All posts by Kristi L. Daeda

Avoiding the “to-do list” mentality

Kristi Daeda
Kristi Daeda

One of the great benefits of the ever-increasing dialogue around family business challenges is that many families have a much clearer picture of the things that are required to sustain the business into future generations. Readers of our books and articles will see that our experience with business-owning families has shown certain things to be very helpful in balancing the needs of family and business, including independent boards, family councils, family policies, family meetings, and family education.

And so, it can be tempting to dive in and start putting those things in place. Take the example of instituting a family council. It can seem fairly simple – selecting people to serve on the council, organizing meetings, creating agendas, etc. A successful family council, though, requires the family itself to change, giving up old ways of communicating and making decisions in favor of this new structure. This kind of change takes time and may feel like two steps forward, one step back for a while until the family adapts.

This is why the process of how these important structures are created is as important as the structure itself. A board of directors will be most effective when the board has the trust and respect of the family. A family council will work best when the family understands its purpose and respects the council members who represent them. The process of creating these structures includes what they are and how they’re formed, plus education, agreement, and engagement.

As we enter a New Year we may look to set goals that will move our families towards better continuity planning. Keeping the focus on both where you need to go and how you’re going to get there is important to smoothing out the bumps in the road on the way to change.

Getting more out of 2015

Kristi Daeda
Kristi Daeda

Earlier this year, Kelly LeCouvie wrote here about the book Essentialism (a book I have not got around to reading yet – perhaps that should be my New Year’s resolution?), and the importance of the “disciplined pursuit of less.” Amy Schuman and Stephanie Brun de Pontet wrote about mindfulness and its benefits for family enterprises for The Family Business Advisor.  Just today I had multiple conversations with people who used words like “anxiety,” “pressure,” and “time-sensitive.” In our conversations with family, friends and colleagues, we see these themes repeated – there’s seems never to be enough time, energy or attention to do all of the things that we want and need to do.

It follows that our lives – often over-scheduled, over-committed, and awash in information – won’t accommodate the things that are most important to us unless we make them a priority and put them first.

So, in honor of the closing of 2014 and with a hopeful look at the coming year, here are some questions that I’m asking myself to help me plan for my priorities first. I hope that they spark a thought or idea for you as well.

  1. What happened in 2014 that should continue in 2015? Perhaps you had an incredible family vacation, or started regular coffee dates with a valued friend. Maybe you found great business insights from an unexpected source. The stand-out moments in our lives can seem like a one-off, but we can welcome more of them by creating more opportunities for them to happen. How might you make more of these opportunities in the coming year?
  2. What’s important to you that, if you don’t plan for it, could fall by the wayside? This year, with busy schedules and being scattered across the U.S., we weren’t able to get my extended family together for the holidays. To avoid that in the future, we’ve already started the conversation about Thanksgiving 2015. The same can happen to things like family meetings, personal health, strategic planning, or time for training and mentoring younger family members. Making a commitment before other things get in the way – especially a commitment to others – creates an anchor that the rest of our obligations can revolve around.
  3. Where did you spend time this year that most engaged or energized you? It could be time serving your community, planning for the future of your business, reconnecting with loved ones, meditating or exercising. Which places, activities and people naturally recharge you? How can they play a bigger role in your life in 2015?

With some thought and a little planning, we can all have more of what’s important, and not just what’s urgent or expected, this year.

Why executives seek service on family business boards

Kristi Daeda
Kristi Daeda

As leader of FBCG’s Governance Practice, I often interview executives pursuing board service. Their stories are always interesting – full of career twists and turns, successes and lessons learned.

One thing I always ask is what their goals are for future board service. What kind of company excites them? What’s the contribution that they hope to make? The answers to these questions are telling – both in their perceptions of board service in general and their ideas of what it means to be a director for a family business board.

These successful men and women come from a mix of backgrounds. Most have worked in family firms within their careers, either as a family member or a trusted non-family leader. Many have served on other boards in the past, including public company boards. Regardless of their experience, many of the themes that move them to serve on a family business board are the same:

“I’m excited by a business that has a strong focus on values and vision.”

“I want to serve on a board where I can share my expertise and make an impact.”

“I like a board that can take a long-term strategic view.”

“I want to keep learning.”

“I want to work as a team with others for a common cause.”

They often see a family business board as a better route to these aims than public boards. They expect – and find – that family business boards will allow them to build rewarding working relationships with family ownership, have a long-term effect on the business, and derive more satisfaction from seeing the business impacts of their work than other board settings.

This is good news for all involved. Family business directors get an environment where they’re accepted as strategic contributors and they see the fruits of their labors on the bottom line. The businesses they serve get access to expertise from engaged, passionate contributors dedicated to the larger vision. In a well-functioning governance system, the outcome can be a meaningful and valuable partnership.

