Category Archives: Family Business Education

How one family got started with family education

Steve McClure
Steve McClure

When a large family was moving into its fifth generation of adults, their Family Council knew it was time to invest in future shareholder development.

The family had 20 fifth-generation future owners and beneficiaries who ranged in age from 14 to 39 (plus several more who were younger) and were geographically dispersed. There were also a few members in that same age range from the fourth generation. Some relatives had worked for the company in summer jobs, but most had not. Some attended shareholder meetings and many did not.

Faced with these challenges, the Council asked themselves: “How do you educate the family, and on what?”

They agreed to form an Owner Development Committee consisting of five fifth-generation members and one fourth-generation member. The mission was to research and design their own education program. Over the course of nine months, the committee organized their recommendations into four segments:

1) What should we do together? Seeing as some family members barely knew their cousins, the committee recognized that teamwork development was necessary to become a unified shareholder group. They decided to set aside one day prior to the annual shareholders’ meeting to conduct group programs. In turn, this would naturally increase attendance for the shareholder meetings. Programs would be oriented toward the whole group, but the day would also have three breakout sessions with age-appropriate content aimed (1) at the teens, (2) the college-aged group and (3) the older cousins. Programming would include tours, management presentations and education about the company. There would also be projects, plans and decisions requiring collaboration, leadership, organization and accountability. By learning and accomplishing projects together, they reasoned that teamwork would develop as they achieved their desired educational goals.

2) What body of knowledge and skills do we need to master? The committee identified subject areas based on their research drawn from attending family business seminars, speaking with other business families and reading related materials. Skill and knowledge areas included financial statements, investing, communication and negotiating skills, knowledge of their business and industry, family values and history, business strategy, and an understanding of the role of the board, shareholders, family governance and management.

3) What education should we provide and what should individuals learn on their own?  Next, the committee defined what individuals are expected to learn on their own (primarily from books, articles and seminars), what will be provided to the group (customized programs presented by other business families, speakers and trainers), or made available to attend (seminars, courses and training programs). For the seminars and other resources, they established rules and procedures to address education costs and set expectations about expenses covered by family members.

 4) How do we implement?  Understanding that implementing all the educational initiatives at once would be overwhelming, they designed a multi-year, roll out strategy. The first step was introducing the one day, pre-shareholder meeting to inform everybody of the curriculum and obtain buy-in.

The committee presented their recommendations to the Family Council, and then to the entire family at a family assembly meeting where they received unanimous support.


Family Retreats

Bernie Kliska
Bernie Kliska

A family retreat should be a time to align values and educate each other, while at the same time have some fun. It is usually held in an informal setting where family members can bond and exchange ideas and information.

To handle the flood of material, questions, complaints and accolades, it would be advisable to have a facilitator to help guide the family with their interaction.

What may seem like a good idea at the time, can fall flat or even become an occasion for family flare-ups. So what makes for a good family retreat?

  • Develop a Defined Outcome: It is valuable to have realistic and clearly defined goals and outcomes. The agenda should be distributed to everyone in advance and based on input from the entire family.
  • Be Thoroughly Prepared: There should be no surprises. The single largest cause for why family retreats do not succeed is because of not being prepared. If for example, one person is a “trouble maker,” that should be anticipated in advance. If a family has a hard time sitting for an extended period of time, that has to be factored into the design of the retreat.
  • Bring Solid Content: This is an opportunity to gain family cohesion around certain viewpoints and strategies. This is also a time for families to learn something about themselves as individuals, as well as collectively as a family.
  • Ensure Effective Process: Often family leaders focus on the end result and underestimate the importance of the process involved in the discussions. The process should be fair, open and engaging to ensure full participation from everyone. While content is critical, it is often the process that causes problems and derails communication.

If properly planned, the family retreat should be an opportunity to prevent confusion, dissension and conflict. Having sincere and candid communication will only benefit the family, as well as the business.


Laying the Entrepreneurial Foundation

Anne Hargrave
Anne Hargrave

At a recent gathering of 100 family business and family office advisors, from numerous professional disciplines, there was an expansive discussion about what it takes to foster entrepreneurship in business, philanthropy and wealth management.

Over the course of two days, a few themes surfaced around specific actions parents might take to instill qualities often found in successful entrepreneurs, such as…

Create a Foundation for Resilience. Resilience surfaced as the most common thread in entrepreneurial success stories.  Healthy relationships, sound health, eating and sleeping well, and physical activity all create a foundation for resilience.   When relationships amongst people in a family are healthy, individuals can withstand stress, even trauma.  When you feel resilient you are more able to view risk as a means to reward (not an impediment), and gain strength and courage from difficulties.

