All posts by Wendy Sage-Hayward

Top 10 New Year’s resolutions for family businesses

Wendy Sage-Hayward
Wendy Sage-Hayward

It is that time of year where everyone is making New Year’s resolutions. I am not necessarily a big fan of resolutions primarily because too often we don’t remember them shortly after we make them! However, if we treat New Year’s resolutions with a bit more formality by writing them down and reviewing them regularly then we will have a greater likelihood of success.

My second issue with New Year’s resolutions as they relate to family business, is that they typically focus on individual outcomes like weight loss, exercising more and the like (which are all good goals of course!). However, this year rather than focusing all of your resolutions on yourself, try developing one for your family firm.

Here are a few resolution ideas to get your thoughts moving in this direction:

  1. Practice daily gratitude towards your family members – especially the ones you find more challenging.
  2. Identify three items in your family code of conduct that you will improve this year.
  3. Engage the next generation in a new conversation about their role in the family business.
  4. Go to a family business conference or course with another family member (not a spouse) this year.
  5. Schedule a conversation with your family about what money and wealth mean in your family.
  6. Complete your shareholder’s agreement in 2015, or at least get started on it!
  7. Develop family employment policies for your family firm.
  8. Schedule a conversation to talk about the pros and cons of pre-nuptial agreements or co-habitation agreements.
  9. Start a family business book club in your family. Top reads include: Innovation in the Family Business by Joe Schmieder or Strangers in Paradise by Jim Grubman.
  10. Develop a plan for exiting your family business in five years.

Remember when it comes to goals, less is more so don’t try to do all 10.  Start with accomplishing one or two, then move along and try more.

What would be a great New Year’s resolution for your family firm?


After holiday reflections: The value of family

Wendy Sage-Hayward
Wendy Sage-Hayward

I, like many of you, have just returned from the holidays where I spent time with my family as well as with a few other business families. During this time, I was reminded of the wonder of family along with some of the challenges of being with family, especially for certain personality types.

It can be difficult to manage the many different perspectives, needs and sensitivities of a large group of related people. Everyone has ideas about how things should be done or where you should go or even what the best way to cook the turkey is. Not an easy path to navigate and yet one of the most significant ongoing tasks of our lives is to build and maintain a sense of family.

How do we make people feel included, loved and respected when we are all together for the holidays? How do we honor each other’s status needs? How do we constructively manage the inevitable conflicts? How do we balance our own needs with that of our family’s? And most importantly, how do we continue to enjoy being part of an ever-evolving family?

Being with family takes just as much, if not more, planning and intention than anything else we do in life. If we do not set out standards and a plan for how we want to be together, how will we ever achieve a greater sense of connectedness? For many families, the variable personalities and dynamics are just too complicated to let it evolve all by itself. We need to be thoughtful and intentional about how we come together and celebrate, especially during special holidays which have a natural stress already associated with them.

Here are some reflections on how to manage the holidays and special events of any kind with family.

Why?  First, be clear on why are you going to celebrate the holidays with family in the first place. What do you value about family? For me, family is about a commitment to join together for the purpose of fostering ideals like love, belonging, tolerance and justice –  things that really matter. Family is one of the key mechanisms in life that allows these ideas to become real when they are shaped by traditions which are handed down from generation to generation. Remind yourself of the value family brings to your life.

How much? Second, plan for the stress – it is an inevitable part of relationships and families! Build skill and capacity for managing it better. Families are our practice ground for the stress we face in life. Attempt to be boldly tolerant and patient with others. Families aren’t just about the good feelings we get from them. They are a place for us to expand and develop as human beings. Be clear about how you are going to participate and how much you are going to participate.  Doing some planning before the holidays start.  It’s a great time for a family meeting to chat about how and where everyone wants to participate.

How do I balance it all? For many the stress of the holidays is not the one event (like Christmas day).  It is the ongoing events: the busyness of being out night after night with family, business associates and friends.  So once we get together with family, we are already tired and sometimes on a short fuse. Make sure you exercise your “no’s” when appropriate. This will help you ensure your tank isn’t already empty by the time “family time” rolls around.

How can I help?  Finally, on a more practical note, do your part. Consider your role and how you can help make the load lighter for others.  It is a ton of work to bring family together. The cooking, cleaning, organizing, shopping and event planning are enormous. In many families, it falls on the same people year after year.  Before the holidays, have a family meeting and decide how everyone will contribute.  This year, we had a family meeting at Thanksgiving and made our plans for all of the holiday events: who would host, how each person would contribute, etc.  So pitch in, share the load and have a laugh while you are doing it!