Why family businesses build stronger boards

Kristi Daeda
Kristi Daeda

Boards in family enterprise can be as diverse as the families they serve. And just as the family changes, the board must change to respond to and stay ahead of new circumstances – both predicted and unforeseen.

In the early stages of the business, a board is often comprised of a founder, one or more other family members, and maybe a key non-family executive or two. Their conversations are often unstructured and decisions may or may not be communicated to other stakeholders, such as other owners or future owners or key management. This “board” may evolve to include paid advisors, like an outside attorney or accountant. Sometimes, close friends, business partners, or other trusted supporters are invited to participate.

As time moves on, a family business may reach an inflection point – a place where the board structure as it exists may not be suited to address the challenges or questions the business is facing. This is where we begin to engage with families in board development, the process of defining appropriate business governance structures for their unique situation.

What brings family businesses to build stronger boards?

  • Professionalization of the business. As the family strives to improve their business approach across the enterprise, it’s natural to look also at improving the board function. Shareholders, employees and the community may perceive the business more favorably that has developed criteria for board service and recruited well-respected leaders to serve.
  • Generational transition. Many founders seek to formalize a board to provide impartial guidance on succession planning, support the successor and provide a structure with which the next generation can effectively interact.
  • Issues with business growth or performance. If a business has plateaued or is struggling, leaders often look to independent directors for a fresh look at strategy.
  • Market opportunities. As with those that are struggling, businesses experiencing rapid growth or seeking to capture market opportunities can seek perspective from independent directors that have done similar things in their own careers.
  • Family conflict or disagreement. Tensions in the family may make board discussions unproductive or impossible. The board development process can be the conduit for better understanding of the role of governance and trust in the board. Plus, the board itself can be an impartial and safe venue for discussing challenging issues.
  • Changes in management. A capable board can provide oversight and accountability through the management transition.

A well-constituted board is an advantage at any stage. When the normal and predictable challenges like those above appear on the horizon, the advantages of a strong board become even more compelling. If you don’t yet have a board, or are unsure of whether your board is functioning as well as it should be, it may be time to begin questioning what that board would look like, and how it can support your family enterprise.

The Importance of Mentorship

by Kristi Daeda

“I have had my 15 minutes of fame and enjoyed my time in the spotlight and walking at the head of the parade. I believe that to whom much is given, much is expected. I want to give back. I enjoy watching younger people learn and develop. By helping others, I may in a small way be able to influence the next generation.”

         – Jack Pycik, former CEO, in interview with FBCG Principal Steve McClure

In our work with families on succession planning, much time and effort is spent in considering how the next generation will be prepared to step into leadership roles in both the family and the business. One important piece of the puzzle for these emerging family leaders is mentorship.

Mentorship relationships take many shapes and sizes. Some are very formal, with agendas, regular meetings and development goals. Others are more fluid, with meetings as needed or when the mentee requests them. Some of these relationships include guidance and feedback on wide-ranging topics from career goals, to leadership, to professionalism, to family dynamics. Others are very focused, such as a CFO helping a young manager improve their understanding of company financial performance.

Mentoring Benefits All Involved

Regardless of the structure or content, both mentors and mentees can benefit greatly from a mentoring relationship. Some benefits of a mentoring relationship include:

For the Mentee:

  • Experience at building professional relationships, especially with senior staff/company leaders.
  • Support and feedback.
  • Regular focus on professional goal setting and long-term career thinking.
  • Sounding board on how to handle complex work issues and interpersonal challenges.
  • Direct access to advanced knowledge about the business and industry.

For the Mentor:

  • Personal enjoyment of helping another professional succeed.
  • Reaffirmation of professional knowledge and experience.
  • Increased perspective on other areas of the business, trends and challenges.
  • Recognition from superiors as an organizational leader and contributor to overall success.

Mentoring Can Greatly Accelerate Professional Development

The best business lessons often don’t come from textbooks, and our best wisdom often comes from someone who has learned the hard way.

When done well, a positive mentoring relationship can lead to much quicker advancement – not just in job title, but in key success areas like communication, leadership, collaboration, and business thinking. The experience of learning from a mentor’s successes, failures and hard-won perspective, with the opportunity to ask questions and work together to apply these lessons to one’s own day to day work, can create great leaps in learning.

A mentor can also be an advocate (“sponsor”) within the company, helping the mentee identify opportunities for growth and smoothing their path to advancement.

Mentors can be Impartial Advisors

Lastly, and perhaps one of the greatest advantages of mentorship within family businesses, is that a mentor is often viewed as impartial in a way that Mom and Dad are not.

When Mark hears that he needs to step up his communication skills from his father, that message comes with the baggage of the family dynamic, no matter how healthy it may be. The same message delivered by an independent third party can be received very differently. The mentor’s perceived disinterest allows them a unique position as trusted advisor, a plus for both the organization and the mentee.

It’s clear that mentorship is a powerful tool that carries a wide range of benefits for all involved. How might your family embrace mentorship?