My father flew F-106 jets in the Air Force. I recall hearing numerous stories about his many near misses. There was the time the control tower didn’t see that a plane had landed the wrong way and was heading towards him as he was landing in the right direction. He also nearly had a mid-air collision over Canada with a fighter from another squadron who was being controlled by a different radar site. And, he just missed colliding with a civilian Piper Club that was flying in a restricted area after he descended through the clouds going over 300 mph.
These stories, and many more well beyond his Air Force years, focused on the importance of being aware of one’s surroundings. The value of this advice transfers beyond dramatic air maneuvers into our daily lives — whether it’s dashing across a busy street, commuting to work or participating in a family business meeting.
In any given family business meeting, family members will figuratively walk in with a collection of hats. In one meeting, you might be the spouse, parent, child or cousin. In another you’ll have that hat on in addition to being an employee, a shareholder or maybe everyone’s ultimate boss.
Taking time to reflect on who will be in the meeting, the role you and others are playing, the goal for the meeting and the impression you want to make lays a foundation for success.
In a meeting, look for information and behavioral clues so that you can be thoughtful about how or whether to ask a question, when to lean in and when to step back. Asking a difficult question or making a challenging comment in a group environment might damage a relationship, or how you are perceived. Saving it for a 1:1 dialogue will likely foster greater understanding and collaboration.
To avoid scrapes and bruises, foster positive family engagement and enhance situational awareness, families might answer questions like:
How might we respectfully respond if someone asks a question we don’t want to answer in a group?
What signal can we give others if our stress level is getting too high and we’d like to take a break on a topic?
How can we let other family members, management or advisors know whether we are speaking from a family member, employee or shareholder perspective?
What agreements might we put into place to help us not embarrass other family members in a family business meeting?
What can we do to remind ourselves to be thoughtful about who will be in the room and how we want to engage with each other?
If you have found a clever way to enhance family member situational awareness, let us know!
I’m mechanically disinclined. My dad recognized this early in my life. But he wanted me to at least understand the basics of a few mechanical functions. This inspired him to create a simple, memorable, four-word description of how a combustible engine works: pump, squeeze, pop and blow. Let me elaborate to (literally) the full extent of my abilities. Fuel is pumped into a cylinder. A piston squeezes the fuel, increasing pressure. A spark plug pops and ignites the compressed fuel. The explosion blows the piston up and blows the exhaust out. The energy created by the explosion is converted into power.
Family businesses are like combustible engines. Family members and non-family employees provide the talent and skills that make up the fuel. Goals, objectives and compensation models create pressure to succeed. Personalities and individual work styles create the sparks that can easily turn into explosions. Governance (a la family meetings, policies and processes) is the exhaust system that regulates the pressure inside the engine and generates the power.
Consider this: Without an exhaust system, a combustible engine is a bomb. And with too little pressure and too much exhaust, a combustible engine is nothing more than a lit flame — it doesn’t generate power. I would argue that without effective governance mechanisms, family meetings will suffer one of the same two fates — either an explosion of emotion and frustration or not enough energy to accomplish goals and make progress.
In my experience, good governance begins and ends with effective communication. Family meetings rely on it to manage tensions that exist between family members. One way to make progress toward excellent communication is to create rules together.
A couple in the southeastern USA had a family construction business and 10 children. The business and family grew and grew until the couple decided it was time to pass the business to the next generation. To facilitate the process, they hired me. As I interviewed family members and started to understand their strengths and weaknesses, they told me about their most recent family meeting. At a crucial point, when the family was asked to make an important decision, the eldest son became angry, yelling profanities and cursing his parents and siblings. He stormed out of the conference room door, slamming it behind him and leaving the family stunned and shaken. “We were so shocked by his behavior that none of us wanted to have another family meeting any time soon,” one sister said.
In spite of this episode, we invited the brother to attend our family business workshop. At the beginning of the meeting we turned our attention to creating rules of communication. “How can we make sure we are listening and being heard? How can we make sure these meetings are productive?” I asked. The responses were thoughtful and honest and included suggestions such as:
Be honest but respectful
Seek first to understand
Everyone has a responsibility
Set an agenda and stick to it
Set time limits set for topics and debate
Anyone can call a time out
All are equal
Everyone is included
The rules rule
Notes will be kept by the secretary
But the subject of the emotional outburst of the eldest brother had been fearfully ignored. Finally, a brave brother-in-law raised his hand and suggested: “Nobody leaves without approval.” We each held our breath but the eldest brother nodded in agreement. The rules were approved unanimously.
