Category Archives: Uncategorized

What’s The Best Way To Say Goodbye?

JoAnne Norton
JoAnne Norton

Barbara Walters was one of my earliest childhood heroes. I remember watching her on our first black-and-white television set very early in the mornings, the only woman in a large cast of men. I cheered when she became the first female anchor on an evening news program, though ultimately that did not turn out well for her, and I was absolutely delighted when she created “The View” featuring strong, articulate, funny women.

Like millions of viewers, I’ve watched her retirement process over a number of years as she slowly cut back the number of hours she worked and the programs she did. Last week, I saw her final regular appearance on “The View,” which featured much fanfare as everyone from heads of state to international celebrities paid homage to Walters, who has changed our world in so many significant ways.

Saying goodbye and thank you to people who have had a profound affect on us is crucial for them and for us because the impact has ramifications on those who are leaving as well as those who are left. Nowhere is this as important as in a family business. When the family leader of a family business retires there most likely will not be appearances from celebrities nor buildings named in their honor, but it is vital that they have a proper send off.

When I began studying Murray Bowen’s Family Systems Theory at the Georgetown Family Center in the late 90s, psychologist Dr. Polly Caskie presented research suggesting that the future health of the retiring leader and the family itself was dependent on the celebration at the end of the career. For that reason, Polly said there should be presentations made from representatives of three specific groups: the business, the community, and the family. Leaders, like all of us, needed to know that their lives mattered, that their many sacrifices had been worth it, that they had made the world a better place, and that their family, especially the spouse and children, appreciated them. She hypothesized that the time, energy, and expense would be more than worth it to the future health and happiness of the retiree.

What reminded me of Polly’s sage advice after so many years was something Barbara Walters said on Friday, May 16th, on “Good Morning America.” She commented that she had remained dry-eyed as she had listened to all of the accolades from state heads and stars until she had received a message from her daughter, Jackie, who had written the night before:  “I just wanted to say I was thinking of you tonight. Tomorrow is a special day. You have impacted this world as very few can. This is a transition towards a new journey. I love you and wanted you to know how proud I am of you.” That’s when Barbara said she finally cried.

At the end of the day, no matter how big our business is, how many lives we’ve touched, how much we’ve changed the world, it is the love of our family that matters most. That’s why it is so important to say goodbye and thank you at the right time at the right place in the right way.

Next-Generation Leadership in the Family Enterprise Part 2

Steve Miller
Steve Miller

In a two-part blog post, Family Business Group consultant Stephen P. Miller highlights some key findings from his recently completed research on how nextgeneration family leaders develop leadership skills.

My research on nextgeneration family business leaders demonstrates the importance of family climate on the degree to which nextgeneration family members learn leadership skills.  Ironically, some of the leadership characteristics we often observe in entrepreneurs who build successful family firms may actually work against them in their efforts to prepare the next generation for leadership responsibilities.  The kind of hardcharging authoritative leadership style that may have helped a senior family entrepreneur overcome the significant challenges of establishing a successful family firm negatively affects the development of nextgeneration leaders.  Nextgen family leaders need age and experience appropriate opportunities to practice decision making, take risks, enjoy successes, and recover from failures.  A senior generation leader who makes all the decisions and sets all the rules can unintentionally deny nextgeneration family members the experiences they need to develop their own leadership skills.

The study further suggests that nextgeneration family members interested in playing a leadership role in the family business should consider taking responsibility for their own development of leadership skills, particularly emotional and social intelligence competencies.  If the family climate is one characterized by senior generation leaders who exercise unquestioned authority, nextgen leaders would be well served to suggest or create some area of the business for which they could be responsible and held accountable by others.  If the senior generation refuses to allow it, then the potential nextgeneration leader may be wise to seek experience with genuine responsibility and accountability outside of the family firm.  The research is abundantly clear that shouldering real responsibility is strongly related to emotional and social intelligence competencies demonstrated by the most effective leaders.

Next-Generation Leadership in the Family Enterprise Part 1

Steve Miller
Steve Miller

In a two-part blog post, Family Business Group consultant Stephen P. Miller highlights some key findings from his recently completed research on how nextgeneration family leaders develop leadership skills.

Engineering a successful generational transition is often the issue that most concerns family business entrepreneurs who hope the businesses they have created will thrive through multiple generations of family ownership.  Family firms that develop effective nextgeneration leaders often employ the following leadership development strategies:

  • Ensure next-generation leaders have job assignments with real responsibility, accountability, and risk; inside or outside the family business.  Nextgeneration leaders need opportunities to make complex decisions and experience the results of those decisions.
  • Provide accurate feedback on performance, often from trusted non-family leaders in the business.  Nextgeneration leaders benefit from knowing how others perceive their leadership practices in order to learn the emotional and social intelligence competencies that account for over 85% of top leaders’ performance.
  • Create a positive and supportive family culture.  Families that work hard to foster open communication, establish effective conflict resolution and governance processes, and create an overall positive family climate enhance the chances that nextgeneration family members will develop leadership skills.
  • Start early:  Learning leadership skills takes decades, so wise family business owners encourage nextgeneration family members to gain leadership experience in activities in which they are personally interested in school and early in their careers.

