Category Archives: Communication & Conflict

Board dialogue in danger?

Corporate governance debates created more caution among many family business owners to start with or expand outsiders and non-executives on the board. A common reaction I get is that regulations have turned non-executives into ‘box tickers’. “They don’t understand anymore what it means to be entrepreneurial and take risks. They check whether their personal liability is in danger and tick off the items on their checklist”, as a second generation CEO told me recently. Indeed, it is something that can happen but the real question is why do non-executives move into the direction of becoming box tickers. Is it only new laws and regulations they feel they have to comply to?  Or, could it be something about how the board functions? Is it about how the dialogue between executives, family and non-executives is taking shape in practice?

There are several reasons that make non-executives cautious.
In some cases non-executives are used as sounding board but only when the family feels the need. It’s one way instead of a constant exchange of ideas and questions. Sometimes there is a lack of information or transparency on decisions made by the family. Especially when board members are confronted with decisions the board should know about or least have been consulted on. It also happens that there is a mismatch of expectations. Monitoring and control are assumed to be the primary goals of the board by some board members versus the role of sounding board for (family) executives or the entrepreneur.
A final reason to mention is the lack of understanding of the special dynamics of family businesses. Non-executives underestimate it on the one hand and family business owners don’t include it as an important element in the profile and assessment of board candidates.

These and other reasons easily lead to a board culture that becomes more formal, more procedural and more risk averse. It dilutes in depth and open-minded discussions within the board. It can also lead to a lower level of trust.

A constructive and inspiring dialogue in family business boards is hardly influenced by regulations. In my experience effective family business boards adapt to new regulations but keep the core in tact: a board culture that is build on mutual trust and respect between the non-executive outsiders and the family, a board that puts its sounding board role at the forefront, as well as a shared willingness to discuss in depth the strategic issues at hand.

How do they do that? Some examples.
One board adopts the 80/20 rule: 80% of board time is used for strategic discussions, 20% on finance and compliance issues. Another board puts a strategic topic on every agenda. Management is invited to present the case and background followed by an in depth discussion. Some boards start every meeting with the A.O.B. (any other business). Usually this is put at the last item on the agenda. By putting it first the board ensures there is time enough for pressing issues and that there is a good balance between long-term focus and short-term priorities. A final example is a family business where the non-executive outsiders meet with the family owners separate from the shareholders meeting. One purpose is to make the next generation comfortable with the board and facilitate conversation between family and board.

Two good questions to think about when you travel back after a board meeting.
1) How did I add value to todays dialogue in the board?
2) What made the conversations fruitful or even better than the previous board meeting?

Aren’t the Holidays Enough? Sports Rivalries and the Family Business

Mark Green Photo
Mark Green

If the holidays weren’t enough to stir up trouble for family businesses here in the US, for the past couple weeks we have been in the midst of college football rivalries to add some fun conflict to the family business. Yes, I did say fun conflict, and yes, there is such a thing, and sports can deliver the goods.  All over the country stretching from Southern California with the cross-town rivalries of USC and UCLA, to the South with Alabama and Auburn, to the Northeast with Harvard and Yale and culminating this weekend with Army vs. Navy in Philadelphia, it is rivalry season where brother roots against brother and family alliances and differences are celebrated!

Last Saturday here in Oregon the 114th Civil War game pitting the University of Oregon Ducks vs. The Oregon State University Beavers was played in Corvallis. The “number 1” Oregon Ducks went on to defeat the Beavers by a score of 37 − 20. Now the Ducks will play in the BCS championship game against Auburn on January 10th 2011 for the often-disputed title of college football champions. While the BCS debate is a whole other discussion for blogs and sports radio elsewhere, for family businesses, sports rivalries can be a nice distraction and an enjoyable way to deal with some healthy conflict. Here in Oregon, it was fun to watch families divided in their loyalties as a husband wore green and yellow (colors of the Ducks) and his wife wore black and orange (Beavers) and their sons and daughters divided in Oregon and Oregon State colors. Throughout the stadium the pattern repeated itself as families were divided in their allegiances, and some even went so far as to display the ultimate hybrid — the platypus — melding the Duck and Beaver fan who has ties to both schools. 

