Category Archives: Career Development

Holding Yourself Accountable is Key to Credibility

Stephanie Brun de Pontet

Accountability is a loaded idea in our culture and even more so in a family business – where notions of professional accountability and family ‘loyalty’ sometimes clash.  We want folks to be accountable for their choices, actions and results, but we also want to show empathy for each other’s struggles and limitations, and patience with young people who are starting out and finding their way.

While I understand the parental desire to give our children the benefit of the doubt, or let them off the hook for a transgression that we can minimize in our minds – we don’t do them any favors by taking the ‘easy’ way.  This pattern often starts early.  When a child comes home with a bad grade and tells you that it is because the teacher doesn’t like them, their classmate makes noises and this is distracting, or a kid moved their book so they couldn’t find it – it is natural and tempting to sympathize with your child and agree that the deck was stacked against them, therefore we don’t need to hold them accountable.

Unfortunately, when family members have never really been held to account for their choices, actions or results, they have a hard time recognizing their role or responsibility in any situation.  These are the family members always being derailed by things that are ‘outside their control,’ and when things go awry it is always someone else’s fault.  Someone else failed to get them the numbers they needed to do their job, their kids are sick, the boss didn’t explain the task well, whatever.

Any adult who cannot take basic responsibility rapidly loses all credibility.  In life there will always be hurdles and challenges to overcome.  The contrast is stark, there are folks who are ‘doers’ who consistently find a way to get results despite the challenges, and there are those who will only complain and want sympathy for their plight.  Pay attention – if you find that you spend a lot of time explaining to others why you couldn’t get something done – understand that eventually folks will simply count you out, they will decide in advance that you cannot get things done – and instead seek the input or work from folks who can.

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The Princess and the Peon

JoAnne Norton

“You just don’t know how hard it is to work with the princess,” the frustrated executive began as she anxiously played with her pearls. “She comes into work late, if at all, leaves early, and doesn’t abide by the rules. I am beside myself because her father sees her as the future leader of the company. Those of us who have to work with her just see her as a spoiled brat, and if she is chosen as the next leader, we’ll all walk.”

Because the executive was a well-respected, long-standing non-family leader in the company, I asked her if she had ever tried to approach “the princess” to discuss the situation with her diplomatically. “Yes!” she cried, “but it completely backfired. When I finally broached the subject, she responded by placing her hand on her hip and asking me condescendingly: ‘Do you know whose name is on the front door?’ With that, I was dismissed and shown the way out of her palatial office. I felt as if I were a peon, that I was just an irritant to her majesty, and yet I truly want what is best for her, her family, and the employees.”

Being the child of a successful entrepreneur is both a blessing and a curse. On the one hand, there are many opportunities not afforded most. On the other hand entrepreneurs can frequently be absent from family life. Blinded by guilt for not having been there enough when their children were growing up, entrepreneurs are sometimes motivated to try to make up for lost time with their adult children. Some entrepreneurs try to do this by bringing their children into the business.  When they do this without providing needed guidance or limits, the risk to the company is serious as princes and princesses of privilege can quickly destroy a family business that took a generation to build.

Loyal non-family executives can be pivotal in solving the “Princess Problem” by identifying the issue and encouraging the family to seek outside help.  Of course, this only works if they are ‘heard’ by all sides.  Parental love and guilt are powerful forces that can blind an otherwise rational person to the hard reality of their offspring’s limited skills or destructive attitude.

Generally what makes entrepreneurs so successful is their hard work and self-discipline. Good family business coaches use those entrepreneurial strengths to design a program that will be effective for both generations. The present generation of leadership will need to be more disciplined in their approach to their children, and the children will need to be more disciplined in their approach to work.  This can represent a significant shift in how both have operated for a long time, but it is essential for the survival of the business.

Jim Rohn once wrote, “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” Mature, well-meaning non-family leaders can make sure there are no regrets.

JoAnne Norton can be reached at norton@efamilybusiness.com or 714-273-9367.  Click here to read JoAnne’s biography.

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The Ideal Family Business Leader part 2

Joe Schmieder
Joe Schmieder

As strong family business leaders juggle their many demands while balancing the needs of the business and the family, they also demonstrate these additional characteristics.

1.     Mentor & Role Model:  Nurtures, cultivates and develops family member talent as well as non–family talent.

2.     Innovative:  Leads and supports diversification efforts and drives towards preparing to reinvent portions of the business.

