Joshua Nacht Joins The Family Business Consulting Group

Joshua Nacht
Joshua Nacht

FBCG is pleased to welcome Joshua Nacht, Ph.D. as the newest consultant to our 25-member team. He brings a complimentary mix of skills, attributes and experience to his new role.

“I was inspired to become a family-business consultant after working with John Ward as both a client and student,” says Joshua. “I have a diverse set of life experiences and skills that allow me to integrate various perspectives and capabilities to work with business-families. I have been looking at FBCG for years, and the opportunity to join this elite (but not elitist) group is a tremendous honor.”

Joshua works with families to help promote dialogue and idea advancement by integrating diverse perspectives. He utilizes a systems-based approach to work with the complexity and opportunity present in family businesses. Joshua facilitates effective group process, and works to leverage polarities as a way to maximize organizational functioning.

He has spoken at numerous family-enterprise conferences on a range of issues including having multiple roles, incorporating married-ins, and creating generational cohorts. Joshua is also a co-author of several articles pertaining to actionable family business concepts and an active collaborator to idea development in the field.

He serves on the Board of Directors of Bird Technologies as a married-in, third-generation family member. In addition, he is a second-generation owner of a real estate development and management company in Edwards, Colorado.

Joshua earned a Master’s Degree in Counseling Psychology in 2007 and worked for five years as a professional counselor with individuals, groups and families. In 2015, he earned a Ph.D. in Organizational Systems at Saybrook University with a focus on family-enterprise. Joshua’s dissertation research, “The Role of the Family Champion,” investigated leadership within the ownership group of business families.

Joshua and his wife Alison have two children, and are part of a thriving small-town community where they are founding members of a cooperative school. He enjoys cooking, nature excursions, and is an avid skier and cyclist in his native Colorado.

According to Joshua, “Being able to work with a world-class group of people is very exciting to me because I can learn and grow with the best.”

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Renewal Energizes Multi-generational Continuity

Michael Fassler
Michael Fassler

The new year is upon us! This is a great time to consider the power of renewal and its impact on multi-generational continuity of your family enterprise. Multi-generational continuity requires commitment to the future for the family enterprise to sustain itself and renewal results in commitments. Consider engagement in renewal on three fronts: family relationship, strategic and personal.  This engagement will result in commitments on these fronts, all working in concert and serving to energize the family business system for multi-generational continuity.

Let’s consider the meaning of renewal. The Merriam-Webster online dictionary defines renewal as “the act of extending the period of time when something is effective or valid; the state of being made new, fresh, or strong again.” When you consider that “it’s natural for families to tend toward dis-organization and separation over time”[1], that business strategies are always moving toward commoditization, and that individuals tend to get into and remain in their comfort zones and become complacent, renewal on all three fronts extends and strengthens the effectiveness of your family relationship, your strategy and yourself.

The most significant risk to multi-generational continuity is deterioration of the family relationship. The result of engaging in family relationship renewal is an increase in affinity throughout the family making it more attractive to be together and work together thereby decreasing the risk. Increasing affinity requires spending time together in settings where individual family members feel their voice is heard, their contributions matter, and they are able to enjoy the company of other family members. Options include family events such as family celebrations, family meetings, family vacations, family business conferences and family retreats.

If your family events are feeling stale and the lack of energy or participation is waning, reach out to a broader segment of the family for input on freshening up the content and activities. Sharing your own expectations and getting updated on others’ is perhaps the most powerful outcome of family relationship renewal.

Competitive pressures are fierce and maintaining an edge in your marketplace is a continual challenge. Strategic renewal helps you maintain, if not gain, an edge. Strategic renewal involves making decisions to commit resources to evolve how your business creates value and competes in the marketplace. It results in commitments such as: deepening customer and/or vendor relationships to increase their cost of switching; building your brand; evolving your processes to achieve a higher level of operating efficiency; divesting of a legacy business enterprise; or increasing your geographic or product line scope to gain economies of scale.

