We often hear from management that board meetings are “a waste of time” where directors “don’t really understand our business” and “don’t contribute much to enhancing our strategy.”
That is unfortunate.
Yet in many cases, the primary source of the problem is not poor director choices, as much as poor management preparation for board meetings.
Directors generally are sincere in their wishes to add value and make a difference for management and for the business. They also typically bring deep experience across multiple businesses and industries. So how is it that they attend board meetings without bringing significant value? There are a number of things that directors expect (or at least hope for) from management in order to help ensure that they can contribute real value.
Below is a list of considerations for management as it prepares for board meetings:
Is enough time allotted for the board meeting? (Most effective board meetings are at least a full day in length.)
Does the agenda indicate enough specificity in terms of what directors should give thought to before the meeting?
Do you allot sufficient time for strategic discussions (versus financial review, operational problems, or regulatory issues)?
Have the directors received the completed board packet information at least one full week (and preferably 10 days) in advance of the board meeting?
Is there a cover page to each section of the board packet which summarizes the key issue(s) and the key questions that management would like directors to be prepared to discuss?
Is management prepared to discuss the issues without running through slides that the directors have already read in the packet?
Directors aren’t perfect and sometimes, poor director choices are made. On the other hand, it is probable that management can step up its game in terms of equipping directors to contribute more meaningfully in board meetings!
In a family business, it is not unusual for a junior generation family employee to become stuck in a job where he is under-performing. When this happens, it can be difficult for family management leaders to talk openly with the younger family employee about the situation. Although folks working with the family employee are well aware of the situation, no corrective feedback is given.
This can be even more difficult if it is a sibling or cousin that is observed to be in a rut. Commonly, the junior generation family employee feels strongly that there are artificial limits placed on what he or she is allowed to do in the organization, perhaps because of age, experience, or unhealthy family dynamics that are playing against them. Often, nothing is said as speaking up may create tension and nobody wants to hurt loved ones.
This is not a healthy situation. For the company, the business is robbed of a family employee who could either excel and add much more value to the company, or exit and make room for a nonfamily employee who would be more successful in the position. For the junior generation family employee, being in a stuck position creates frustration as valuable life time is being spent doing something that is perceived as either not meaningful or lacking direction.
When this happens, the status quo can continue for months or even years if neither side speaks up. Once the pattern is entrenched, senior generation leaders may form judgments about the junior generation employee’s motivations and assume that they are lacking. The junior generation may form judgments about the senior generation’s typecasting and form judgments as well. Both sides begin to see each other as the problem and a decline in mutual respect sets in. A better model is needed.
If you see yourself in this situation, don’t settle for the status quo. You and your organization are much too valuable to settle for this no-win scenario.
Here are some actions you might consider:
What the “stuck” family employee can do:
What the senior leader can do:
Quit complaining about things not being the way you want them to be. It does nothing to help you.
Quit labeling the junior employee as ineffective and commit yourself to helping him or her develop into a better person and employee.
Identify a resource that can coach you to clarify and state your desired goals and roles.
Work with ownership to develop a comprehensive family employment policy that addresses an expected family work ethic and identifies career resources available.
Communicate your hopes to your supervisor or HR Director, asking what specific training or behavior changes you could make that would increase your chances of reaching your desired goals or roles.
Speak with the younger generation employee about his or her desired goals and roles, listen to what is shared and write it down. (If he or she has no future goals, request HR assistance or outside coaching as a way to help the person gain clarity.)
Create an action plan to develop the specific skills or experiences needed to reach your goals, even if it will take time (like furthering your education).
Once goals are clearly stated, work with HR or appropriate supervisors to identify behavioral, educational and experiential requirements that will be needed for the person to advance. (Request coaching for this person through HR or outside resources, if it is needed.)
Talk to senior family leaders about your hopes and what you intend to do to reach your goals, asking them for further input on what you can be doing to become more valuable to the organization.
Determine what corporate resources are available to help the junior generation employee achieve his or her stated goals, and what strings are attached (e.g. the company will pay for courses in which a B or better is earned).
Use your coach or another person to serve as a support resource to help you stay on track.