The good news is that leadership skills can be learned.  Forwardthinking family enterprise owners focus as much or more on the development of their human capital, including nextgeneration family leaders, as they do on their financial capital.

WHO Knows WHAT and WHEN – A Key to Not Hurting Feelings

Mike Fassler
Mike Fassler

A common challenge for family members in business together is communication.  How well family members are communicating impacts the family’s ability to work together effectively, a capability that is foundational to healthy families and healthy businesses.

One key to effective communication by leaders is being thoughtful and deliberate about WHO Knows WHAT and WHEN (WKWW).  Information and its flow is a powerful influence within families and businesses, and WKWW sends signals as to one’s standing.

If family or business leadership conveys important information to one or more persons at the exclusion of others of supposed ‘equal standing’, this can signal that some have favored status.  This will likely lead to anger, hurt feelings and an erosion of trust among those who feel they were slighted by not receiving the information.  Further, those who received information may start to believe they are ‘special’ and entitled to different access – making it difficult to adjust to any requests to change the flow of information going forward without escalating resentments in the system.

A few thoughts on how to reduce the risk of these problems.  First consider whether the information to be communicated is primarily a family matter, a business matter, or an ownership matter.  Then communicate within the proper venue – family matters at family meetings, business matters at management meetings, and ownership matters at board or ownership council meetings.  That way the right people will more likely received the right information at the right time.

The second thought is role clarity.  For very good reasons some family members or management team members should know certain important information exclusively or before others in the family or on the management team.  Having clearly defined roles within family and business governance will help set appropriate expectations as to the flow of information.

Finally, for important information that needs to be communicated, think through and visualize: the appropriate venue, the best person to convey the information, the sequence and the timing.  Consider who will be most impacted by the information and the magnitude of any changes that will come along once the information is conveyed.  Taking the time to visualize the roll out of the information will increase the odds that you will get the roll out right.

WHO Knows WHAT and WHEN?  Getting this right will help your family and business go a long way to not hurting others feelings, an important part of working together effectively.

The Benefits of Women Leaders in Family Firms

David Ransburg
David Ransburg

Recently, the “Management Science” journal published a research paper about the impact of female leadership on the performance of family firms. Specifically, this article — “Gender Interactions Within the Family Firm” by Amore, Garofalo, and Minichilli – examined (1) the impact of replacing a male CEO with a female CEO and (2) the impact of increasing the percentage of female directors on a company’s Board.

According to the authors, replacing a male CEO with a female CEO slightly improves a family firm’s performance, and this slight improvement is magnified when the proportion of females on a company’s Board increases as well. They caution, though, that this magnification is less pronounced when (1) the firm is larger in size and (2) when the firm is located in geographic areas characterized by gender prejudices.

The authors suggest that the significant positive impact comes from the interaction between multiple females in prominent leadership positions of the same firm.

So, for those family businesses that are smaller in size and located in geographic areas that are free of gender prejudices, keep this in mind the next time you are making a change of CEO: a female candidate might lead your company to better performance than would a male…. especially if that female CEO is supported with some female Board members.

What do you think about this research? Is it consistent with your own personal experiences?

A Fourth Generation Leader who Mastered the Art of Embracing Tradition and Change

Amy Schuman
Amy Schuman

Successful long-lived family businesses find a way to preserve their historic values and traditions while, at the same time, renewing themselves and responding to opportunities in an ever-changing world. Firms that are too rooted in the past become ossified, out-of-date, and outmoded. However, those that shun past success as irrelevant to present realities squander a treasure trove of values and accomplishments. It’s an art to combine the ‘secret sauce’ of historic success with the imperative to respond decisively and passionately to emerging opportunities and challenges.

Baird GraphicThis fine art was exemplified by John W. Baird, who passed away in December, 2013, at age 98.

Mr. Baird took over as president in 1963, following his father, Warner G. Baird, who guided the company in helping Chicago rebuild after the Great Fire of 1871. The firm was founded in 1855.

As president of Baird & Warner, Mr. Baird was deeply involved in civic affairs and the preservation of open spaces and landmarks. In the 1960’s, he was a leader in the effort to end housing discrimination in Chicago, and, as president of the then-Metropolitan Housing and Planning council, testified in favor of ‘open occupancy’, housing made available without consideration of race, ethnicity, religion, etc.

His son, Steve Baird, currently the fifth generation company president, commented, “At the time it would have been considered a very negative thing to the company because it was going against the tradition.”

However, what was ground breaking and ‘non-traditional’ at the time, now serves as a model of civic involvement and integrity for the company, the family, and the city of Chicago. And in fact, was part of the ‘secret-sauce’ that enabled this Chicago institution to survive and thrive up to this day.