Ultimately, we all want to feel a greater sense of connectedness during the holidays.  Being clear about why we are coming together, how much we want to be together, and balanced about everyone’s contribution can help facilitate that connectedness.


Tough transitions in family business: Secrets to success through the neurosciences (Part 2)

Wendy Sage-Hayward
Wendy Sage-Hayward

In my last post, we reviewed family business transition through the lens of our brain’s primary operating principles (status, certainty, autonomy, relatedness and fairness). Now let’s explore what we could do differently in a family business transition process to minimize the threat response and maximize our ability to respond effectively to change.

To recap, our brains are wired to look for threats rather than rewards. Transitions in family firms trigger our brain’s threat response system. During transition we tend to focus more heavily on dealing with any perceived threat until that threat is resolved. Our decision making abilities, our performance and productivity invariably suffer as a result – causing maximum disruption in a time when thoughtful planning and measured response is required.

Our goal during transition should be to shift the sense of threat from an unconscious to a conscious level so that we can make better choices around how to respond. To do that, family business leaders must mitigate the threat by eliminating it or generating a reward to compensate for it.

Here are some thoughts on how to mitigate threats and trigger a reward response during transitions in family firms:

Secrets to Success through Neurosciences (Part 2)
Click Chart to Enlarge

Printable PDF version also available.


Tough transitions in family business: Secrets to success through the neurosciences (Part 1)

Wendy Sage-Hayward
Wendy Sage-Hayward

We all know or have experienced the difficulty of transitioning a family business from one generation to the next. It is no easy feat at the best of times. Recent research within the neurosciences may provide some deeper insight and appreciation for why family firm transitions are so difficult.

Social neuroscience researchers believe our brain operates on five primary principles: Status, Certainty, Autonomy, Relatedness and Fairness (David Rock, 2011). When we consider what occurs in family business transitions, it is very likely that most or all of these operating principles are threatened during a transition process.

First, let’s consider status. A founder’s status (i.e., his/her importance relative to others) in a family business succession changes during a transition process. In fact, a founder’s status may be reduced significantly as he steps away from the CEO role and the next generation leaders step in. Depending on the status needs of the founder and what he has planned next for himself, this change in status may cause tremendous personal anxiety and stress. A founder with a strong status drive may be very reluctant to give up his status within the business especially if there is not a new role or activity “in waiting” that has the same or higher status associated with it (e.g., chairman role).

Our brain’s second operating principle is certainty. Again, during periods of transition within a family firm, there is often a significant amount of uncertainty both with the incumbent generation and the next generation. Uncertainty stems from the “not knowing” in the transition process and is different for the serving generation than it is for the next generation. For example, uncertainty for the incumbent generation includes things like: not knowing what life looks like post-CEO role for the founder, not knowing if the next generation can “handle” operating the business, not knowing how to exit the business and maintain the same lifestyle, and so on. Whereas uncertainty in the succeeding generation stems from things like not knowing who will be the next CEO (because no one is talking about it), not knowing when the founder will retire (because every year he says he will retire within the “next five years”), not knowing how to liquidate shares if desired, and so on. The threat of uncertainty triggers a threat response in our brains causing us to react negatively or even delay the transition process.

A third operating principle which is triggered during family business transition is autonomy (i.e., the extent to which we have choice). During family business leadership succession, collaboration and greater consensus is often required to build buy-in and engagement into the future direction and plan. The founder may feel frustrated because she is losing her ability to make decisions independently during a transition process. Transition requires the involvement of more family members to make the transition as smooth and effective as possible. The founder may not like the direction that the successors are headed but is no longer able to dictate the solution. Our need for autonomy gets triggered in the transition process causing a threat response when our independence is compromised.

The fourth operating principle, relatedness, may also get threatened or triggered during family business transitions.  Relatedness involves feeling a sense of safety and belonging with others. During a family business transition, a founder’s feeling of belonging may shift because she is no longer part of the team. She needs to find a new group to relate to or determine how to relate differently to the team in the business as she is no longer the leader per se.  Relatedness can also be threatened for the next generation because they may need to form new relationships with a non-family CEO or with each other because the team dynamic shifts when the founder steps away and a new leader steps in.

