All posts by Christopher J. Eckrich, Ph.D.

Getting Unstuck

Chris Eckrich
Chris Eckrich

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.

Profit: Counterpoint

Chris Eckrich
Chris Eckrich

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.

Splitting Roles

Chris Eckrich

We often talk about the many hats each person wears in a family business.  On the business side, one individual may hold the titles of Chairman and CEO, or CEO and COO.  On the family side, one person can serve as both the Family Council Chair and Education Committee Chair.  Individuals that take on leadership in multiple roles in this way are to be greatly appreciated, as with multiple leadership roles come multiple responsibilities.

A challenge develops over time when the “multiple hat”-wearer begins fusing the roles and sees all of the accepted responsibility as “just my job.”  His or her ability to differentiate between the two–or more–roles may become lost over time due to task familiarity.

As succession approaches and it’s time to transition these responsibilities to others, it can be a bit perplexing as to how the various roles should be split.  Without clarity around this question, when a shift is made to allow different individuals to take on the newly split roles, role confusion and frustration are likely to occur.

A quick example:  Arnold had occupied the position of CEO and Chairman.  As Arnold neared the age of transition (in his mid sixties), he determined that the business would be best served by keeping his role as Chairman, while his daughter Alyssa – who had demonstrated much competency over time and earned the position – assumed the role of CEO.  Over the many years of holding both the Chairman and CEO roles, Arnold became quite used to behaving in a certain way. With the new split in roles, he found himself stepping on Alyssa’s toes inadvertently which caused both confusion and conflict.  This caught Arnold by surprise – not a lot of planning went into the role division as they just figured they could work it out over time due to their close relationship.

New approach:  Arnold is suddenly struck by the lack of formality he has given to this situation.  He initiates an exercise whereby each role would be defined clearly in terms of its expectations, responsibilities and reporting relationships.  He includes Alyssa in this process and they work through areas of confusion by asking their Board members for input in the job descriptions they are working on.  Once they have agreed on their positions and reporting relationships, and how they will communicate about the business (frequency, content), the tensions seem to melt away.  This allows each of them to function independently and motivates Arnold to give Alyssa space to be the CEO while he focuses on being the Chairman.

Arnold’s lesson: Just because you are family does not mean you always have to act like it.  Splitting roles, whether they are family or business roles, requires forethought and advance planning.  By approaching the splitting of long standing roles as a professional exercise, Alyssa and Arnold enjoyed a much improved working relationship, which made life easier both at work and at home.

Past, present and future focus in meetings

Chris Eckrich
Chris Eckrich

Spending our lives in business or family meetings is a huge commitment of time and energy.  In order to make those meetings most effective, we do best when we pay particular attention to the degree of past, present and future focus in meeting time.

In board meetings, often a pattern of focus on past performance develops into an expectation of what board meetings should be. At some point, the board begins getting frustrated that too much time is being spent on last quarter and not enough attention is being given to issues facing the company in the present, or future. This tension can bubble up and cause the board to question its meeting practices. Usually this results in movement towards a stronger and more robust board meeting process, with greater focus on responding to today and planning for tomorrow

Shareholder groups often experience this same pattern: the shareholder meeting consists mainly of a review of what has happened in the past. This may continue for a few years, but at some point as the shareholders begin to get anxious about the future. They begin to ask where they are going as a group, and how the entity or the assets they own will help them achieve their goals. Just as in boards, a process of meeting renewal frequently results in a shift of focus to primarily present concerns and future direction.

While it is easy drop into routines and use templates that can be repeated from meeting to meeting, engagement will typically be higher when the board, shareholder group, or even a family group (for those of you hold family meetings) ask the question: “What is our ideal balance of focusing on past performance and history, present situations and pressing conditions, and future direction and strategic intent?”

An imperfect gift

Chris Eckrich
Chris Eckrich

Over the years in which I have consulted with families, I have observed an important, and encouraging, pattern in numerous families whereby the senior generation – despite substantial tensions and challenges in working together – offers the junior generation an opportunity to have relationships unspoiled by the challenges of their parents.

It goes something like this…

The senior generation, often a sibling generation, struggles with managing the emotional aspects of being in a family business together. These struggles are not uncommon, and often simply due to the pressures of being a family together, working with their parents and facing the stresses of the day. Over time, they become overly sensitive to comments or actions that were not intended to cause pain but do nonetheless.

It would be typical that these frustrations would turn into toxicity, which is then shared with their children – the next generation. But in many families something beautiful happens. The senior generation members, recognizing the value of their collective children building supportive and nurturing relationships, suppress their own frustrations and insulate the next generation from daily dramas, allowing the junior generation emotional space to become friends and build relationships. The result is a group of cousins who enjoy their relationships and their time together, often independent of the parents’ participation. In these cases, the collective sense of family created among the cousin group is a powerful force.

