range from formal type education to an annual family square dance, to service projects for all family members to participate in.

As I have experienced the Myers family, they take nurturing and passing the family’s Mission, Vision, and Values very intentionally and very seriously, but approach it as “Fun With A Purpose”.

George provided valuable insight and left us with three points all business families can work on:

1. Each family will have their own set of values – It is important to understand what the values for your family are.

a. What they mean

b. How they translate into action for the family and the business

2. Work to intentionally build shared experiences, create shared places, and build shared values with all family members to keep building the family’s legacy

3. Keep the communication and dialogue;

a. Open

b. Honest

c. Frequent

Especially between the Generations

George stated: “As the issues come and go in our family, we use the tools we have developed over four generations to help us. Each time we tackle an issue, we strengthen our belief that these tools serve us well.”

George, thanks for giving us a glimpse into your family, your business and how you are building your family legacy as you move into the 5^th generation, and having fun while you do it.

A Fourth Generation Family Business Looks Back and Ahead

Issues Will Always Exist in a Family Business: Tackling Them Is the Real Trick

The Network of Family Businesses has scheduled an on-line educational seminar with George Brown, a fourth-generation family member and employee of Highlights for Children, Inc. The on-line seminar is scheduled for Tuesday, February 15^th at 11:00 AM EST.

In a White Paper found at www.netfamilybusiness.com, George Brown outlines the issues and opportunities the Myers’ Family, Highlights for Children, are tackling in the journey to build and maintain their legacy. Their family has a goal of long-term stewardship of the family and the business, and to pass it along to future generations. Brown states issues and opportunities will come and go; as a family it is important to use the tools developed over four generations to guide them. The values of the founders, passed from generation-to-generation have become a shared set of values for the family.

George Brown is Manager of Asset Services involved in the archiving and repurposing of 65 years worth of content from Highlights magazine, and Highlights consumer products. He focuses on supporting business functions such as International partnerships, domestic licensing, permissions to re-use content, and rights management. A fourth-generation member of the family, he has worked for Highlights for Children, Inc. in a variety of roles over the past ten years including sales, planning, editorial, product development, and content management.

Highlights for Children is committed to the same values that guided the Myerses' work. Their belief that children experience fun and joy when they use their innate creativity, curiosity, thinking ability, and imagination and their commitment to the motto "Fun with a Purpose" can still be found on every page of Highlights magazine and in an expanding family of products, from Highlights High Five, aimed at children ages 2 through 6, to the games, puzzles, and crafts in book clubs such as Puzzlemania, Puzzle Buzz, and Which Way USA?

Registration for the On-Line Educational Seminar is available at www.netfamilybusiness.com