Two months later, we met to review the first draft of a family constitution that would serve as the foundation of the family’s governance system. The entire family was in attendance. At the beginning of the meeting, we reviewed the rules of communication and each raised a hand to signal that they agreed to follow the rules during family meetings. The meeting went very well until early in the afternoon. The topic was family compensation. Unexpectedly, a sister stood up and announced that she was tired of the meeting and hearing about her siblings “living in la la land” while she had to “struggle through every day.” She headed for the door (which, luckily, was on the other side of a large room) while the family watched her in frustrated silence.
Who came to the rescue? None other than the brave brother-in-law, brandishing the Rules of Communication as his sword of Level Headed Truth. “Jane,” he said quietly but firmly, “we all agreed to the Rules of Communication and we agreed that the rules rule. Please, for the sake of your family and for this process, stay here and work with us. We need and want your help.” Jane stopped and scowled at him before sitting down in a vacant chair near the door, purse and car keys in hand. She stayed put for the rest of the meeting, only to bolt out the door the instant it ended. Two of her sisters were able to catch up to see what was bothering her. It turned out that she and her husband were in the middle of a significant financial challenge that was causing her great stress.
Rules of communication, when created through an inclusive process and agreed to by all decision makers, can save a family meeting from falling apart and becoming a wasted, frustrating use of time and energy. They create an expectation of professionalism in an otherwise emotion-filled gathering. Without them, the frustrated, brave brother- in-law had probably said “Jane, sit down! You’ve always been a drama queen!” or something insensitive and hurtful. Do your family a favor: If you already have rules of communication, dust them off and review them prior to your next family meeting. If you don’t have them, set aside a half hour in your next meeting and create them. As a result, your meetings will be more productive and respectful and the time spent together will be more rewarding.
Business families are increasingly composed of global citizens. It is not unusual for cousins who share ownership in a business or who share other financial assets to have grown up in different countries, to have been educated in different school systems, and even to have different religions.
How then to promote alignment around policies, plans and strategies when such globalization may introduce significant geographic dispersion and cultural diversity?
Develop an intentional plan to ensure that different family members spend enough time together to understand and strive toward a common family culture.
Increase the frequency of family meetings.
Encourage cross cultural and cross demographic sharing of personal and business experiences.
Average life span has increased from 46.3 years (men) and 48.3 years (women) in 1900, to 77.4 years (men) and 82.2 years (women) in 2013.
Family members have different views on what IS family.
Nearly four-in-ten survey respondents (39%) say that marriage is obsolete; in 1978 when Time magazine posed this question to registered voters, just 28% agreed.
86% of respondents say a single parent and child constitute a family; 80% say an unmarried couple living together with a child is a family; and 63% say a gay or lesbian couple raising a child is a family.
Families LOOK different.
Rates of intermarriage have doubled since 1980.
About 50% of U.S. marriages end in divorce.
Good engagement with, and effective implementation of a family’s structures, policies and plans will be enhanced by recognizing the increased diversity that these demographic trends foretell.
Multiple active generations in the same room at the same time, multiple ethnicities and religions, and multiple views of exactly what constitutes “family” will require greater flexibility and tolerance on the part of all generations in a family.
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.
Accepting what others can and cannot give is tied to being the change agent. Strong family members accept that others are different and may not be able to give what they can give. Not everyone is a great communicator. Strong family members recognize that and check in. Brother is uncomfortable talking on the phone? Text him. Sister has trouble taking on too many tasks? Ask how you can help her. Of course we can point and say, “They should. . .” but why? Strong family members accept what others can or cannot give by adjusting their own behaviors to meet their other family members ½ (and sometimes ¾) of the way.
7) Don’t Dwell on the Past
Don’t dwell in the past, either. Stay in the present and allow your family members the same courtesy. Enough said.
8) Cheer on Other’s Success (no matter how small)
A healthy family I know sends out text messages to others in their family when something good happens. A family member I know shared his son’s success in making it to the Dean’s List his first semester of freshman year. Immediately, the brother texted his nephew saying “Great job.” This not only allowed the family member to share their success, they paid it forward by acknowledging the next generation’s success. It is a quick pat on the back. Strong family members find a reason to say to each other “Good job!”