The final operating principle is fairness (i.e., the perception of impartial or rational decisions and exchanges between people). During a transition process – especially if shifting from a founder stage of ownership structure to a sibling partnership or cousin consortium – fairness issues can develop quickly. Anxiety and concern related to fairness issues include the following: Am I being treated fairly as a daughter or son? How do I treat my kids fairly when they all have different capabilities?  Why is it that I work harder than anyone else but I don’t get more shares? and so on. Our brain has a natural sense of fairness (although what seems fair varies from family member to family member) and thus we need to believe there is equity associated with where we end up.  Again, anxiety, frustration and a feeling of injustice can result when the brain’s fairness principle seems to be violated.

Check out the FBCG blog on Thursday for how families in business can mitigate threats and maximize success in the transition process.


Are you Getting Hijacked during Conflict in your Family Business?

Wendy Sage-Hayward
Wendy Sage-Hayward

Have you ever been in an argument with your father (or any other family member) regarding something related to the family business where you both behaved badly, said nasty things, and essentially blew your tops? Neuroscientists call this a “limbic hijacking”.

During a conflict situation it takes our brain only a millisecond to recognize a threat and move into high gear for a fight, flight or freeze reaction. Our brain calls for the release of adrenaline and reduces the production of dopamine (our feel good chemical).  Our heart rate and blood pressure increases. Our breathing becomes shallow. We start to sweat.  Blood flows out of our organs into our major muscle groups. Our pupils dilate and we develop tunnel vision. We sometimes get shaky or turn bright red.  Essentially our brain is saying “Pay Attention Right Now!” and sets us up to react without having to think.  Literally we do not have to “think” about what we are going to do because the automatic processing parts of our brain take over.

Research into the neurosciences is helping us understand this rapid and intense reaction at a deeper and more profound level. Neuroscientists suggest that the part of our brain responsible for our higher level thinking (pre-frontal cortex) has an inverse relationship to the part of our brain responsible for emotions (limbic system) and our automatic response to a threat as described above. In other words, when we react in a conflict situation we are not thinking, listening or responding with our rationale brain resources. In fact, our brain gets hijacked by our emotions.  We can virtually stop “thinking”.

Conflict is inevitable and completely normal; and therefore, conflict in family business is somewhat standard fare. So how can we learn to better handle our “limbic moments” in a family business? The good news is that our brain has plasticity which means it can learn. A simple three-step process can help mitigate a limbic hijacking:

  1. Take three deep breaths to introduce endorphins in your system which will calm you down.
  2. Stop and “think” – shift your attention away from your emotions to thinking. Think about what happened. How did you react? Why did you react to way you did? Why did the other person react the way they did? Or think about something entirely different. Ask yourself a question to start your thinking processes.
  3. Consider your triggers. “Think” about what triggered such a strong reaction in yourself and/or your family member.  Determine how you want to react the next time the trigger appears. Identifying triggers can help us recognize them more easily in future interactions.

It will be difficult to resolve a conflict in your family business if someone is experiencing a limbic hijacking. Training your brain by using mindfulness techniques (see previous blog this week) and the process above will help to strengthen your ability to manage the automatic brain responses that kick-in during stressful situations in your family business.

If you are interested in reading more about how your brain functions, please see “Your Brain at Work” by David Rock. It offers a useful overview.


Managing the Whirlwind Mindfully

Wendy Sage-Hayward
Wendy        Sage-Hayward

Leading in a family business is layered with complexity due to the integration of the family in the business environment. This complexity is highly rewarding but also stressful and challenging at times especially for family business leaders. When trying to balance the demands and needs of the family and the business it can feel like managing in a whirlwind. New research on the brain helps us better understand how we can deal more effectively with the daily whirlwind of the family business.

Typically we perceive a stressful event using one of two automatic brain responses:

  • Adrenalin based reactions – saving ourselves from danger by fighting with, running away from, protecting or camouflaging ourselves… ….fight, flight and freeze OR
  • Problem-solving processes – where we attempt to fix or resolve a perceived problem with higher level thinking. This is where we respond wisely and appropriately, rather than adding to the stress by engaging in automatic uncontrolled reactions. Neuroscientists call this a mindful reaction.

Mindfulness is “paying attention on purpose, in the present moment, non-judgementally….” (Jon Kabat-Zinn). Mindfulness is a mental discipline which involves focusing our attention. It is not a method of distracting ourselves or tuning out. In fact, it is about tuning in. Research by Jochen Reb previously at The University of Cambridge shows us that leaders perform better when they are mindful. They make better decisions, are in a more positive mood, and effect change more successfully in their businesses. The anxious, stressed or depressed state of mind is a distracted state (i.e., mindless rather than mindful) and has a negative impact upon a leader’s performance.

Many research findings suggest that the regular practice of meditation increases our mindful abilities and has many positive impacts on our physical, emotional and mental well-being including “neuroprotective effects” which result in reduced mental decline associated with normal aging (Pagnoni and Cekic).