3.     Tough Minded:  Is willing to discipline and even fire family members when necessary.

4.     Listener:  Willing to listen to independent outside board members and advisors both in the business and outside of the business.

5.     Succession Preparation:  Plans ahead both for leadership succession and ownership succession of the business.  Is willing to let go when the time is right.

While this list covers a lot of ground – there are many other attributes that make a successful leader.  What would you say is missing from this list – what else do you think makes for a strong and effective family business leader?

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The Ideal Family Business Leader part 1

Joe Schmieder
Joe Schmieder

What is the make-up of an effective family business leader?  From my own observations and interactions with family business leaders for over 30 years, as well as listening to my FBCG colleagues who have worked with 2000 family businesses, I have recognized some traits that stand out in those leaders who demonstrate an uncanny ability to develop both the family enterprise and the family.

As you develop your own leadership skills, you may find it helpful to review these ten common characteristics of successful family business leaders.

1.     Visionary:  Looks towards long-term performance versus the short-term returns.

2.     The Balancing Act:  Understands how to constantly balance the attention needed for working in the business sphere and in the family sphere. 

3.     Birth right vs. Earned right:  Articulates and demonstrates the importance of family members needing to earn their right into the family business versus making the entry a presumed birth right.

4.     Family Voice:  Supports the voice of family shareholders and other family members who are not working in the business, either through direct contact or through an entity such as a family council.

5.     Non-Family Employees:  Ensures that executives and employees, who are not members of the “descendent” family, actually feel as though they are part of the family and are appreciated as key parts of the family business. 

Check the next blog for the final five characteristics & meanwhile, join the conversation….

What would you add as a key skill from your own experience?  If you are a family business leader – what would you want to see your successor really manage to do well?

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Developing the New Leaders of your Family Enterprise

Recently the Family Business Consulting Group produced a new webinar program titled “Developing the New Leaders of your Family Enterprise”.  Below are responses to a few of the questions asked by the participants during the program.  The complete webinar is available for replay at this link. 

Developing the New Leaders of your Family Enterprise

 

Q.  What happens when the diversity of experience looks more like you can’t figure out what you are looking for? How do you avoid this?

A.  The key to avoiding this is to be explicit about your plan in advance. If key stakeholders (e.g., shareholders and senior managers) know that the plan is to have a diversity of experiences — and it would also be good to let them know why that diversity is being sought — then it is less likely that these experiences will appear to be aimless or uncertain.

Q. Doesn’t speed to trust also play a role in versatility? How does trust play a role in versatility?

A. Trust does, indeed, play a role in versatility… as do a number of other factors such as business acumen, time management, and communication skills. We’ve found, though, that focusing on the “What” (Strategic vs. Operational) and “How” (Forceful vs. Enabling) of leadership will give you the most “bang for your buck.”

Q. Interested in John Ward’s students “ learnings”

  • Sales are Vanity
  • Profits are Sanity
  • Cash is reality
  • Values are eternity

Q. How do you handle a situation where founder (patriarch) has stepped away and in later years seeks to become actively involved or promote projects initiatives that are aimed at leaving his “mark”? in the process he is altering the Next Generation working dynamic.

 A.   To the frustration of many successors, founders commonly “come back.” They claim there is unfinished     teaching and contribution. In fact, they are unhappy, perhaps very depressed, since letting go.

The best we can advise is to (1) see if you can channel his/her energy in a constructive way; (2) over, over communicated; (3) hopefully benefit from the support of an outside board (or, perhaps, from long-time professional advisors).

Q. How important is it to publish and share the mission, vision and values of the family?

A.   Family mission, family values, and the family’s ownership vision are the most important foundation and the backbone of the family constitution. We believe this is so as the family’s family commitment to each other is essential for long-term ownership continuity.

Q. Is Level 5 leadership a book or an article?

A.  “Level 5 Leadership” is an article from the Harvard Business Review by Jim Collins. It is an examination of one piece of his book called “Good to Great.”

Q. How do you deal with a founder who does not delegate and does not give away real power?  It makes it impossible to grow as a leader?