9) Realize No One Owes Them Anything
As there is a distinct difference in feeling an obligation vs. an opportunity with the family business, so too is the belief that you have been blessed with the ability to do for yourself. Entitlement is the poison of families and businesses. No one, not even our parents, owe us a happy family business. We owe it to ourselves. It is when individuals feel fortunate to have a family business that they strive to make it better. Strong individuals focus on what they can give, instead of what they are owed.
10) Reflect and Adjust
The strongest leaders are those who reflect on their decisions and make changes. The strongest family members are those who review their behaviors towards their own family and make adjustments as needed. Did they hurt someone? Then they apologize immediately. Did they reach out to say, “How are you doing today?” Did they share in the joy of their nieces or nephews triumphs? Did they keep their mouths shut and open their ears? What did or didn’t they do, and what do they need to adjust? Strong family members reflect each day on their own behaviors and change what needs to be changed.
11) Don’t Expect Immediate Results
Strong family members understand that any relationship needs continuous attention. It is not a one-and-done kind of deal. A family I work with continually addresses the challenges they face. They realize that years of negative behaviors cannot change overnight and their family is now fixed. They look for incremental changes and face each day knowing that they are working towards something years from now in which they can look back on and smile.
Many of the families that we work with use their strong relationships as a competitive advantage for their business. The underlying trust and goodwill towards each other are distinct benefits when individuals know their family has their backs and are there for them. The workplace is a pleasant, productive environment where employees are confident in how decisions are made. However, there are also families where the relationships are a distinct disadvantage for the business. The tension between members makes the environment uncomfortable; the employees are not sure who to please or are getting direction from multiple members who disagree with each other.
Inevitably, when the relationships are troublesome, there is blame: “If I could just get my brother to stop meddling in my department;” or “She micromanages every action in her department.” I call it the “If I could just get them to…” trap. The finger pointing goes outward instead of inward. Strong families are made up of individuals who point the finger at their own nose and challenge their own behaviors.
Here are 11 behaviors that individuals from strong families do to keep their competitive advantage:
1) Don’t Waste Time Playing in the Pity Puddle
Life is full of challenges; it gets rough. Blend family and business together and it can be a tempestuous storm. Strong family members don’t waste time by thinking woe is me. They get themselves out of the Pity Puddle by focusing on their gratitude list. And they really focus on it. When I work with families who are having trouble, their homework assignment is to focus on what they are grateful about each other. And sometimes it’s hard! Strong family members don’t stay in the Pity Puddle long – they focus on gratitude list and add to it every day.
2) Laugh at Themselves and with Each Other
Strong family members realize that they are human and subject to some not-so-pleasing behaviors themselves. They fight against being defensive and are able to laugh when others point out their shortcomings. Laughter is a wonderful elixir. Laughter triggers the release of endorphins and produces a general sense of well-being. When we can laugh at ourselves, and with our family members, we can produce a shared sense of feeling good. Strong family members look at reasons to laugh at themselves and with (not at) each other.
3) See their Family through Rose-Colored Glasses
Strong family members look at their family and see the good, not the bad. We all have a choice in how we want to view the world; we all have a choice in what we see in individuals. Strong family members choose to look for the positives in their family, not dwell on the negatives. It is easy to say that your family is dysfunctional. Our own worlds are all about our perceptions of them. Strong family members tend to view their families as a source of strength and good.
4) Don’t Let Others Have Power over Them
Strong family members believe they control their own emotions. They accept that it is their choice to be bothered by someone else’s behavior. Strong family members rarely believe other’s drive them crazy. They are able to walk side by side without reacting. They check and control their emotions so they can interact instead of react.
5) Be the Change Agent
Strong family members don’t repeat negative messages about each other. They don’t keep their family stuck in the same place by waiting for someone else to change. They accept that if they keep doing what they’re doing, they are going to keep getting what they’re getting. Strong family members accept that they need to be the change that they seek in the situation. By being the change agent, and staying the course, others will be able to change, too.
Family enterprises are complex systems due in part to the overlapping roles of family, ownership and management. Effective communication in the midst of these overlapping roles is crucial to being able to work together effectively. Part of human nature is to use assumptions in an effort to simplify and make sense of complex systems. So it is natural for stakeholders in family enterprises to make assumptions as they seek to communicate with one another. It is these very assumptions that often get in the way of communication and in turn working together effectively.
