Tag Archives: decisions

How is as Important as What in Decision Making

Deb Houden
Deb Houden

Three siblings sat in a room discussing the details of a new shareholders agreement they wanted to create. Through a recent lawsuit with two other siblings, their current shareholder agreement, which had been put together by their father, had been helpful in defining settlement terms, but they knew it wasn’t comprehensive. The three siblings had gotten over the shock and hurt of the lawsuit, the dust had settled, and they were ready to proceed with a new shareholder agreement, but old habits had started to reemerge. They were stuck in a positional standoff. Eventually, after a year of building trust, they got to the point of having an honest and open discussion with each other regarding what they each wanted out of the shareholders agreement. They were (rightly) very proud of how far they had come.

They were also contemplating succession and their children were now employed in the business. One of the senior generation siblings suggested that since the three of them had come so far, it might be important for the next generation to sit in on the facilitated discussions regarding the shareholders agreement. They wanted the children to see that they could have tough discussions without being positional, judgmental, and/or defensive.

The meeting didn’t get very far through the parts of the agreement. There were a lot of side questions, a lot of meandering, but always came back on topic. Eventually, the three siblings went off on their own to discuss a few of the points on the shareholder’s agreement. After the siblings left, the next gen were asked what they thought of the meeting. A couple of them were confused about the lack of progress on the different points. Why was there so much discussion and meandering? Another was grateful to start hearing some of the terms that were used. He didn’t understand all of the different aspects of the agreement, so he was intrigued. And finally, the last one said he was happy to understand why they were making decisions about certain things instead of being handed a document and told “that’s how it is.”

The three siblings came back in the room and one of the next gen asked if they got anything done. One sibling answered that they got a lot done – they uncovered more questions. Two of the next gen were confused. They again said it seemed like the older generation siblings weren’t accomplishing anything. But the eldest sibling was excited. He told the next gen they accomplished so much more than just the points of the agreement. They gained trust and understanding and were enjoying the new found teamwork around the important document. They had come so far in their communication and were now enjoying solving tough problems together.

It was such an important illustration of how much the process matters when making decisions among family members. The next generation began to understand how to work together as future shareholders. It is incredibly important to teach the next generation many things, but most importantly, how to be a good partner. Next time you’re having an important discussion among the shareholders, keep these following points in mind:

  • Understand the process of making decisions is as important, and sometimes more, than the end product.
  • Exemplify what good communication and decision making can be for the next generation – they’re watching you.
  • Don’t hide difficult situations and conversations from the next generation.
  • Understand that the next generation wants to know WHY you made the decision you did.
  • Introduce terms that may be foreign, confusing, or misunderstood.
  • Don’t be afraid to veer off-topic for the sake of understanding. Just remember to come back to topic again.

Good decision making is so much more than good decisions.

Decisions, Decisions….

Stephanie Brun de Pontet
Stephanie Brun de Pontet

As we watch decision-makers around the world struggle with the difficult choices and trade-offs of how to respond to the crisis in Syria – I am reminded again that leadership is very, very hard.

When you lead a business, a family or any organization you often have to make decisions without all the facts you want to have, knowing there will be some ‘winners’ and ‘losers’ as a consequence of your choice, and as a result, there will always be some who disagree with your decision.

In a family business, leaders may particularly struggle to make the hard choices because they worry about unintended consequences and the collateral damage in some of their closest relationships.  The overlap of family and business can make it very hard to remain objective, when objectivity is so very important.

If you aspire to leadership roles in your family’s business, make sure you are up to the task of making the hard choices.  Remember that when important issues are involved, there are very few ‘black and white’ answers – and it is tough to be the one who has to make the call.

GROUPTHINK: Leads to poor decision-making.

Kent Rhodes
Kent Rhodes

I’ve been talking about how people make sense of the world and sometimes, as a result, align themselves with other people holding similar views. While this is simply a natural aspect of human relationships, in family businesses, this dynamic can either serve the family and its enterprise in some lasting and meaningful ways or can create rifts between family groups when views are driven by groupthink. This is important in family businesses because groupthink can occur within families as each family member defers to what they think another family member wants.