You know a commitment is strategic if the investment requires making a trade-off such as between the investment and increased dividends. Investing in strategic renewal takes courage, particularly when things seem to be going along rather well and there is not a crisis at hand.

Personal renewal is about focusing on yourself in order to learn and grow your capability to be effective in your multiple roles as a family member, business leader, shareholder and director. Although seemingly more simple because it requires only you to commit, personal renewal requires courage as it involves self-examination and an increase in uncertainty. Personal renewal involves engagement in such things as changing the way you behave, learning a new or deepening an existing functional skill, understanding better the impact you have on others, taking on new responsibilities which involve risk of failure, and sharing power and control. Making commitments in these type of areas can be tremendously energizing for you due to the sense of satisfaction gained from the growth which takes place.

A practical framework to apply to renewal on each of the three fronts – family relationship, strategic and personal is:

  1. Reflect on the past.
  2. Assess the present.
  3. Imagine the future.
  4. Commit to action.

Periodically applying this renewal experience framework will result in commitments which create the energy critically important to achieving multi-generational continuity.

What will you do this year to renew your family relationship, your strategy and yourself?

[1] David Lansky article: “Ties That Unbind” in Private Wealth Magazine; March/April 2015.

Does Distance Makes the Heart Grow Differently?

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Stephanie Brun de Pontet

While some of my clients have their extended family all in one community, that is more the exception than the rule.  Our North American culture is very mobile and it is common that young adults find professional or other opportunities that will take them away from “home” and may lead them to put down roots in new cities and states.

This leads to a few common challenges for enterprising families. First, family members who grow up in the home community of the family’s business are raised with the visibility of being affiliated with the owning family in a way that is less central to the experience of those growing up elsewhere.  This can be a burden if it leads to a lot of negative attention (e.g, if the company has layoffs that affect your neighbors) or if it casts you in a stereotypical and narrow role: “Oh, he’s from THAT family.”  Family members who grow up away from this limelight may not always appreciate the extent to which this facet of the family can dominate one’s broader community and growing up experience.

Another difference is that family members who grow up in the home community are more likely to have parents working in the business, which can also impact their sense of connection. I have seen cases where this leads the next generation to feel a deeper connection to the business because they know executives, attend company holiday events, regularly visit the offices, etc.; and others where they feel less connected because in their mind: “that is what mom does” and is inherently something from which they want a little distance.

Of course, the impact of growing up elsewhere can also lead to feelings of distance or closeness. I have observed that if the initial generation that moved away has a negative attitude about the enterprise, their kids are likely to grow up disinterested and detached.  On the other hand, if the parent’s generation feels connected to the legacy and engaged as owners, their kids often grow up deeply curious and eager to learn as much as they can about the business.

Finally, the other place where family geography can lead to different perspectives is around the family and business’s shared philanthropy.  While most family members understand that a significant proportion of family giving may be anchored in the community where the business is situated, those who grow up elsewhere often want the opportunity to also expand the reach of these efforts into their own communities. Getting a family aligned on how and where they want to make a difference certainly gets more complicated with expanded geography.

While you should not assume family members who grow up elsewhere are inherently less connected to the business – you do need to proactively engage them as committed stakeholders.  Strengthen lines of communication, nurture their interest and curiosity, proactively look for ways for them to interact with the business or business leaders, help them appreciate the challenges and joys that come from living and working in the home community, and expand your sense of what the family’s “communities” are and mean. These efforts help all stakeholders feel as strong a connection as they can to the legacy of the past and the vision going forward.

Employee Appreciation

David Ransburg
David Ransburg

I grew up in a family business, a sprinkler manufacturing company in Peoria, Illinois. My father ran this business for nearly 40 years, and I had the privilege of working in this business myself. While not every decision my father made turned out to be right, he made many excellent decisions. One of the very best was instituting an annual event he called “Employee Appreciation Day.”