An assumption is “something that is accepted as true or as certain to happen, without proof.” Assumptions have a powerful impact on communication because they can become fact in the mind’s eye, facts turn into beliefs and beliefs drive our behaviors. There is a tendency to make assumptions that are negative, cumulative and unspoken. This often results in a negative outcome of interactions with other family business stakeholders because the behavior, stemming from the assumptions, is not appropriate for the situation. At the extreme, the search for reinforcing evidence of being “right” can become the priority which can contribute to a downward spiral in trust.
For example, if a sibling partner assumes that sharing their viewpoint about their niece’s behavior and performance will be met with defensiveness by their sibling father, it is more likely that an important discussion will be delayed indefinitely. The negative outcome in this situation is that the niece is not provided with timely feedback that is important to her development as a manager and future owner.
What if the sibling partner’s assumption was changed and shared? For example, open the discussion with: “I am assuming all of us are interested in Tonia’s development as a manager and future owner, have her best interest at heart, and believe that timely feedback is important for her development and the future of our family business.” Stated agreement on the underlying assumptions helps all parties align on the purpose of what will still be a difficult conversation, yet an important one that will actually take place.
As you prepare for that next interaction with another family business stakeholder consider…
“What assumptions am I making that if fully disclosed, would more clearly communicate my intentions?”
“What assumptions am I making that if modified, might open up other possible outcomes?”
Asking the other person:
“Can you help me understand what led you to that solution?”
“Is it possible to try another approach? If so, what might be an alternate outcome?”
Working effectively with other family business stakeholders is always going to involve the making of assumptions. Being transparent with what your assumptions are and being curious about others’ will contribute to more effective communication in your family enterprise.
Accountability in a family business requires personal commitment to agreed upon behaviors and results. When you commit, you automatically make yourself vulnerable because your behaviors and/or results might not measure up. That’s why it takes courage to make commitments – you have to take some risk. How you respond when there is a gap between your commitment and what actually happens determines how others are likely to respond to the shortfall and whether or not you will have a positive influence on accountability in your family business.
So, let’s say you’ve made a commitment and you’ve fallen short. How should you respond? By voluntarily acknowledging the shortfall, you create a safe environment within which to have what are usually difficult conversations. You are not leaving another family member or non-family executive to wonder whether you are aware of the shortfall, and how to best start a conversation with you. They don’t have to — your initiative has started the conversation and your display of vulnerability created the safe environment.
Voluntary acknowledgement takes pressure off relationships. Your recognition puts others at ease and better enables them to provide input as to changes or actions to help mitigate the impact of the shortfall. Provided your family business stakeholders have shared intentions, and are pulling together in a shared direction, voluntary acknowledgement will more likely lead to support, rather than challenge.
During this conversation that you have brought to light, ask for input and ideas. Was the commitment too large? Is there additional training or skill building you need to improve upon next time? Is there someone that might shadow you on your next attempt to provide more input along the way? Asking for feedback frees others to bring resources to bear, and this will support you in future commitments.
Voluntary acknowledgement is a powerful influence on keeping accountability alive and well in your family business and a way of mounting support during difficult periods.
Consider what’s standing in the way of you trying this out.
It is that time of year where everyone is making New Year’s resolutions. I am not necessarily a big fan of resolutions primarily because too often we don’t remember them shortly after we make them! However, if we treat New Year’s resolutions with a bit more formality by writing them down and reviewing them regularly then we will have a greater likelihood of success.
My second issue with New Year’s resolutions as they relate to family business, is that they typically focus on individual outcomes like weight loss, exercising more and the like (which are all good goals of course!). However, this year rather than focusing all of your resolutions on yourself, try developing one for your family firm.
Here are a few resolution ideas to get your thoughts moving in this direction:
Practice daily gratitude towards your family members – especially the ones you find more challenging.
Identify three items in your family code of conduct that you will improve this year.
Engage the next generation in a new conversation about their role in the family business.
Go to a family business conference or course with another family member (not a spouse) this year.
Schedule a conversation with your family about what money and wealth mean in your family.
Complete your shareholder’s agreement in 2015, or at least get started on it!
Develop family employment policies for your family firm.
Schedule a conversation to talk about the pros and cons of pre-nuptial agreements or co-habitation agreements.