Many family businesses in the weeks leading up to the Civil War used the event with their employees as a way to bring hilarity to the work place as various bets and challenges were issued based on their respective allegiances to either the Ducks or the Beavers. I can tell you on Monday morning there were plenty of Beaver family business owners driving to work wearing Duck gear, or having their car adorned with Duck colors or even worse dressed as the Duck mascot. For many around the state of Oregon yesterday was a very long day of humiliation and insults, but there is always next year – and it was all in good fun.

Regardless of the sport it is interesting to see how in some families the long tradition of supporting one team continues while in others the next generation breaks the tradition and roots for the biggest rival – just to shake things up a bit.  Certainly many families use game day outings as a way to bond and socialize together for fun.  With a few of my clients we have used their strong connections with a certain sports team as a motivator to not violate the ‘Code of Conduct’ or they will be required to make a contribution to their rivals’ athletic fund. We have had a great deal of fun with it, and I can tell you the shame of writing that check is a powerful motivator!  A good question to ponder is: ‘How does your family use sports and rivalries as way to build bonds and connections with family and employees?’

How to Have The Happiest Holidays In Your Family Business!

JoAnne Norton
Jo Anne Norton

Having Happy Holidays!

This year I’ve been asked for tips on getting through holiday gatherings with family members when some of them are actively working in the business, some are owners who might not be particularly happy with profits this year, and some are family members who are neither in the business nor owners. Should discussion of the family business be considered off limits?

There are a couple of problems with talking about the family business at holiday family gatherings. First of all, many businesses have lots of jargon and expressions that other family members might not understand. One member of a highly successful multi-generational family told me that when she was with her family and they started talking business, it was like being in a foreign country with a language she didn’t speak or understand. So if you bring up a business concern you need to be aware that you might be starting a conversation that others can’t relate to.

Also, you have to think about the impact of the family business conversation on the children, especially since this has been such a tough year economically for most businesses. What you say this holiday season might make the next generation reluctant to consider joining the family business even decades later.

On the other hand, we have to recognize that it’s tough to completely leave the family business out of the conversation. In October my cousin Barb had our annual family reunion on a gorgeous fall day in Quincy, Illinois, and I had the opportunity to talk to my Uncle Merle who was a second-generation owner, along with my father and my Uncle Louis, of our family’s business. He was reminding me that when the three of them were in the family business they were only off one day a year together and that was Christmas. My uncle told me about one Christmas when they were standing around drinking eggnog and talking shop when my mother asked if there could be just one day a year when they wouldn’t talk about business.

Uncle Merle said that my dad patiently explained to Mom that the company was always top of mind, and that he and his brothers really loved talking about it so much he hoped she would understand. That’s why having empathy-the ability to understand and share the feelings of another-is one of the greatest gifts we can give to each other this year. If you are the one who wants to talk about business, think about the feelings of your other family members. If you are the one who would prefer to have a day without mentioning the business, consider the feelings of those who are always thinking about the business and enjoy talking about it.

Beginning with the end in mind, you want your time with your family to strengthen family relationships. The latest Price Waterhouse Coopers research released at the beginning of November confirms what I’ve found in my own work with family businesses, and that is: if the relationships in the family are healthy, the business is more likely to be healthy. Here’s to happy, healthy relationships throughout the holidays!

You Get What You Give

David Lansky
David Lansky

I was having coffee with Dan, a good friend of mine, a few weeks ago. I was surprised when, apparently from out of nowhere, he said “David, you helped save my marriage.” I was delighted to have been of service, I said, but I had no idea what he was referring to. 

“Tell me more, please!”, I begged, “I”d love to know how I helped, so that I could do it again if need to!”.

“Well”, Dan said, ” A few years ago I asked you what you would say to a family if you had only a few minutes with them to help them get through difficult relationship problems. You thought for a minute and then said ‘If there is something you want from someone in your family, find a way to give it to them.'”

“So”, Dan continued, “I’ve always remembered that.  Last month my wife and I got into a huge fight. I didn’t talk to her for a whole day. I was waiting for an apology from her. I actually thought we were headed for a divorce  Then I remembered  what you said.  And I apologized to her. And we had the best talk we ever had. We understood some incredibly important things about each other. And now I know we are on the right track. 

“So David, that’s how you saved our marriage. ”

Well, I know there are many more reasons why Dan has such a strong marriage. 

