All posts by Amy M. Schuman

Just Like Her Dad, part 2

Amy Schuman
Amy Schuman

Earlier this week we presented the case of ‘Jennifer’, who joined the family business two years ago. The COO reported that the executive team was excited about Jennifer because she was “Just Like Her Dad”. We posed the question to you: Is this a good thing or a bad thing?

Well, let’s take a closer look. What are the upsides of Jennifer being Just Like Dad?

   *Dad’s approach is proven – why fix something that isn’t broken?

   *Dad’s approach is familiar – the entire organization, as well as customers and suppliers, are already comfortable with this leadership style.  Continuing in this vein will be minimally disruptive and comforting to the larger organization.

   * Values and legacy – a great source of pride and competitive advantage – will be preserved into the next generation.

Can we list any downsides of Jennifer being Just Like Dad?

  *If Jennifer assumes she is being invited to act with the same authority as her dad, she is headed for trouble.   Making pronouncements (like Dad) or taking special privileges (like Dad) without clearly earning the right to do so, will surely lead to trouble.

  *Jennifer is a unique individual with her own talents and abilities. Rather than aspiring to be a clone of dad, she should pursue her own leadership style and let her own light shine forth.

  *Unlike Dad, who always operated as a sole entrepreneur, Jennifer is accountable to a large cast of characters. The ownership group is now larger, and multi-generational. The organization is more far flung with an ever-expanding group of stakeholders. Jennifer’s role as leader will require more consensus building and communication, and calls for a whole constellation of skills and efforts that were not required of the founder.

We are clearly looking at a paradox – two desirable approaches that appear to be in conflict.  Our analysis tells us we need a both/and approach. How can Jennifer be ‘Just Like Her Dad,’ and, at the same time, be her own person?

Stay tuned for Part 3 of this exploration – and if you have any further thoughts about this dilemma, we’d love to hear from you!

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Just Like Her Dad, part 1

Amy Schuman
Amy Schuman

Recently, the COO of a large family business told me that he was really excited about the daughter of the current CEO who had just celebrated her second anniversary with the company. The daughter, who we’ll call Jennifer, had followed the family employment policy to the letter and was now moving through the organization in several key learning positions.

“She’s just like her Dad”, the executive happily reported, with clear relief.

Later in the day, I found myself pondering that remark. Is it best for the family business when the next family leader is ‘just like’ the one that came before? Or is it better for the next generation leader to take a different approach?

Also – what is best for this young woman? Should she model herself after her father, the successful founder of a company with global reach, supporting thousands of employees on several continents? His approach clearly was successful, why would she do anything different? Is her main task to study her father closely, and dedicate herself to perpetuating his proven leadership style, or should she follow the beat of her own drum?

I would love to hear your thoughts on this question – and we’ll take this discussion further in a post later this week. What’s been your experience – do you look for someone just like the current leader, or someone very different – why?

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The Paradox of Fixed and Flexible: How to be More Like a Palm Tree

In my last posting I talked about the advantages of being both fixed and flexible and promised a few specific examples. 

Let’s start by taking nature as our role model in this regard – trees that are both strong, deeply rooted, clearly bounded, and yet flexible enough to withstand high winds and driving rains. Imagine a palm tree bending and swaying in even the most chaotic weather conditions.  How can we create family businesses with that wonderful combination of strength and suppleness?

 

  • Build in regular opportunities for reviewing and updating family policies, structures and agreements. Don’t’ assume that the current approach will be the best forever. As time goes on, you will learn what works and doesn’t work – expect that things will change as time goes on. Some families even build in sunset provisions for agreements that force the family to get together and either affirm or alter existing policies.
  • Learn more about Fair Process. As described by Ward and Carlock in their Parallel Planning book, Fair Process requires both consistency and changeability. Families that find ways to honor both of these characteristics create approaches that all recognize as fair.
  • For family involvement and employment policies, plan to provide more flexibility for younger children (pre-college age) and more fixed rules for older children (post-college). Within the policies, some aspects are mandatory (we require all family applicants to complete a college degree) and some are flexible (we encourage family applicants to complete at least one summer internship while they are in high school or college).

There are many more examples of approaches that are both fixed and flexible. Perhaps in a future blog we should provide unfortunate examples of families going too far to one side or the other – being either too rigid or too loose.  We’d love to hear about any examples from your experience….