There is much more to learn from the example of John W. Baird, who serves as an inspiration to others seeking success in leading their long-lived family firms. A quick web search will yield many links to articles, obituaries and tributes that are full of useful lessons – worthy of further reading and exploration.

*This article is drawn from obituaries and articles that appeared in The Chicago Sun Times, The Chicago Tribune, and online at INMAN NEWS.

The Case for Versatility

David Ransburg
David Ransburg

If you read my post earlier this week, you will see that I began to explore the keys to effective leadership in a family business, and that one of those identified keys is a deep understanding of the family business’ culture.

Effective leadership does not, of course, rely solely upon cultural understanding, and one of the most prominent features I see in effective leaders of family businesses is versatility. By “versatility,” I mean that a leader can modify his or her behavior depending on the circumstances at hand. If the situation calls for focusing on strategy, a versatile leader will be able to do so effectively… and then switch to being more operational when circumstances demand such a shift.

This support for versatility is certainly not mine alone – there’s some powerful research that supports this claim. An article from the Summer 2003 issue of the MIT Sloan Management Review reports on a research study where senior leaders were assessed in terms of their versatility as well as their organizations’ effectiveness. The correlation between versatility and effectiveness indicates that approximately 50% of what separates effective leaders from those who are not effective is versatility. In other words, while versatility is not the only factor that contributes to effective leadership, there is nothing more important. If there is only one other factor – and reason suggests that there are multiple other factors such as industry experience, functional knowledge, and cultural understanding – then at best that one other factor can only be as important as versatility. If there are multiple other factors, then this research suggests that each of them would be less important than versatility.

In your personal experience with family businesses, what do you see as other key characteristics of leadership?

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.

Distributing Personal Effects (Part 2 of 3)

Who Took Mom’s Toaster?

Chris Eckrich
Chris Eckrich

Many families experience an aging parent who does not have crises in health, but more a deterioration of health over time.  Admirably, children often provide care and companionship for aging parents.  During these times it is not uncommon for decisions to be made about downsizing where the parent lives if a current home is too much to manage.  If the parent’s mental faculties are fully engaged, the parent can provide guidance on the distribution of personal effects.  But if mental faculties are deteriorating, it is up to the child or children in charge of the situation to manage the process of distributing personal effects.  The aging process frequently has the family on edge and grieving about the loss of a cherished family patriarch or matriarch and simple actions like removing Mom’s toaster can be interpreted as inappropriately seeking benefit from a parent’s illness by other siblings who observe the situation. 

Primary family caretakers help support family harmony and functioning by bringing together the sibling group and leading the creation of a process to distribute effects as the aging parent downsizes or distributes personal items.  We see families use lottery systems, bidding systems with fake money, or just consensus building as approaches to this process.  Nothing gets removed from the house until the sibling groups agree on the process, and then the process is followed to assure fairness among all.

Generosity in spirit is sometimes seen by a sibling group when they acknowledge the special care that the primary family care provider is offering through word, deeds, and sometimes giving priority to that person in receiving items to be distributed.  Lacking an agreed upon process, sibling groups are prone to descend into childhood jealousies with predictable outcomes:  feelings of hurt, being judged and under appreciation from loved ones.  This is not a time for families to be divided.  United families gain strength in tough times.  While each family develops its own process, usually lead by a Power of Attorney or another family leader, a clear process is most beneficial.

A question for any family creating a distribution process to consider is, “Would this process bring honor to our family?”

Distributing Personal Effects (Part 1 of 3)

I Called it First!

Chris Eckrich
Chris Eckrich

Families of wealth often accumulate numerous objects of both tangible and intangible value over a lifetime.  When parents approach the later years of life they often begin downsizing or distributing personal effects.  Parents frequently value family harmony and realize that the distribution of personal effects can create anxieties and competition amongst the sibling group or grandchildren as they start to distribute belonging that they are ready to part with.   Often an item or two is passed on to a son, daughter or grandchild who has a personal attachment to the item and it is done out of love as a means of sharing something valued to a loved one.  It is especially normal for parents to be most aware of interest in items from those children who spend the most time in their home.  The child who comes over once a week has many more opportunities to clarify their interests than the child who lives overseas or across the country and may only visit once or twice a year.

Parents help their families by thinking through how the entire family may be impacted by the distribution of personal effects.  Seeking reasonable balance in financial value is important, but so too is seeking balance in sharing items that have sentimental value.  After all, these objects will become stimulators of joyful memories (hopefully) in the years to come.  Most parents at this life stage simply want to share valued items with their children and get to watch their children enjoy having or using the items while the parents are living.  Parents can avoid unexpected consequences such as family jealousies or disturbance by creating a process that they will follow in distributing personal effects and communicating the process to their children so everybody understands what is happening.  Late in life is not a good time for parents to experience their children wondering, “Am I really loved as much as my siblings?”  While sibling jealousies have to be managed by the siblings themselves, sage advice suggests a planned approach to distributing personal effects so as not to stoke fires of sibling competition and create hurt when only love and sharing were intended.