But I like to think that there is some truth in what I said.

What Question Should Family Leaders Be Asking Their Followers?

JoAnne Norton
Jo Anne Norton

As the leader of a family business, how can you learn what the major concerns of your followers are? What could you ask that would help you learn what your family owners really want the future to look like? What kind of question could you ask that would elicit responses that are open, honest, non-threatening and even creative?

David Cooperrider developed a systematic way of discovery he calls Appreciative Inquiry. Instead of using the conventional method of working with organizations, which is to ask diagnostic questions, such as “What’s wrong with this business?” Cooperrider focuses on what is working well.

The term Appreciative Inquiry comes from the word appreciate meaning valuing, prizing, or honoring, and the word inquire meaning discovery, search, or systematic exploration. Cooperrider also ascertains that the people inside the organization are the ones who really understand what needs to happen for it to be at its very best. In order to learn that, he simply asks: “If you had three wishes for the organization, what would they be?” This question is useful in all organizations, but I have found it to be particularly powerful in family businesses.

Last month I made a presentation at the Inland Press Association’s Family Owners & Next Generation Leadership Conference in Chicago about different leadership models for family businesses. The Inland Press Association is comprised of approximately 1200 newspapers that reach nearly 20 million U.S. homes. Many of those newspapers have been family owned and operated for several generations, and at least one is in its 6th generation of leadership. When these newspaper owners are gathered in one room there is an incredible energy created by their passion for what they do and a synergy that is as exciting as it is supportive.

From Appreciative Inquiry I asked the nearly forty family owners present: “If you had three wishes for your family business leaders—family as well as non-family—what would they be?” Their answers were most revealing.

This group had some philosophical wishes for their leaders because most of them see journalism as a true calling. Media Ethics authority, Kenneth Harwood writes: “Journalism, as a calling, asks for a moral dimension, professional skills, and professional aims. Similar to the biblical wedding feast, many are called, but few are chosen.”  The members of the Inland Press Association feel the awesome responsibility of being part of the American press, or “the watchdog of democracy.” In this group, where journalists are held to extremely high standards, those who lead journalists must be held to even higher standards. So it is not surprising that they wished their leaders would continue to make “journalistic endeavors” explaining, “Public trust can make a significant difference in our communities if we excel.”

The group also specifically wished their leaders would be “servant-leaders” in the style of Robert K. Greenleaf, who believed leaders should serve first and then lead. They also wished for their leaders to develop strong future servant-leaders, for their leaders to have confidence in the transition from one generation to the next, and to embrace change.

The family owners said they wished their leaders would establish a clear vision for the direction of the company. The wish most often made was that their leaders would communicate more. This group wanted to hear more from their leaders as well as for their leaders to hear more from them. They wanted to be listened to, and most importantly, to be heard.

One respected and revered leader of a major newspaper family, who was attending this conference with three generations of his family present, acknowledged that he had heard how many times better communication was wished for. He promised his family members in front of the entire group that he would be more forthcoming about what was on his mind as well as his plans for the future.

Once again I witnessed the power of the simple innocuous question: “If you had three wishes, what would they be?” Whether you are a family leader or a non-family leader, whether you are in the newspaper industry or the nutrition business, it might be time to ask that question and then to really listen.

The Impact of Emotional Issues on Family Businesses

Carol Ryan
Carol Ryan

As a family business consultant who has a background as a family therapist, I often reflect on the profound impact of emotional issues on family business functioning.   

For example, I have always thought that from a developmental perspective it’s a bit wrong to grow up in a family, live with a family and then go work with your family. I say that not because I don’t believe in family businesses (I do!), but rather because it’s very difficult to become an individual AND to hold your own inside of your family system. And this can be made even more difficult by working with your family every day and maybe getting a bit “stuck” in your family role.

Developmentally, you need some kind of break, you need to spread your wings, go out in the world, work for someone else, make your own way and gather your self esteem from what you accomplish for yourself using your own brains, charm, personality, skills etc. This is certainly some of the reason that best practices suggest children work outside the business for three to five years before deciding to join the business.

When you move right into the family business sometimes you are locked into your role in the family, you are locked in by yourself, your parents, your sisters, brothers, cousins etc. and you probably do the same thing to them!

