Tag Archives: Eckrich

What’s in a Name?

Chris Eckrich
Chris Eckrich

Last week an Associated Press article (Family Battle Brews Over Trademark by Alan Scher Zagier) reported on the legal challenge over the use of a family name in a trademark dispute.  The passion over the use of one’s last name and image is something that many business owning families know very much about.

Family businesses spend inordinate amounts of time and energy building reputations in their businesses.  Quality products and services are part of reputation building, but a family’s reputation as competent professionals and owners with integrity also contribute to perceptions by those in the business and local communities.  The deeper the values run, even if unspoken, the greater the passion that fuels the drive to build and protect reputations.

For younger generation family members, the drives to behave “properly” and bring honor to the family name are often interpreted as over-control by a senior generation consumed with external perceptions rather than behaving authentically.  While this may be happening in a small percentage of cases, overwhelmingly experiences have shown that a deep and powerful family history and story lies at the root of family leaders’ desires to expect (and sometimes demand) behavior appropriate for the family’s name.  Sharing that powerful story among all generations can reveal the deeper meaning behind the family’s high expectations, and create a sense of pride among the family’s younger members.  The family can then unite in protecting their common heritage once the back story gets on the table.  Lacking the back story, the power of the family’s history is diminished and the family is left with interpersonal conflict.

As for the trademark dispute referenced above, we hope the participants find a win-win solution that honors and protects their shared family name.

[Family Battle Brews Over Trademark by Alan Scher Zagier, published March 14, 2014 in The Journal Gazette, Fort Wayne, IN, page 10B.]

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Trouble in the Corner Office?

Chris Eckrich
Chris Eckrich

A recent Wall Street Journal article (At Family Firms, Do CEO’s Work Fewer Hours? by Rachel Feintzeig, Wall Street Journal Online, March 5th, 2014) referenced new research by professors at Harvard, London School of Economics and Columbia that measured family firm CEO’s as working approximately 8% fewer hours than their non family counterparts.  Is this an indication of impending underperformance?

Vibrant family businesses are often run by CEO’s who have mastered the art of working on the business rather than in the business.  They may work intensely during much of the year but also find ways to create time for thoughtful reflection on their businesses and are constantly discovering ways to improve not just today’s bottom line, but future opportunities as well.  Their insights are as likely to emerge at 5:30 a.m or 9:00 p.m., and not just during office hours.

Signs of a vibrant family business include:

  • Clear and aligned strategic direction from the ownership group, to the board to the CEO and management team;
  • A culture of high performance in which problems do not fester unattended;
  • An engaged workforce in which each individual understands how he or she contributes to the company’s objectives, and has the resources necessary to meet assigned goals;
  • Mutual trust between ownership, the board, the CEO and the management team;
  • A dynamic and iterative succession/continuity planning process in which the CEO and the family ownership group are actively engaged in achieving generational transition (assuming they have agreed on doing so); and,
  • A constant drive to meet or exceed ownership’s clearly stated objectives (which may include both financial or non financial measures).

Signs of a family business whose future may be troubled include:

  • Owners, directors or executives who are not sure where the company is headed;
  • Acceptance of correctable company problems and weaknesses as just the way things are;
  • Managers or employees who do not have clarity on their work priorities or goals;
  • Distrust between the ownership group, board and/or CEO;
  • The inability to discuss or make progress on succession and continuity challenges;
  • Little effort to clarify what ownership’s objectives are or limited drive to achieve those goals.

CEO’s spending their time driving towards becoming or remaining a vibrant family enterprise position their businesses for future success while CEO’s who lack that drive will generally allow trouble spots to creep into the picture.  Regarding time spent at work, perhaps the best question to determine whether there is trouble in the corner office is, “What are you doing with your time?”

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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.

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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?”

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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.

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What are Your Family’s Rules for Fighting

Chris Eckrich
Chris Eckrich

All families have rules for fighting, but very few families make them explicit.  Even worse many families have highly unproductive rules for fighting that leave heavy blast zones and bullet ridden bodies littered on the ground.  For business owning families serious about working together effectively, the unwritten and unspoken need to be made explicit and the family needs to craft and agree on methods of conflict resolution that will allow continuous learning and successful resolution of the issues causing tension.