Bob was the founder of his family’s successful nursery and gardening business. His two sons had grown up in the business and now managed all operations involved in the enterprise. Bob didn’t talk much about retiring and loved coming to work everyday, but he had been increasingly thinking about retiring and the plan he had made with Sally, his wife, included that he would have stepped away from the day to day business to travel, spend more time with the grandchildren and friends. But that plan was five years past due.

Based on a couple of off-handed remarks the boys had made about around the lines of “we couldn’t do this without you, Dad”, Bob had developed the idea that his sons would not be happy if he wasn’t in the office. The boys, on the other hand, were concerned about helping their dad feel valued and needed. Even though they had the entire organization well under their control and they actually wanted him to enjoy a well deserved retirement.

Hence, no one actually examined the assumptions each were making about the other or bothered to be honest about their thinking because they were deferring to what they each thought to be the other’s wishes. Bob and his sons have been participants in groupthink.

Groupthink occurs when individuals make decisions by going along with what they think others want to do without sharing differences of opinion, vetting other options, or exploring alternative outcomes. It creates a group mindset that is based on a limited view of important issues combined with a low commitment to bring in as much available information as possible. This leads to poor decision-making and can breed an environment ripe for misunderstanding and conflict.

In a family business, the fact that differences are not talked about opens the door to misunderstanding of individual goals and wishes and can escalate conflict between people by leaving individual assumptions about those differences in those individual goals and wishes unchallenged and left to become “well-known-facts”.

Are you Providing Decision Making Opportunities to the Next Generation?

Kelly LeCouvie
Kelly LeCouvie

Junior generation family members sometimes tell us that they believe no decision-making authority will come to them before senior generation family members either exit the business or die. And in some cases, they’re right. That is somewhat discouraging, and also a deterrent for next generation engagement.

We have found that decisions are difficult for the next generation to manage when their “transition” goes from making no decisions to making all decisions.

Why not provide the next generation with opportunities to make decisions (either related to the business or the family) before you make your exit? You might not want to start with key strategic decisions, or life-altering decisions on behalf of the family, but there are many options. Here are some examples:

  • Planning the next family meeting (location, social time, draft agenda);
  • Making a hiring decision without your stamp of approval;
  • Designing a family website or newsletter;
  • Selecting his own mentor in the business;
  • Choosing recipients of philanthropic donations;
  • Setting up a pilot project for a new product or service;
  • Identifying development workshops/conferences that are most appropriate for her generation;
  • Make some investment decisions with other members of the junior generation with a fixed sum of money;

There are many opportunities to build confidence and establish credibility among the next generation through increased decision-making. What decisions can you identify in your family that might engage them, while developing decision-making competence?

Creating Group Norms

Jennifer Pendergast
Jennifer Pendergast

The decision making structure of a family business can be very complicated. Decisions are often made at the family level, the board level and the business level.  Most decision- making groups spend their time focusing on the decisions that needs to be made, but don’t spend much time thinking about the process of decision making. Yet focusing on how you do the work can be an important element of a successful result.  Think about a group that you are part of in your family business – perhaps organizing a family meeting, as part of the family business board, or as part of a management team.  Has your group ever stopped to discuss the norms or rules for how the group works together?  In most cases these norms or rules are assumed but not written down.  And, in many cases, groups may not agree on norms or may not be happy with the norms currently being followed. 

Some norms to consider include – how will we capture the decisions from our meetings, who is responsible for setting the meeting agenda, how do other team members provide input to the agenda, how will we communicate with each other between meetings (e.g., via email cc’d to all members?), how and with whom will we share information outside of the team, who may be invited to attend group meetings outside of the immediate group, what is the process for adding members to the group, or asking members to leave, etc.  Taking a break from decision making to work on the process of making decisions can be very beneficial from the group – with improvements in speed and quality of decision making as a result.