Briefly, Employee Appreciation Day consisted of all office workers spending one day in the company’s factory or warehouse, laboring alongside the regular employees of those areas. This event served a number of purposes. First and most generally, it brought employees together for a full day, thus breaking down some of the structural barriers inherent to these separate functional areas.

Second, this day of direct interaction provided more specific knowledge that was helpful to all employees. For example, working on the assembly line allowed sales people to better understand how the products worked and to better appreciate the care that went into the creation of each item. Manufacturing employees could share process improvement suggestions with managers they wouldn’t otherwise see.

Most importantly, Employee Appreciation Day (which included a pizza lunch for all employees) strengthened the company’s conscious culture of cohesiveness and collaboration — a culture that provided the company with a competitive advantage in the marketplace.

What strategies have you tried for strengthening the culture of your family business?

Time to Get Away?

David Ransburg
David Ransburg

Years ago, I had the pleasure of visiting with a wise family business owner/operator named Tom Gulliford. He shared with me his unusual philosophy about vacation time: all employees must take a minimum of two weeks’ vacation whenever they take time off. His reasoning was that anything less than two weeks did not allow the employee to truly get away from work… which was the entire purpose of vacation in the first place!

Mr. Gulliford’s intuition has since been supported by many researchers.  (Click here for a summary of these studies.)   We now know of the many harmful consequences of work/life imbalance.

The constant pressures of business competition often compel companies and their employees to work ever-longer hours, so there’s no easy solution to this problem. Family businesses, though, can lead the charge. I say this because changing our perspective on long work hours requires a long-term perspective. While an examination of a particular moment may lead one to continue working, a longer term perspective will make it clear that occasional breaks are required. As is often said, “It’s a marathon, not a sprint.”

And, who is better positioned to take a long-term perspective than family businesses? These companies – many of whom have lengthy histories – measure time not in hours or days. but in generations. This perspective allows family businesses to see an extended vacation not as a short term loss, but instead as an investment in the long term… an investment in the individual and an investment in the business.

Whether it’s taking the “Gulliford Approach” of minimum vacation time or some other strategy, how is it that your family business manages that long term investment of employee work/life balance?

The Confused Cheerleader: A Lesson for Sibling Partnerships

Barbara Dartt
Barbara Dartt

At my son’s middle school basketball game this week, I overhead a young cheerleader say (to her coach!), “No offense to our guys, but I want the other team to win.” The coach is a friend of mine, so I caught her eye and we shared a good laugh. She certainly has her coaching work cut out for her!

Every time I picture that exchange in my head, I laugh out loud. It’s just so incongruous: a CHEERLEADER, whose whole purpose is to support a team in their pursuit of victory, pulling for the OTHER team. It just doesn’t make sense. And, as usual, the example got me thinking of family business. (Stay with me here!)

I have had the honor of interacting with several sibling groups over the last couple months and these groups fall into two camps: siblings who respect each other and siblings who do not.

The sibling groups who respect each other can lack a shared vision. They can lack structure and governance needed to effectively govern their business. They can be stressed by changes in their industry. But the foundation of respect and true appreciation for each other give them a base to come together and effectively work through these challenges. I’ve even seen situations where they come together to do the needed work and decide that one sibling is no longer aligned with the business vision. Departure of a respected sibling is difficult and strains relationships, but holidays and family togetherness are almost always preserved.

I’ve also observed sibling groups put in terribly difficult situations. Often, the siblings have been together for decades but don’t have the foundation of respect and true appreciation for each other. These situations were brought to mind by our young, confused cheerleader. Her role was clearly to cheer for one team (she had on the uniform for goodness sake), but she was rooting for their opponent.

These siblings love the family business and enjoy their roles within the business. They bring value to the organization with their competence and passion. And they deeply dislike their “partners” – co-managers or co-owners – who happen to be their siblings. How can you be professionally fulfilled when you love your work, but disrespect your coworkers? How can you be fully effective when your uniform puts you on one team, yet you feel like the opponent of the very team you’re supposed to be cheering for?