Incorporating mindfulness practices into the daily routine of family business leaders promises to bring about more thoughtful, positive and constructive leadership to both the family and the business. Mindful practices are simple and yet have a powerful influence on our family and business relationships. Here are two simple ways to practice mindfulness:

  • Attend to something easy like your breathing for one full minute. When your mind drifts away, bring it back to your breathing. The repeated returning to a focal point trains your attention.
  • Take a few minutes and focus on each part of your body starting at your toes and moving slowly up to your head. This is called body scanning.

The benefits gained by family business leaders from engaging in these virtually effortless, yet influential daily practices are quite remarkable:

–   boosting teamwork, cooperation and well-being amongst family and non-family employees

–   reducing unconstructive thoughts and emotions which waste valuable mental energy

–   renewing energy and creating a clear focus to address decisions and tasks at hand in the business

–   arriving home with a positive mood after the day’s whirlwind of activities

Mindfulness deserves our attention!


The Purpose of “Family”

Wendy Sage-Hayward
Wendy Sage-Hayward

What is the purpose of family? It sounds like a funny question given “family” is so fundamental to the fabric of our society and to our very being. However, it may be so fundamental that it has become invisible to us. We may have lost sight of the real purpose of family as we pursue our individual goals and interests.

This time of year is a perfect time to reconnect with the real purpose or “task” of family. The first place to start is with the definition of family. My experience with families in business is that the shape of a family changes over time as newcomers enter, and sometimes, exit the scene. On occasion we need to rejig our concept of family to encompass more than just the traditional form (e.g., one dictionary definition defined family as “a group consisting of parents and children living together in a household”). An example of a more modern family business consists of two parents who have separated from each other and found new partners. Some of the children from the marriage are married, some are co-habiting, and others choose to remain single but decide to have children. This modern family goes on holidays together but may still hold ownership meetings with the original nuclear family (Mom, Dad, and 4 Children). The separated couple still work side by side in the office together with one of their new partners. All is not smooth and simple, but the vision of family is clear and purposeful.

So if we can wrap our mind around what we mean by family – in that it can be defined in a wide ranging and diverse form – then what is the “task” of family? This question would likely receive different responses depending on your world view. Here is one set of thoughts on the purpose of family….

  • To create and raise the next generation
  • To provide care and safety
  • To offer affiliation and a sense of belonging
  • To give an abundance of acceptance and love despite the warts (which we all have!) of each individual member
  • To instill respect for social/cultural norms as well as the family’s unique values, norms, and beliefs
  • To teach and guide
  • To be a support system when in need and through life’s ups and downs
  • To provide life-long relationships

How would your definition vary from the above? If you were going to grade your family on how well it accomplishes its tasks, how would your family report card look? Where would you need to do some remedial work to bring up your grades?


Boundaries: Drawing a Line in the Sand

Wendy Sage-Hayward
Wendy Sage-Hayward

How good are you at drawing lines in the sand? By lines, I mean boundaries. Boundaries are the rules or limits we expect of others in our family and in our business which specify what is or is not acceptable to us. Examples of boundaries I have seen recently in family enterprise include the following:

  • Declining to speak to someone when they are disrespectful. When a daughter starts swearing at her father in front of staff at the office, the father says: “Until you speak to me respectfully, I am not willing to engage in this conversation with you”. He then walks away.
  • Refusing to create an unnecessary position for a friend of a family member. The VP of HR refuses to create an unnecessary job for the friend of a family member regardless of the relentless pressure exerted by the family member (in G2). The VP of HR insists on waiting for a real job to open up. She will then allow the family friend to apply for the position but will not guarantee her a job unless she is qualified for it.
  • Holding out for an apology. A sister refuses to speak to her brother outside of work related issues until he provides a genuine apology for writing her a nasty email about what he perceives to be her controlling and overbearing attitude/behaviour.
  • Deciding not to enable an addiction. An uncle declines to give money to his nephew when he strongly suspects his nephew plans to use the money to buy drugs rather than pay his rent. The uncle decides to pay his nephew’s rent directly. In addition, the family members working in the business have recently decided not hire a family member who has an active addiction.
  • And…I am sure you can identify many more!

Firmly holding boundaries can be easy for some and not so easy for others. One reason it can be difficult is that often people have a powerful story or explanation about the situation that serves to rationalize why they should concede during a particular encounter with another family member. They convince themselves that it is not a big deal or that by giving in they will get a better result somehow.

