Below are a few of the questions that were posed during our Coaching the Next Generation webinar. If you missed the webinar you are still in luck. The replay of this program is available at http://eventcallregistration.com/reg/index.jsp?cid=600t11pk
How would the speakers apply coaching for the senior family member who is thinking about passing the business to the next generation but is not sure what they would do if they don’t come to work each day for the next 30-40 years?
In applying coaching to senior family members who may retire, it is critical that they have something else of meaning upon which to focus. Moreover, it is critical that they are recognised for the valuable contribution they have made to the business so they feel valued. Ask them what they want to leave behind, how they would like to be remembered, ask them to share their lessons learned and perhaps operate as a mentor to younger generations. Provide some training on mentoring so that both parties understand what is expected of them. And do draft clear guidelines around their continued interaction with the business. What will they continue to contribute, what will they stop doing? And document this. Provide support to senior family members in helping them to build their “third career”. Support them in finding non-executive directorships elsewhere, contribute to charity work, start a new business. You could perhaps establish a Development Advisory Group comprised of family and non-family members who take responsibility for retiring family executives. There is a course offered by Harvard for married couples who are facing retirement. Together, partners can learn how to live meaningfully together in their latter years and build a life of equal meaning. Perhaps this is an opportunity to pursue new learning opportunities? http://www.hilr.harvard.edu/who/
In our family none of the five children or spouses have expressed any interest at all in the family business. They will undoubtedly reap some benefits from the business. But it is a shame for them to view it as just a “cash cow” with no contribution expected on their part. It is wonderful for everything to be unconditional but let’s face it the business world is largely made up of trade-offs. Isn’t a sense of “giving back” necessary in order to avoid a sense of entitlement?
The business world is invariably made up of “trade-offs”. How easily can we sit with the fact that many benefit from the family business, exert enormous influence on the children, reap the benefits but have no interest at all in the family business? I think the answer lies in accepting that whilst one may not have an interest in the family business, there is no doubt that mothers in particular, play a pivotal role in raising responsible children. I am working with a family at the moment who is actively engaged in bringing mothers, daughters in law, sons in law, into the fold. It is NEVER too late. Perhaps they have not been asked to get involved and don’t know how they could make a meaningful contribution. This starts with asking: their views on the family business, why or why they don’t want to be involved and finding them a role of meaning where they can make a contribution. This may take the form of contributing to the development of a family protocol, leading a social committee for the family, involving them in sharing their own family of origin stories, playing a role in educating the next generation. I am sure they have many skills to bring and often play the Chief Emotional Officer role in a family. Perhaps one might begin by asking them how they have experienced the family into which they married, how the family might integrate outsiders more effectively in the future? Values and behaviours the family should seek to develop in order to do so? Offer this opportunity to them, but do make it voluntary. You cannot force someone to contribute where they may not want to. Play with those who want to play.
I recommend viewing ownership as a job. That means you need to qualify for ownership through the duties involved (such as informing yourself of how the business is doing, reading annual reports, reading the financial statements, understanding the family’s dividend policy and reinvestment philosophy, understanding family values, going to the AGMs and other family meetings, being an ambassador for the company in the community among other things) and certainly, there are benefits (such as dividends, reputation, social status and so forth). Sadly, uninterested and uninvolved owners who view the business as no more than a “cash cow” can be a source of potential future conflicts due to misaligned expectations, so finding out how they can be interested and involved is a very important undertaking. However, all of this doesn’t just happen by itself. So-called responsible ownership is an attitude that the family needs to embrace, foster and work on, and is the result of hard labour by committed family members whose aim it is to have a united family ownership base that can really contribute and add value to the business through their values and vision. That is a key task of family governance work. Very importantly, this kind of work can be fun! Using your imagination and the resources in the family and business, building commitment and understanding through education can be very rewarding. Work with family business facilitators who can help you achieve this.
To read about a family business that went through building commitment, see Scott Family Enterprises parts A-C (Kellogg Case written by Canh Tran & John Ward). To read more about Responsible Ownership, see “How to be an effective shareholder” by Craig Aronoff & John Ward. We’ve done research at London Business School about how to foster “Emotional Ownership” in the next generation, you can find a copy on http://www.ifb.org.uk/media/24482/emotional%20ownership%20report%20final2.pdf
Do family business members have a responsibility to make a “stamp” on the business. Can you comment please?
Of course they do. They own the business and must take their responsibilities as seriously as their rights. However, the secret lies in defining responsible ownership together with the family as a whole. What are the behaviours a responsible owner should demonstrate, how can their success/performance be measured and managed? How does this sense of responsibility become engrained in future generations? And equally importantly, what are the boundaries of making one’s stamp but perhaps interfering with the day to day running of the business is a Board is in place to provide this role? Putting one’s stamp on the business is important…but the nature of this “stamp” must be clearly articulated and managed through a Family Council. Consistency in “stamp-making” is critically important so as not to confuse or undermine the business. Finally, I would add, find out what each member’s unique stamp could be? What are their skills and capabilities, what can we expect from them. We often don’t know what their unique stamp can be as we take for granted we know our family members and their unique experiences. I’m working with a family now who has worked together for years. They want to work on more key business projects together. Despite their careers in many sectors, no one has asked them about their background, experiences and aspirations. This must be done before a positive “stamp” can be made. Be structured about this and co-define together what responsible ownership really is.
One fundamental way owning family members make a “stamp” on the business is mainly through articulating family values and an associated family vision that act as guiding principles for the board in their formulation and execution of strategy. I think the key question to ask yourself here is – why is this company better off owned by this family? Then – why do we want to continue co-owning this enterprise? The answer to the latter question can vary very widely – people may look at the financial rewards, the social togetherness in the family, provision of jobs, giving back to the community etc. Whatever the answer is, the owners from a given generation will shape their contribution as they see fit, bearing in mind the traditions of the original founders but also being aware of how to change as times are changing. As one family business worded it in their vision: “Making change our tradition”. So really the reason why family owners have the responsibility to create their own stamp is to perpetuate the existence of the enterprise. If, indeed, that is what the family wants.
Where or how do you find coaches?
There are many good coaching organisations in the world. You want to ensure that your coaches are sufficiently experienced. Look for organisations with global reach, ongoing professional development, those who offer a choice of coach. You can try:
www.praesta.com (not that focused on families)
Business Schools should also be able to recommend good coaches.
Another way to find a coach is to ask those who may have used them. (both within the family business realm and outside it…eg. Corporate America!) Personal recommendations are best so do ask a friend!