Some common approaches include:

  • We speak for ourselves and do not blame others for our behavior or emotional reactions.
  • We own our individual emotional reactions and practice managing our hot buttons and triggers.
  • We seek to understand rather than rush to judgment.
  • We put one issue on the table at a time and make a list of new or unrelated issues that emerge during the discussion, coming back to them when there is time.
  • We state our goals in working with each other before we jump into conflict mode.
  • We behave as though there are cameras in the room and the videotape will be shown to future generations to judge how effective we were in caring for each other and resolving issues.

Ownership groups that agree on how they will address conflict and then put it into practice will benefit from strong alignment on how they handle sensitive issues.

How effective is your family’s plan for dealing with conflict?

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Protecting Family Traditions

Chris Eckrich
Chris Eckrich

Business owning families know about hard work and dedication.  It is not unusual to spend 50-70 hours a week at work only to come home and talk shop with loved ones.  Many families report that business discussions end up eating into their personal time so much that they miss the opportunity to just be family.  While we frequently encouraged boundaries to be drawn on activities, there is one place in which business discussion absolutely does not belong at the table and that is during important family traditions.

Traditions are a way that the family honors itself and future generations by gathering to celebrate an important aspect of the family.  A July 4th celebration might signify the family’s deep appreciation for freedom.  A Christmas or Hanukah celebration might represent the family’s deep beliefs in their faith.  A tradition of an annual family vacation might represent the family’s commitment to nurture itself over time.  These activities are to be revered in the family and should be protected as an inclusive activity for all family members, regardless of whether one works in the business.  Business dialogue during these sacred activities deteriorates inclusiveness and creates in and out groups.

Sure, evening dinners and weekend get-togethers might include some business discussion, but a family’s most treasured time together is a time to turn off the shoptalk.  Today is a good time to ask, “Are we honoring our family in our rituals and traditions or are we merely paying lip service to family and really just honoring the business?”

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A Time to Give Thanks

Chris Eckrich

November 22nd is a major holiday in the United States, when all pause to give thanks for the blessings in their lives.  What a great opportunity to thank our shareholders for patience, our executives for leadership, our parents for doing their best, our children for having the courage to carve their own paths in life, and our families for making life interesting and dealing with all of our idiosyncrasies. 

The day is almost here.  Who do you need to give thanks to that you have perhaps taken for granted for too long?  Time to pick up the phone!

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Lessons from the U.S. Election

Chris Eckrich

Last week’s Presidential election in the United States was a great lesson on the need to have clarity about how decisions are made and what the framework is for implementing those decisions. 

Many family businesses have created their own guidelines and rules for how leadership might transition from one leader to the next.  Absent some understanding of the decision making framework, passions arise and frequently disagreement result in a divided ownership group.

One thing we learned from last week’s election was that there most certainly will be passion when choosing leaders, but agreeing on a constitutional framework allows everybody to get a good night’s sleep, wake up and function the next day.  Such is true in family businesses, and therefore we generally support the implementation of policies, procedures, and even full constitutions for families who seek to keep their enterprising families together for the long run.

Do you have clarity on how transition will work in your family?

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Setting a Date

Chris Eckrich

In reflecting further about this month’s Family Business Advisor article entitled, “Must the Prince Kill the King?” by Albert Jan Thomassen, I am struck by how easy it sounds to have the senior leader “set a date” for the final transition of leadership to the upcoming leader, and how very difficult it is for so many.  Visions of total disconnection from the business certainly will produce anxiety for many senior leaders, and retrenchment is not uncommon.

A leadership transition is spread out over time (sometimes decades), as upcoming leaders cut their teeth and assume greater responsibility.  Often a time period occurs when both upcoming and current leaders are capable of doing a great job.  A discussion to set a date at that time is likely to cause frustration to both sides.

We see healthy senior/junior generation leaders build clear role descriptions, and then lay out a timeline for when a particular role is passed from one leader to the next.  This allows both to see that the transition will take place over time, and may reduce the anxiety that both would otherwise feel about the pace of progress when it is left undefined.  It also allows the junior leader to plan for the assumption of greater responsibility and authority, acquiring the experience needed to succeed in each newly acquired role.  This clarity also allows both senior and junior leader to see the differences between the senior leader’s management roles, and ownership roles.  [Note that typically management responsibilities and authorities are transitioned before ownership responsibilities and authorities.]

Setting a series of dates for transitioning roles will often create more progress than worrying about the final date of all authority transfer.  In fact, if Thomassen’s recommendations are headed and the two leaders support and respect each other, the working relationship between the two leaders may be such that the final date becomes more of a celebration than a power shift.  The power would have already been transferred by then.

Read the September issue of The Family Business Advisor.  Click Here.

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