It is definitely a confusing and challenging place to be with stakes much higher than a 7th grade basketball game. I have deep empathy for adults who have devoted decades of their life to a family business and feel like their profession and passion can only be fulfilled if they stay in the business. However, staying in the business puts them in daily contact with folks they don’t respect.

If you’re contemplating becoming part of a family business in an owner or manager role, think deeply about your potential “partners” – the siblings (or cousins) you will interact with regularly. If you don’t respect or appreciate those folks, I urge you to pass on the opportunity. While our young cheerleader just needs a little coaching, I rarely see these feelings improve with time in the family business.

Finding Balance and Joy in the “Busy” that is Life

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Stephanie Brun de Pontet

Busy seems to be the stock response to “How are you?” these days.

We all struggle at times to balance competing demands for our attention from family, work, community,and other commitments. Sometimes we can feel overwhelmed by the frantic pace and lose sight of how fortunate we are to actually have so much going on in our lives.

  • Yes, children can be self-centered, create disorder, and put huge demands on our time… and they bring humor, new experiences and growth to our lives.
  • Yes, work requires long hours, difficult collaborations, and travel or other personal life sacrifices… and enables us to interact with other driven people, stretches us to learn new skills, and in a family business – allows us to know our family members more deeply than most.
  • Yes, community engagement can be frustrating, inefficient and hard to get initiatives sustained…. and they permit us to make an impact, change lives for the better and get to work with people who share our values.

The truth is, there is little in life that is really worth doing or deeply rewarding that does not require sacrifice and effort.  While we all need to make sure we carve out some quiet time and opportunities to take care of ourselves among all the responsibilities we shoulder, the truth is we are tremendously privileged to have these responsibilities. It means we are fully functioning grown ups, it means there are people who believe we make valuable contributions to important goals, it means we have love and joy in our lives….

The next time you are feeling stressed by your over-committed calendar, take a minute to smile about the richness of your life that is in fact evidenced by all you have going on.

Age and Appreciation

Amy Schuman
Amy Schuman

I turned 60 this summer. I feel as energized, curious and active as ever. But, I do notice a few significant differences.

A source of great pleasure is spending time with family. Sitting on the floor and trading monosyllables (mostly ‘Ga!’ and ‘Da!’) with my 9-month old granddaughter is one of my greatest joys.  If I had a choice between seeing a prize-winning movie, hearing an award-winning orchestra, eating a gourmet meal or feeding strained peas to the baby, I would take the latter without batting an eyelash.  Quite different from when, as a young parent, I longed to get out of the kitchen and away from the babytalk and mashed vegetables.

Professionally, a source of great pleasure is sharing observations and insights with colleagues.  Collaborating as part of a team in support of client success is much more satisfying than being a heroic (and more limited) solo practitioner, even if it takes more time and some patience. I recently co-authored a book on Human Resources in the Family Business (coming from Palgrave McMillan in November) with Wendy Sage-Hayward and David Ransburg, two of my FBCG colleagues. Learning and creating together took a bit more time, but it was fun to tussle, disagree, and thus synthesize new insights together.

And, it’s not like I’ve stopped exploring. My late-in-life interest in mindfulness has taken me to retreats in Germany, France, New York and California, and introduced me to a wonderful variety of practitioners from around the world.

I’ve been reading Atul Gawande’s wonderful book, Being Mortal. He talks about the changes that come with age — how people tend to focus more on what’s known and familiar, as vs. seeking new experiences and acquaintances. How people enjoy slowing down, doing less, going deeper rather than wider. He points to research that links this  —  not to aging, or decrepitude  —  but to a sense that the time ahead can be short, and that every moment is precious.

These pleasures, of course, are available to us regardless of age. We don’t have to wait for age 60 to appreciate our loved ones or our teammates.

We can take a moment to appreciate their presence at every age.