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Paradoxes found in the Jewish New Year parallel many Family Businesses Paradoxes

Amy Schuman
Amy Schuman

Starting at sundown last Wednesday night, Jews across the globe ushered in a New Year, specifically the year 5772. It struck me again this year, how many tensions and contradictions are found in the traditions surrounding the holiday. These paradoxes echo many of those familiar to family businesses and quite a few that are described in Family Business as Paradox which I co-authored last year with John Ward and Stacy Stutz.  

For example, as we contemplate the yet-undiscovered possibilities of a brand new year, we are brought up short by a major theme of the New Year’s service: Teshuvah  or ‘return’. How is it that a new year begins with a ‘return’?  Upon reflection we realize that meaningful new efforts are rooted in the legacy of the past. They are shaped by the treasured values and lessons learned by those that came before us.

This tension is a major theme for family businesses that must find ways to honor both tradition and change.  My co-authors and I have been inspired by many family enterprises that grapple with this paradox, notably Beretta and   Cargill.

There are other paradoxes with resonance for family enterprise – for example, the tension between structure/rules and spontaneity/intention*. As with all religious observance, there are plenty of rules related to the holiday, and proper observance is spelled out well in advance. However the tradition also makes clear that observing the law alone is not enough – one must observe with an intention that embodies trust and respect, and that resonates with caring, even passion.

Family enterprises also wrestle with a similar tension.  Policies and rules are essential– for family employment, for compensation, for ownership. However, they can’t stand alone. They have to be partnered with the right intention – the right relationship.  And they are best when infused with real commitment and passion. Although it may seem impossible, families must find a way to approach policies and practices in ways that are both fixed and flexible.

I’ll share some real world examples in an upcoming post. In the meantime, do you have stories to share about these familiar paradoxes?

*Known in Hebrew as keva (fixed structure in ritual, fixed texts) and kavana (intention, focus, concentration).

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More Family Talent in Maine

Amy Schuman
Amy Schuman

  

Did you know that three generations of Wyeths painted Maine landscapes that are so stunning they will knock you out of your socks? The Farnsworth Museum in Rockland Maine is devoted to their art as well as that of other Maine artists. Farnsworth Museum . It is well worth a trip.  

The grandfather, NC Wyeth (1882 – 1945), was famous for his dramatic illustrations for classic books such as Tom Sawyer and Treasure Island.  

   

Given the legend of NC Wyeth, it’s amazing that his son, Andrew Wyeth (1917 – 2009), had the courage to develop a very different style from his father, and that his father’s success didn’t completely destroy his son’s talent. From Andrew Wyeth’s obituary in the New York Times, “N.C. was a big man with tremendous energy, a kindly tyrant as a father, according to his children, who also remembered him for his flash temper. He created a hothouse environment in which Andrew, a frail boy who came down with one after another illness, was taught at home.“Pa kept me almost in a jail,” Wyeth recalled, “just kept me to himself in my own world, and he wouldn’t let anyone in on it.” 

New York Times Andrew Wyeth Article 

If you get the chance to spend some time travelling the Maine landscape, the accuracy and drama of Andrew Wyeth’s paintings reverberate deeply. Here is one of his most famous works, “Christina’s World”  

   

The third generation of Wyeth painters, James Wyeth, was born in 1946. He showed tremendous painting talent very early, and had his first solo exhibition at age 20 just like his father. Although he shared his father and grandfather’s talent, like them, his creations were expressions of his own personal style and vision, and not copy-cat versions of their work. After President Kennedy’s assassination, Jamie Wyeth got permission to paint the President’s posthumous portrait, and even became a friend of the Kennedy clan.

  

   

It is rare to be able to see the work of grandfather, son and grandson, all in the same location. For those of us that appreciate multi-generational legacies, and diverse expressions of family talent across the generations, a visit to the Farnsworth Museum is a real treat.

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Strong Families Have Fun Together – Explore Together – So – Try Maine!

 

Amy Schuman
Amy Schuman

 

Did you know that, if you stretched the coast of Maine out into a straight line, it would reach all the way from Maine down to California? That’s how many curves and coves the coast contains. As my husband and I were enjoying a Maine vacation last month, I realized that many of our experiences would make excellent opportunities for families seeking to learn and have fun together. At the risk of competing with Tripadvisor or Yelp, I’d like to offer three ideas here! 