A.  A founder who does not delegate makes the situation difficult. There are many factors to consider, but the two that I would start with are (1) trying to figure out what is constraining the founder from delegating (sometimes, simply asking the founder, “What keeps you from delegating?” may be enough to loosen those constraints), and (2) painting a picture for the founder of the likely long term consequences of not delegating — often, the thing that constrains founders in situations like this is that they are so focused on today that they haven’t given much thought to tomorrow.

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The Year of You

Norb Schwarz

By now most of us have made our New Year’s resolutions and have put them on a back shelf.

For 2012, I am working on a new challenge. I am concentrating on self-improvement as opposed to focusing on the business. The process will be much the same as my business planning process. First take an inventory. Who am I? What are the elements that make up “me”? I came up with eight potential elements for myself; the spiritual me, the emotional me, the relational me, the financial me, the professional me, the experiential me, the intellectual me, and the physical me. Given those elements of “me”, the next step is to look at how I have fared in each area in the past, where I am now, and where I want to be in the future. The final step is to outline what I have to do to meet each of my future goals and begin the process for each.

I like to keep the following favorite verse in mind as I go though my “year of me” process:

Isn’t it strange that princes and kings
And clowns that caper in sawdust rings
And common people like you and me
Are builders of eternity?

To each is given a bag of tools
A shapeless mass and a bag of rules
And each must make, ere his life is flown,
A stumbling block or a stepping stone.
R. L. SHARPE

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Accountability: “Evaluate to improve, not to prove.”

Norb Schwarz

A young next generation executive working for the family business her father founded recently told me that lack of accountability among family members in the business was hampering the successful transition of the company to the next generation.

Unfortunately her comments mirrored those of other clients who have had difficult transitions due to apparent lack of accountability. Why is accountability such an elusive issue in many family businesses?

Perhaps it is because accountability is thought to be synonymous with “consequences” and thought of as punishment for failing to accomplish a task.  Yet, if we looked at accountability with a different lens, perhaps some of the barriers to its acceptance might be torn down.

Rather than looking at it as a way to impose consequences or punishment for failure, we should be welcoming accountability as a process that offers an opportunity to learn and improve on results that are both positive and/or miss the mark. Clear communication of agreed upon goals and measureable benchmarks to achieving the goals are prerequisites for the successful integration of accountability into a positive culture for the family business. With this positive process in place it will be much easier to establish a meritocracy based on accountability as opposed to an aristocracy.

“Evaluate to improve, not to prove.”

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Innovation in Family Business: Capturing the entrepreneurial spirit and ambition of the younger generation

Joe Schmieder
Joe Schmieder

Rick DeVos, a 28-year-old highly-entrepreneurial third-generation family member, wanted to create some new business ventures that did not fit into the current family business.  His parents wanted to encourage their son’s entrepreneurial spirit yet ground him in business reality.

Entrepreneurism runs in the family.  Rick is the grandson of Rich DeVos, who is the co-founder of Amway.  Rick’s father, Dick, led Amway into the international arena where the majority of the business is conducted today, and his mother, Betsy, comes from an enterprising family that developed a large auto parts company with many creative products that line the inside of cars.  Thus, with two creative blood lines coursing his veins, Rick possesses an abnormally high degree of creativity.

To harness this creative energy, the family provided a “loose leash” and seed money to create a host of ventures, including an internet film business, an entrepreneurial award business, and an open social-network art contest.  The highly-acclaimed ArtPrize (www.artprize.org) has taken the art world by storm, creating one of the most innovative ways to engage an entire community in the conversation about art while providing a great opportunity for artists to share their work.

How are you capturing the creativity of the younger generation in your family business?

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Back to School for the Kids and the Family Business

Jennifer Pendergast
Jennifer Pendergast

As the nation’s children head back to school, many of us “grown ups” are reminded of our school days.  Some enjoyed their academic experience.  Others couldn’t wait to get out into the real world.  Regardless of your school experience, hopefully as you’ve grown older you’ve realized that learning is a never-ending pursuit, whether it be of the academic variety or the on-the-job variety.  For many businesses, back to school time coincides with budgeting time.   As you are developing your financial objectives for the year ahead, why not develop learning objectives as well?  They may be at the individual, company or even family level.  And, the objectives may be fulfilled in a variety of ways – attend a seminar, read a book, reach out to a colleague with expertise in a given area, hire a consultant. Creating the same discipline around managing your intellectual resources as you have around your financial resources should help to ensure that you, your business and your family will continue to grow.

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