JoAnne Norton Named Cal State’s Interim Family Business Chair

JoAnne Norton
JoAnne Norton

Congratulations to FBCG consultant JoAnne Norton who was recently named interim Rick Muth Chair in Family Business for Cal State Fullerton’s Mihaylo College of Business and Economics.

She will hold the position for the 2015-16 academic year while a national search is conducted to fill the permanent position.

“She brings tremendous knowledge about family business, wisdom with regards to family dynamics and communication, and passion for assisting family businesses to achieve their potential,” said Ed Hart, director of the Center for Family Business at Cal State Fullerton. “We honestly could not be more excited for what JoAnne brings to the center and to our members.”

Norton has been working with multigenerational family businesses for more than a decade in the areas of family governance, communication and leadership training. A former vice president of shareholder relations for a family-owned media company, she has taught in the business college for seven years and facilitates two peer affinity groups of the center. She holds a doctorate in organizational leadership from Pepperdine University.

The endowed position was established through a fundraising drive led by major donor Rick Muth, president of Stanton-based Orco Block. Muth is a founding member of the college’s Center for Family Business.

The center was established in 1995 as a partnership between the business community and the university. Its mission is to enhance the well-being and survivability of family businesses by providing opportunities for education, interaction and information tailored to business needs and concerns.

Ten Qualities of Successful Family Businesses

Drew Mendoza
Drew Mendoza

This week’s blog is an easy-to-grasp list of 10 qualities I’ve noticed about the underpinnings of high-functioning family businesses over the last 25 years. These are not things I made up. They are philosophies and guiding principles of families I’ve been honored to serve and speak with.

  1. Estate planning is NOT continuity planning. Confuse them at your peril. Estate planning is necessary but usually not sufficient. Continuity planning will include these critical matters: leadership transitions of the company, the board and the family; the rules that govern the board, compensation and performance measures; company strategy; shareholder education; and your vision and purpose for being in business together.
  2. Family meetings should help plan for future generations of ownership and encourage leadership, fun, shareholder development and meaning. If the meeting does not work out as well as hoped the first time, give in and go hire an expert to facilitate the conversations that are required. And, while we’re on this subject, another reason to use an outside facilitator is because it is hard to come across as neutral and objective when you’ve got a large stake in the outcome of the conversation. Being a member of the family, an employee of the business or a member of the board may skew your thinking and ability to seem unbiased to everyone else in the room.
  3. The family will need expectations aligned around many areas including their expectations for growth, risk, profitability, liquidity, purpose and policies like how we select leaders and who can be on the board.
  4. Salary, bonus and distributions/dividends are different. I’ve seen many a family co-mingle them in order to minimize or avoid tax liabilities. For families that intend to continue the business to the next generation, this is frequently the source of big problems later on.
  5. Have an appropriate, functioning corporate governance structure.
  6. Run the business and the board as a meritocracy.
  7. Beware of conflicted advisors.
  8. A leadership change will likely take five to 10 years of preparation and execution and another three to five years for the new leader to get their sea legs. All concerned must commit to hang on and work through the difficult times that sometimes arise. Remember that although we’re related, we usually view aspects of our realities differently from one another.
  9. The transition of the company’s ownership and leadership is a dynamic strategic imperative that will benefit from having the right foundational building blocks in place. Know your values and divine a strategy that reflects those values. Be honest with yourself and each other. Have thoughtful policies about compensation, the purpose of profits (in all their forms), the responsibilities and purpose of ownership, and be open to accountability.
  10. Be patient with one another and the process of transitioning leadership and ownership of an enterprise.

If one or more of these strike you as something you’d like to read more about, let me know.  I’ll be happy to introduce you to articles and books specific to each of these 10 points.  And, by the way, each of these points can be a discussion item for shareholder, family or governance meetings.

To contact Drew Mendoza, Managing Principal, please call (773) 604-5005 or email mendoza@thefbcg.com.