First, how about spending several nights on a schooner off the Maine coast?  It would make a fantastic family adventure – no escape – forced cooperation – shared adventure – cramped quarters – great food. The boat we picked, The Schooner Nathaniel Bowditch, was friendly and comfortable, and like many others, left from Rockland Maine which is right on the way to Acadia National Park. Hurricane Irene was on the radar screen when we left port, but Captain Owen and crew took great care of us, and we were able to enjoy the calm before the storm.  In fact, the trip was somewhat of a family affair with the Captain’s younger brother Paul as master cook and story teller and his older brother Greg teaching us the proper way to eat a boiled lobster as well as entertaining us with his fiddle! 

  

Second, did you know that Cadillac Mountain, in Acadia National Park in Maine, is the highest point on the eastern seaboard, all the way down to the Yucatan? If you get up to watch the sun rise, you will be witnessing the first light to hit our continent, not to mention enjoying spectacular reds and golds. I’m sure the family will never forget getting up at 4 AM, stumbling out to the car in the pitch dark and cold, then driving up the mountain to be faced with this stunning sight. 

  

Third, did you know that the lobster fishermen of Maine represent a unique form of multi-generational family enterprise? Even though they are far from the inner city, they are known as Lobster Gangs. 

The lobster fishermen in Maine have found a way to work together to enjoy a profitable fishing business today, while preserving it for future generations. Lessons have been learned and taken to heart after both the herring and cod industries of Maine were completely wiped out from overfishing. We learned about this on an Island Cruise that left out of Bass Harbor (in Southwest Mount Desert Island not too far from Bar Harbor). There were many families on the cruise and everyone was transfixed when Captain Kim Strauss pulled up his lobster traps and we all crowded around to see what he had caught.
Bass Harbor Cruises

Now that we are back home in the Midwest, just thinking about the blue sky and waters of Maine brings a smile and a bit of relaxation. I hope this little snippet of our adventures re-inspire you to pursue new vistas with those you love, in places removed from the distractions and demands of everyday life.  By the way, there is terrible cell phone coverage in Acadia Maine – just one more reason to head up there!

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The Agony and Ecstasy of Family Vacations

Amy Schuman
Amy Schuman

I’m just back from a long anticipated vacation in Israel with my husband and two of our adult children. It was wonderful in so many ways.  At the southern tip of the country, Eilat, we devoured fresh whole fish caught just that morning in the Gulf. In the northern part of the country, Karmiel, we grabbed falafel and schwarma from street vendors. We capped the trip with a visit to the red rocks of Petra in Jordan, guided by a Bedouin from a local tribe. No doubt, this vacation will live on as a high point in our family’s memories.

But, like all family trips, it wasn’t all roses. In between the fun and excitement, there was plenty of time for argument, dissatisfaction and frustration.  Travelling with young adults – ages 23 and 19 – required adjustments that my husband and I didn’t always make quickly enough. We often forgot about their maturity and sophistication, and treated them like 10 year olds. And, not surprisingly, there were times when they whined and pouted like children much younger than their years.

Here are some ideas that emerged along the way to make the whole experience more enjoyable for all:

 1. Spend time separately, doing what you most enjoy – the reunion and sharing over dinner is all the sweeter from the time and space apart.

2. Early risers can take an early morning exploration and breakfast, then bring back coffee and a roll to those who want to spend more time snuggled under the covers.

3. Requests from the kids:

                **You don’t have to explain everything to me every 5 minutes – I can see for myself what’s going on in front of my eyes.

                **Don’t ask me every 5 minutes what I want to do, or eat, or see – if I have a request I’ll tell you.

                ** Don’t plan every minute of every day – leave time to hang out, sit at the corner café, enjoy the city in its natural state

The most fun thing we found to do together turned out to be long, late night card games, euchre and rummy, full of laughter, teasing and friendly competition.

There are some great lessons here about helping families knit more closely together across the chasms of age and experience.  Don’t get too wound up by the tense and tough times – they are inevitable. Balance time together with time apart.  And, find time for simple laughter and fun together – say over a game of cards or checkers – that’s the best that family has to offer, wherever we may be on the globe.