Clarify what role senior family leaders and immediate supervisors will have in providing guidance and feedback to the junior generation employee.
If you realize that your needs cannot be met inside the company, don’t be afraid to pursue your career outside of the family business. You may end up developing a stronger skill set that will allow you to reach your goals in the family business at a later time.
Affirm progress towards goals and expect setbacks, but don’t fall into the trap of labeling. Be honest in providing feedback that will help the junior generation family employee get back on track.
Senior FBCG consultant Stephanie Brun de Pontet was a recent podcast guest on Business Confidential Now with host Hanna Hasl-Kelchner.
The show explored how a family business can grow and prosper and successfully transfer from one generation to the next while at the same time avoiding blow-ups and other situations that make for really awkward family get togethers.
Interview highlights include:
The most common first generation family business challenges.
Which should come first, business or family?
Why it’s important to manage a family member’s sense of entitlement.
Distinguishing the rights and duties of family business owners who don’t work in the business from those that do.
Why pay objectivity is more important than pay parity among family working in the family business.
The quintessential family business succession challenge.
Why next generation leaders must be empowered to adjust leadership styles.
The word profit invokes thoughts of selfishness amongst some, benefit amongst others, and a necessity in family business. While the love of money may be the root of all evil, the pursuit of profit is necessary in order to sustain any ownership group’s goals. But what role should profit play in driving behaviors of business owners?
Recently, I was confronted with a discussion in which a person shared that the only goal of business should be the pursuit of profit. When this view is taken to its extreme, employees in a company end up being viewed as replaceable automatons and leadership drives towards ever increasing levels of accountability to the point that a business starts to represent a slave enterprise.
One of the most rewarding experiences of my consulting career has been to experience the many ways that families approach earning business profit as an essential goal, but not to the exclusion of other goals they may have as an ownership group. One family ownership group may choose to organize their enterprise in a way where work life balance is of primary importance, believing that the essence of humanity is not either work or play, but a balance between work and the enjoyment of life in its many forms.
Another family may view their enterprise as an entity whose financial performance is critical to achieve their philanthropic goals outside of the business. A return therefore becomes imperative not just to provide a comfortable living for owners, but to further support their efforts to impact the world in positive ways – sometimes to the benefit of the business, but often times without any spotlight to gain publicity or benefit.
One other reason many owners are concerned about profit is to sustain their ability to keep their workers employed. One of our clients shared with great pride about a long-term employee who has sent two children through medical school while working for her family business.
In all of the situations above, the owning families could choose to focus on profit to the exclusion of all other ownership goals. Instead they see profit merely as a tool to achieving something greater than themselves.
When it comes to leaving a legacy, if the legacy consists of dollars alone it is likely to be an empty legacy void of any real purpose. The lasting legacy runs far deeper than money. In fact, the families who pass on the strongest legacies rarely focus on wealth as their primary purpose, even though they may possess great wealth. Instead, they seek to create an impact on the world through their core beliefs, business practices and philanthropic efforts.
Profit is just a tool to help them complete their noble journeys.
My father, Harry Louis Schuman, passed away earlier this month. He was over 90 years old and in decent but declining health. Even at the end of his life as his circumstances became quite limited – no more driving, diminished mobility, many medical challenges – whenever asked how he was doing, his answer was always an enthusiastic: “Fantastic!”
All 10 grandchildren and step-grandchildren came to Chicago for the funeral, at very short notice, from near and far (including Berlin, Ann Arbor, Los Angeles, Massachusetts, Normal and Chicago, IL). Family, friends, colleagues and neighbors gathered for hours (actually, we gathered for seven days, the traditional shiva period of Jewish mourning), sharing stories and remembrances.
Many useful lessons were embedded in the memories that people shared. Humbly, I offer just three that stand out from this sad but grateful time. What did people most remember about their time with my father?
His discipline and commitment: One example: my dad attended 6:30 AM religious services every Thursday morning, often waking us kids in the dark to take us along and treating us to a chocolate donut afterwards before dropping us off at school. It was tough to get going so early in the morning, but provided a direct experience of what commitment to a community really means. True commitment means stretching outside what’s cozy and comfortable, and discipline requires it be done on a regular basis.