Being in a family is sometimes messy and intense. As human beings, we are not perfect.  Many of us have emotional nerve endings close to the surface. We get hurt. We want to attribute the source of pain and frequently look outward for causes. In the worst of cases, we blame others for the entire balance of the messy relationship and are blind to our own part in the drama. In our frustration, we may even disparage our family members to our children, and even to their children.  This creates division within the family.

When the individuals within a generation commit to nurturing the junior generation despite their own pains and the complications associated with the complexities of being in an enterprising family, a great gift is truly given.

FBCG celebrates 20 years

Chris Eckrich
Chris Eckrich

In my last post, I wrote about the need for families to celebrate and build memories. This week marks the 20th anniversary of The Family Business Consulting Group’s founding by Drs. Craig Aronoff and John Ward. Since then the group has grown significantly and we have consultants spread throughout North America serving clients here and around the world. We consider it an honor to build upon the foundation our founders laid and are taking time this week to reflect on all the hard work and effort that went into building an enduring organization that serves the needs of enterprising families.

When reflecting on our first 20 years as an organization we are most drawn to the many stories of hard work, creativity, perseverance, courage and even humor that are part of our history. These stories become the bedrock of our culture and continue to provide clarity around our core purpose. Ultimately, however, the impact our organization makes is determined not by our stories, but by the stories of those with whom we’ve had a chance to interact, either through consulting or through our writings and presentations. As we pause to reflect on our own first 20 years we want to thank all of you, our readers, who have made this journey meaningful and worthwhile. We look forward to being part of your stories as we begin our next 20 years of serving enterprising families.

Blog note: As in Chris’s previous post, we believe in the importance of building connection and history within FBCG. As a thank you to the consultants and staff that support families across the world, and in gratitude to their families who support them in this work, we gathered together to celebrate 20 years of service and collaboration. We’ve shared a peek at that event in the photos below.

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What’s a celebration without cake?

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Our youngest attendee, Rebekah, tries out the silly hat photo booth.

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Cheers!

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Releasing lanterns with notes of gratitude and for future success.

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 Closing out the evening with a little music and dancing.

 

Creating memories

Chris Eckrich
Chris Eckrich

Summer time for most allows at least a partial chance to break from the hectic pace of everyday life and find time for relaxation often in the form of a vacation away from the busyness of home and work. Far from being a marker of laziness, the ability to take time away from intense thought and activity and allow the body and mind to restore allows us to come back to our work or vocation refreshed, often with new perspectives on how to achieve our goals.

Summer is a good reminder that even working families need time for restoration and reigniting the bonds that connect. Some business families only engage in competitive (and sometimes stressful) work environments with each other, but lose touch with (or never develop) opportunities to just be a family. This missed opportunity to create new bonds can prevent the family from building new memories and new stories in the family’s history. Having time together to explore new things (think vacation spots, cruises and such) and to just relax and have fun (think down time in which business does not need to be discussed but joy is experienced together) becomes the fodder for the stories that will become part of family folklore.

It is easy to drop into a mode of “all work and no play” but that truly does make Jack (and Jill) dull and less connected as family members.

As we reflect on the benefits of summer time and look forward to the coming year, in what ways will new family memories have space to be created and banked in the family’s history?

What’s in a Name?

Chris Eckrich
Chris Eckrich

Last week an Associated Press article (Family Battle Brews Over Trademark by Alan Scher Zagier) reported on the legal challenge over the use of a family name in a trademark dispute.  The passion over the use of one’s last name and image is something that many business owning families know very much about.

Family businesses spend inordinate amounts of time and energy building reputations in their businesses.  Quality products and services are part of reputation building, but a family’s reputation as competent professionals and owners with integrity also contribute to perceptions by those in the business and local communities.  The deeper the values run, even if unspoken, the greater the passion that fuels the drive to build and protect reputations.

For younger generation family members, the drives to behave “properly” and bring honor to the family name are often interpreted as over-control by a senior generation consumed with external perceptions rather than behaving authentically.  While this may be happening in a small percentage of cases, overwhelmingly experiences have shown that a deep and powerful family history and story lies at the root of family leaders’ desires to expect (and sometimes demand) behavior appropriate for the family’s name.  Sharing that powerful story among all generations can reveal the deeper meaning behind the family’s high expectations, and create a sense of pride among the family’s younger members.  The family can then unite in protecting their common heritage once the back story gets on the table.  Lacking the back story, the power of the family’s history is diminished and the family is left with interpersonal conflict.

As for the trademark dispute referenced above, we hope the participants find a win-win solution that honors and protects their shared family name.

[Family Battle Brews Over Trademark by Alan Scher Zagier, published March 14, 2014 in The Journal Gazette, Fort Wayne, IN, page 10B.]

Trouble in the Corner Office?