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Should Family Council Members be Paid?

 

Amy Schuman
Amy Schuman

One family pays its Family Council President a salary comparable to that of the company President and CEO. The underlying theory is that both roles are equally important to the successful continuity of the family enterprise.

Another family has a young cousin that spends 20 hours/week on family council matters, but will not accept a salary. Her perspective is that she is not working actively in the business, but gains tremendous financial rewards from the business. She sees her participation in the Family Council as a way of ‘earning’ those financial benefits.

In another case, a family with a California-based retail business began paying Family Council members a small salary after years of intensive, unpaid work on family council activities. Instead of having a positive result, this practice led to widespread bad feelings. Family members that had worked on family council activities in the past – with no compensation – felt unfairly treated. If the current family council really cared, they reasoned, they wouldn’t accept any financial compensation for this service. Tensions in the family were heightened until the practice was discontinued.

So, once again, we are faced with a situation that has no clear ‘right’ answer. Paying a salary for Family Governance service is an individual decision, and each family will approach it differently.

It would be fascinating to hear your experiences on this matter – what is working for you?

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Tensions in Family Governance

 

Amy Schuman
Amy Schuman

A large family business in the Midwest with an active – and highly effective – Family Council has been struggling recently with two nagging questions: 

  • Should the bulk of Family Council work be done by one designated leader, or should it be spread out among committees and committee chairs?
  • Should we pay Family Council leaders and committee members for their time and efforts? If so – how much pay is reasonable?

Clearly, on the first question, a ‘both/and’ approach is desired, but not always easy to accomplish. 

One strong, designated leader provides efficiency and clear accountability, but can also lead to a de-motivated and disconnected family.  Relying too much on one person for a long period of time may lead to their burnout, with no prepared successor. Others in the family may not fully develop their leadership abilities or have the pleasure of serving as leader. 

On the other hand, an active group of committee members and committee chairs provides a wider family connection and fosters family passion and commitment, but can take a lot more time to get things accomplished. It’s hard to hold a group accountable for results, and the Family Council can bog down in the face of multiple, often diverging approaches and opinions. 

This paradox – the need for both “Strong Centralized Leader and Strong Dispersed Group” – is probably very familiar to you. Although at first the two appear to be mutually exclusive, upon closer examination we can see that they actually support each other. A strong individual leader will foster strength in committees, and strong committees create conditions for strong individual leadership. 

Have you faced this common tension – and if so, what has been your experience? 

We’ll talk about Family Council compensation later this week… stay tuned.

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Governance : Why is it so hard to define?

 

Amy Schuman
Amy Schuman

This week I’ll be speaking to a group of family business owners in the Milwaukee area, and the topic they chose was “Governance”.  When they requested that topic, first I felt excitement – but it was soon followed by a bit of dread.

I felt excited because governance is such an essential component in family enterprise strength and continuity. I also felt dread because, even after years of helping families reap the benefits of governance structures like Family Councils and Boards of Directors, I still find it difficult to come up with a simple, clear definition of governance.

Like most people, my mind immediately seizes upon Boards of Directors as the prime example of governance. Indeed, a web search on the term ‘governance’ quickly yielded the following:

That relatively simple (!) definition may work for public companies, but, the complexities of family enterprise can require more of a multi-faceted approach to governance.

For example, as families become larger and more complex, they also appreciate the benefits of more formal family governance, most often in the form of a Family Council.

Families that pursue their own foundations and other philanthropic efforts come to appreciate the benefits of strong governance in the form of Foundation Boards.

As families move into the cousin stage – and beyond – they seek governance structures to serve their larger, more dispersed ownership group. Often called Ownership Councils, these bodies provide a structure for balanced participation and oversight on behalf of shareholders.

Families with Family Offices also find significant benefits from the oversight and expertise of an objective governance group of some kind.

Given all this complexity – what’s a good, simple definition of family business governance? To inspire you, I will go out on a limb and offer my own working definition – as follows:

  • Family enterprise governance provides an established set of systems and structures that ensure sound and fair actions and decisions, often by a small number of well-qualified people on behalf of a larger number of stakeholders.

I know this definition has plenty of room for improvement – what’s missing? What’s your current working definition of ‘family enterprise governance’  – and how does it help you get the results you seek?

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