His non-judgmental presence: Many folks revealed that they had confided their troubles and challenges to my dad, privately, and he never violated their confidence. They described how he listened without judging, often without giving advice, just offering his presence and support. I have vivid memories of my dad pulling me aside as a child, sensing when something important was bothering me and offering me a chance to talk it through with him without him flooding me with instructions and advice. He trusted my ability to work out my own answer.
His goofy fun lovingplayfulness: My dad loved to leave extemporaneous, singing, voicemail messages that most of the grandkids still have saved on their phones. He gathered all the grandkids for an annual pilgrimage to Popeye’s chicken, in honor of the fried chicken from his Memphis hometown. No Parents Allowed. (See picture below, circa 2009 or so. Unfortunately my dad is not in this picture, but my stepmom can be seen at the end of the table.) My dad personally decorated the envelopes of birthday checks with multicolored exclamation marks and hearts — making the envelope as much a treasure as the birthday check inside.
This is just a bit of what we all heard, and learned about Harry Louis Schuman. Nothing brand new, or flashy, or even surprising. However, all of the modest, daily, steady, dependable and generous actions taken by my father throughout his lifetime added up to a mighty and far reaching inspiration, one that is alive and well in all of us who now aspire to make his example our own.
Too often we fail in our desired communication. We often believe this is due to failure on the part of the recipient to accept our message. And, sometimes, we may see failure on our part to deliver the message.
The more intentional we can be about substantial conversations, the more likely we are to achieve our desired outcome. But, that begs the question – do we always know what our desired outcome is? When entering into a substantial conversation, how often do we take the time to prepare ourselves?
The importance of intentional communication struck me over the holidays when I had the opportunity to simultaneously spend time with my parents and my teenage children. As I thought through my interactions with both, I realized that each generation was in a part of their lives that colored their communications.
Many teenagers desire in their communication with their peers is to be liked. So, that impacts how they communicate. On the other end of the age spectrum, elders (parents, superiors at work) often have a desire to educate in their communications, to share the wisdom of their experience and prevent others from making similar mistakes.
While each of these intentions is real and important to the speakers, often they are delivered in a way that doesn’t achieve the desired outcome. Teenagers who desire to be liked are often evasive in their communication, not committing to a point of view or not being honest. This can backfire, getting them into situations where they can be labeled as dishonest or where they have not been true to themselves and their values. With elders, the desire to educate can often be perceived as judgement or criticism. In both cases, speakers have failed at achieved their desired outcome.
As a result of observing this situation, and my frustration at reacting to communications from both generations, I decided to do an experiment for one week. Before I spoke in what I term a “substantial conversation” (meaning one where I sought an intentional outcome), I would stop myself to ensure that I was clear on:
What my intention was in communicating. (Was it really to help someone else or was I venting?)
What the desired outcome was of the conversation. (Did I just want to be heard or did I want something to change?)
What was the likely receptivity of the recipient. (Would they be open to my message, discount it or ignore it?)
It was a very interesting exercise. I found that in the instances where I was able to stop myself to plan my communication (which wasn’t every time, I’m sad to say), my communications had a much better outcome. I was clearer on what I was trying to accomplish. My message was better prepared. And, I set up the communication in a way that the speaker was likely to be more receptive. In several cases, after thinking it through, I chose not to communicate at all because I realized that nothing good would come of that communication.
Families who are in business together have great needs to communicate effectively – it affects their relationship as well as their success in business. Yet, they are often the most challenged due to unaddressed baggage or hurt, complex power dynamics and inability to “get away” from each other if needed. Learning how to communicate intentionally is a process or skill that benefits families greatly on a one-on-one level as well as in planning group interaction. And like any skill, it requires a lot of practice to perfect.
Try your own intentional communication experiment and see how it works for you. (And if you figure out the key to conversing with teenagers, please share it with me!)
FBCG is pleased to welcome Joshua Nacht, Ph.D. as the newest consultant to our 25-member team. He brings a complementary 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.”
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”, 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:
Reflect on the past.
Assess the present.
Imagine the future.
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?
 David Lansky article: “Ties That Unbind” in Private Wealth Magazine; March/April 2015.
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.
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?