Chris Eckrich
Chris Eckrich

A recent Wall Street Journal article (At Family Firms, Do CEO’s Work Fewer Hours? by Rachel Feintzeig, Wall Street Journal Online, March 5th, 2014) referenced new research by professors at Harvard, London School of Economics and Columbia that measured family firm CEO’s as working approximately 8% fewer hours than their non family counterparts.  Is this an indication of impending underperformance?

Vibrant family businesses are often run by CEO’s who have mastered the art of working on the business rather than in the business.  They may work intensely during much of the year but also find ways to create time for thoughtful reflection on their businesses and are constantly discovering ways to improve not just today’s bottom line, but future opportunities as well.  Their insights are as likely to emerge at 5:30 a.m or 9:00 p.m., and not just during office hours.

Signs of a vibrant family business include:

  • Clear and aligned strategic direction from the ownership group, to the board to the CEO and management team;
  • A culture of high performance in which problems do not fester unattended;
  • An engaged workforce in which each individual understands how he or she contributes to the company’s objectives, and has the resources necessary to meet assigned goals;
  • Mutual trust between ownership, the board, the CEO and the management team;
  • A dynamic and iterative succession/continuity planning process in which the CEO and the family ownership group are actively engaged in achieving generational transition (assuming they have agreed on doing so); and,
  • A constant drive to meet or exceed ownership’s clearly stated objectives (which may include both financial or non financial measures).

Signs of a family business whose future may be troubled include:

  • Owners, directors or executives who are not sure where the company is headed;
  • Acceptance of correctable company problems and weaknesses as just the way things are;
  • Managers or employees who do not have clarity on their work priorities or goals;
  • Distrust between the ownership group, board and/or CEO;
  • The inability to discuss or make progress on succession and continuity challenges;
  • Little effort to clarify what ownership’s objectives are or limited drive to achieve those goals.

CEO’s spending their time driving towards becoming or remaining a vibrant family enterprise position their businesses for future success while CEO’s who lack that drive will generally allow trouble spots to creep into the picture.  Regarding time spent at work, perhaps the best question to determine whether there is trouble in the corner office is, “What are you doing with your time?”

Distributing Personal Effects (Part 3 of 3)

Finding Joy Amidst Grief

Chris Eckrich
Chris Eckrich

When a parent dies, family members each experience a unique set of memories, thoughts, and emotions around the parent who has just passed.  Ideally, extensive amounts of time would be allowed to pass before the adult children need to gather and distribute the personal effects of the deceased parent.

Many families anguish over how they will distribute Mom’s or Dad’s personal effects and how each sibling will respond in the matter.  Readers who have read the previous two blogs in this three part series will know that process comes before distribution.   In other words, the sibling group needs to be clear about the process that will be used to distribute items before items begin being passed out.

Of course, senior generation members often identify specific items in their estate plans that are to be distributed to specific persons.  These items should be distributed as soon as appropriate and no input is needed by the sibling group.  However, there often remain many items including pictures, vases, or tables that have significant emotional attachment by one or more of the siblings.  The best processes seek to allow each person to meet their emotional needs and also balance economic value in the distribution of items.  For parents with high quantities of expensive items, such as larger collections, the siblings may consider whether keeping a collection intact is an option or whether the items will be distributed out individually.  Additionally, consideration should be given as to what percentage of collections will be kept in family hands and what will be sold to either distribute as cash on an equal basis, or help pay taxes or process the estate.

Then we come down to the pictures, paintings, tables and don’t forget Mom’s or Dad’s jewelry.  It is not always clear how the family will navigate distributing these effects without conflicts emerging.  Some approaches that have been used by families (some use multiple approaches) include:

  • Drawing numbers out of a hat and then use a rotating system based on the number one draws.
  • Going through items together and siblings share what items meant to them personally when there is a sentimental attachment.  This allows fond memory sharing amongst the group and teaches the group something about the siblings that they will spend the rest of their lives with.
  • Going through one room at a time and distributing the items as smaller groupings rather than everything all at once.
  • Having all items appraised and then distributing in some order based on each person ending up with the approximate same value.
  • Sharing one or more items of meaning to each of the grandchildren or great-grandchildren.
  • Distributing those items of greatest meaning and then selling remaining items and using proceeds to make a donation or fund a scholarship in the parent’s name.

A key question will be determining the role of spouses in the distribution of effects.  As siblings may have various ideas about this, it will be important for the sibling group to first agree on the role of spouses before spouses become involved in the process, if this is possible.   Another factor is timing.  Families do well to allow adequate time to grieve before engaging in the distribution of effects.  If a family leader is the executor of the estate they will do well to assess each family member to determine readiness for this activity, which may be emotional and particularly difficult for some.

We know of families who use the opportunity to share life stories of the loved parent, especially happy or funny stories.  This is fitting when the stories can unify the group.  Still, personal effects need to be distributed, sold or given away.  A process that is seen as fair will increase the odds that future family relationships are built on support and not eroded by jealousies.