Our stories shape our behaviour in very powerful ways. One of the biggest challenges for members in a family business is to become aware of their own story. Unfortunately, our stories are often completely transparent to us – in other words we do not see the story as a story over which we have choice – rather we see it as truth. For example, if the father in the first example (above) consistently allowed his daughter to talk to him in a rude and disrespectful way in front office staff, his story could sound something like this: “Well, she doesn’t really mean it. She is not feeling well today. She has been having a rough time lately. I need to be more understanding and patient and then she will be too. It is not really a big deal. Everyone swears once in a while”.

The first steps in designing clear boundaries is to ask yourself some key questions:

  • What do I want to say “no” to that I am allowing right now in our family business/family relationships?
  • Why don’t I say “no” to this behaviour now? Why do I give in?
  • By continuing to allow this situation to occur, what impact is it having on me and others in our family or business?
  • What is a more powerful story/explanation that could help me to hold this boundary more firmly?
  • What do I need to do next?

The Entitlement Snare: Exploring Our Boundaries (Part B)

Wendy Sage-Hayward
Wendy Sage-Hayward

Parents in North America are caught in a dilemma. Baby boomers have more money than previous generations and one of our core cultural values is to give to others.  Naturally, parents form the notion that “we have money so we should share it with our kids”. This type of thinking leads to children getting what they want and often much more than they need. They get caught in the entitlement snare.

Recently when working with a wonderfully loving and giving family, I realized that love is not enough – especially in a family business. The famous line “love is all you need” may be leading us to believe in a fallible principle.

Parents need to establish and manage clear, reasonable boundaries from an early age in a family firm. Boundaries are rules or expectations you have as an individual, in your home and family, and in your business. As with many things in life, it is not the articulating of boundaries that is the challenge but rather the enforcing of the same. Most of us have a shared notion, for example, of what we consider to be healthy expectations and rules within our family firms: show up on time, deliver on what you promise, be respectful, accept feedback as positive input to your development, pay your own way and the like.

The real challenge comes with managing our boundaries and doing so with grace, finesse and wisdom. Boundaries can too easily get blurred due to the complexity and emotional context of a family firm. Unfortunately life is not  simple. Circumstances and relationships are not black and white.

As leaders of a family and family business it is imperative to consider what boundaries are important for you, your family and your business. In addition, it is critical to evaluate the type of support you may need to keep your boundaries strong.

One important cautionary note… It is too easy to suggest that we “set and hold” our boundaries one hundred percent of the time.

Sometimes it is fitting to re-assess and move the line you have drawn in the sand to more aptly address the situation at hand. Only good judgment and wisdom can help us understand the rare situations in which we need to be flexible with our boundaries.


The Entitlement Snare: How Entitled Attitudes Develop (Part A)

Wendy Sage-Hayward
Wendy Sage-Hayward

Entitlement is one of those sticky and sensitive issues in family business. Entitlement is a difficult subject to raise because it creates defensive (and offensive) behaviors in family members. When most families start talking about entitlement (if they talk about it at all) it feels like a blaming game: “I wish my daughter would be financially responsible and stop relying on us to pay her bills”, or “my son has no work ethic”, or “my brother acts like he can show up for work any time he likes”.

Entitlement, as defined here, means the belief that one deserves or is at liberty to access certain privileges that others are not based on arbitrary factors such as family lineage. In other words it is an unrealistic or unjustified sense of deserving some type of benefit. Those who are labeled as “entitled” in a family business are a target for criticism, and judgment and even resentment, even if only behind closed doors. The entitled are considered fully to blame for their entitled behaviors, attitudes and transgressions. Too often there is a great deal of energy consumed by strategizing on how to work around these folks and address the issues they create.

However, entitlement is a two-way street in that liberties may be taken by the entitled but those privileges were likely bestowed on to the entitled by parents or other family members at some point, either intentionally or unintentionally. In addition, when unwarranted liberties are taken, too often there is no or inadequate consequence within a family firm.

The development of entitlement is a complex and layered process. Sometimes clear rules or boundaries are not clearly articulated because it is assumed that children, siblings, or cousins should know the rules.  Sometimes family members do not hold their ground when boundaries are pushed or challenged which children and certain personalities are prone to do. Sometimes too much is given to the next generation without requiring of them an offsetting contribution. Sometimes parents worry too much and take accountability for things the next generation should be accountable for.

As a family and a family business, one place to start is to stop blaming those who are considered entitled and recognize our role in the development of the entitlement snare.

Part B: The Entitlement Snare: Exploring Our Boundaries coming later this week.