Some of you might find your ‘assigned family role’ is positive.  Maybe you are the one everyone thinks of as the leader so you get to continue with this role. But what if you are the troublesome black sheep?

How do you get past that and not continue to be labeled by your family?

In my case, I laugh about how at 52 years old my family still thinks of me as “the kid who constantly gets in car wrecks”….they used to call me Crash.

When I was talking about the car I recently purchased with my family members, the first thing out of everyone’s mouth was have you wrecked it yet?

Funny thing, I haven’t wrecked a car or gotten a speeding ticket for more than twenty years! But old labels take a long time to die – and apparently, some never really do…!

And on one hand it’s okay, as long as you still can stand up to people and forge ahead being who you are and not just becoming the person that everyone expects you to be. I promise you, I will not be having any car wrecks just to make my family happy or right!

People do change, we have to stand up and hold firm in our families and not cave to our “role” if it no longer suits us.

And even if you were always thought of as the leader that is not always such a great label either. Because when do you get a chance to NOT be that person? Leaders can really disappoint people when they don’t do what others expect, and the expectations are high – that is a heavy burden to carry.

I feel like all of us who are involved in the world of family businesses need to remember that these issues around family are always there and can be the most complicated, the most embedded, the most deeply internalized.

The emotional issues are difficult to deal with, but when you do, when as a family we start to respect who each member is, as part of a group AND as an individual, it opens up communication, it frees us from ourselves and our own internalized beliefs about who people think we are and it really makes us happier people. I believe that, and I have seen this truth in action countless times.

 In addition, once we can be authentic, mature individuals who have a perspective based on our individual experiences, as well as our family experiences, our contribution to the business can be even greater.

There is nothing more liberating than knowing who you are and letting your family see that, and then finding out that the reality is they accept us….because down deep families want the best for each other and more than likely, just want you to be happy.

Forgiveness is a selfish act

Drew Mendoza

I don’t know who first coined the expression but it rings true for me.

In my work with enterprising families I am astounded at the frequency with which past hurts have a tendency to continue to have a seat at the family table; sometimes long after the people involved are deceased .  Maybe it is because family firms tend to have great institutional memories.   Whatever the reason, forgiveness can be elusive in family firms.  And, more often than not, the thing that got in the way – the thoughtless act, the poor judgment, the words that can never be taken back – was probably not the root cause, just the straw.  The complexities and paradoxes inherent in multi-generational family business certainly explain the presence of the hurts.

And, sometimes it’s not a she, him or them we will not forgive.  Sometimes, and this I do see more often in founding entrepreneurs, it is ourselves.  Imagine this scenario:  An entrepreneur in the winter of her life.  She built a company from nothing that today feeds, clothes and insures almost a thousand employees and their families.  They have stopped outside competitors in their tracks from entering their markets.  Members of the community speak often of her generosity and what a great company it is to work for.  And yet – this same entrepreneur breaks down to tears because she listened to the wrong attorney and made an irrevocable gift of stock to someone she now wishes she hadn’t.  And, as a result, she has saddled the next generation, her children, with an owner who for all intents and purposes, should not have a seat at the table.  “I’ve spent my life to build this company and with that one stroke of the pen – I ruined everything!”

In 2005 the Journal of Personality reported research that demonstrated that those that forgive have an increase in cognitive flexibility, overall life satisfaction, positive emotions, and measurable decreases in anger, anxiety and depression.   The authors write that forgiveness increases self-esteem in the forgiver, personal hope, lifts the weight of psychological depression and reduces anxiety. 

Entrepreneurs are usually as hard on themselves as they are on others and, when it comes to self-forgiveness, I find them to be hardest of all which is ironic because business-owning families are, as a general rule, generous and forgiving; sometimes to a fault.

Speaking for myself, when I’m able to get over a personal hurt by forgiving the offending party – or forgiving myself for some stupidity, my back feels better.  The more upset I am, the more likely my back is going to go out. 

The funny thing about this particular blog posting?  A few days ago my 19 year old daughter came home with a tattoo on her shoulder:  Memento te esse morte (Remember, you are mortal).  I’m not sure how she managed to get to the tattoo parlor (she never has gas money let alone tattoo money).  Talk about irony!