Insist on Respect. 
Being considerate of each other, demonstrating respect, is the tie that binds, even more than love. When we allow family members to define themselves, appreciating and celebrating differences, they can then embrace their own strengths – fostering confidence and self-esteem. When someone feels respected they are more able to believe in possibilities and their own personal ability, and dream actively – a foundation of entrepreneurship.

Embrace Failure.  Treat failure as a given; celebrate failure.  Some families actively seek out failure examples at the dinner table, or in family meetings, to explore what was learned and how the experience can be turned into another opportunity.  Making failure acceptable and expected encourages resilience, courage and the inner strength to continue to move forward.

Look for Mentors. Encourage family members at an early age to ask for advice, learn from others, and shape and create opportunities.  Mentors can be found through school, athletics, community, social relationships, business contacts, and family members.  Entrepreneurs generally have a strong work ethic influenced by those around them who modeled the right behaviors.  Mentors can help frame up a vision for the future.


Power without Knowledge – An Unnecessary Burden

Mike Fassler
Mike Fassler

In my work with sibling or cousin shareholder groups, I often encounter unprepared, or “sudden” shareholders.  These individuals come into ownership of their family’s business as a result of a gift or the death of a parent with little to no preparation for the role of owner.  As these shareholder groups come together to align for the future, a challenge they face is that some of the shareholders who now have decision-making powers have not been equipped with the knowledge on how to effectively manage this responsibility.

Often the “sudden” shareholder becomes dazed and confused about what being a shareholder means.  Questions like: “What are my responsibilities?”; “How much time do I have to commit?”; “Do I have to do real work if I am a shareholder?” “What if I really don’t want to be an owner – what are my options?”  arise in their minds.  They don’t really understand what ownership of the family business means to them or the broader family.

This situation can bog down the governance process and lead to ineffective decisions as the shareholder group seeks a threshold level of knowledge to “get up to speed.”  In addition to the time each individual shareholder may need to wrap their mind around their rights and responsibilities, the group of shareholders also has to learn to collaborate as a team of owners – something that doesn’t just happen by virtue of kinship! The governance process tends to slow to the pace of the family shareholder with the least knowledge.

A critical component of multi-generational family business continuity is a cohesive shareholder group.  The better prepared the family is for transition of ownership from one generation to the next the smoother the transition will go.  A key part is preparation of all potential next generation shareholders through a deliberate next generation shareholder development effort.  By learning about being an effective shareholder well in advance of a triggering event, the family and the business will be better equipped for continuity and will not run into the unnecessary burden of power without knowledge.


The Power of Mistakes

Stephanie Brun de Pontet
Stephanie Brun de Pontet

Nobody likes to make mistakes – but avoiding mistakes at all costs may be a big mistake…

First, everyone will make mistakes – you cannot realistically avoid this. 

Living in a bubble, making no decisions and generally staying away from life will still lead to countless errors of missed opportunities.  Don’t forget – there are mistakes of ‘commission’ (things you should not have done) like accidently insulting a key supplier, or making an error in your financial analysis – these you can avoid by taking no actions and making no choices.  Yet, there are also mistakes of omission (things you should have done, but failed to do) like not returning the call from your brother because he is difficult, or not following up on a sales lead  – and living on the sidelines trying to avoid any responsibility will lead to those mistakes every time.

Second, most successful businesses are built on a trail of mistakes. 

By that I mean most entrepreneurs failed many times before arriving at their current success.  It is not that entrepreneurs are wild risk takers – rather they do not see risk in the same way others do, and they are very skilled at learning from their mistakes.  In order to break new ground, truly innovate and bring a new product or service to market, the entrepreneur has to be willing to engage in a lot of experimentation, trial and error, and mistakes. The best advice I have heard on entrepreneurial mistakes is to ‘fail fast’ – that is, commit to a path or idea – be willing to make a big mistake, but then know quickly when to pull the plug, learn from the mistake and make the needed adjustments to try again.

Third, mistakes will help you uncover your path and full potential.

If, like many people, you are not clear about your path in life, trying a range of paths and ideas will help you to uncover first what you don’t want to be doing (the mistakes) which will help inform your understanding of what you should be doing.  If you are unwilling to try new things for fear of failing or making mistakes, you will never have the opportunity to discover what truly energizes you.  Note that even if you are clear on the path to success you want to follow, you cannot really reach your potential without making mistakes as you take the hard turns on that path.  If you never make a mistake – it isn’t that you are particularly gifted, it is rather more likely that you are on the path of least resistance and not taking the risks you need to reach your full potential.

These quick reminders of the value of mistakes can be important for families in business together because once a family and business have experienced great success and stability – it can be hard to remember the journey of failure and mistakes that lead to this outcome, and easy to fall into the trap of playing defense and striving only ‘not to fail.’  Both the business and family members need to continue to be willing to make mistakes to grow, evolve, and find their full potential.


Life Long Development

Jennifer Pendergast
Jennifer Pendergast

A few weeks ago, I had the opportunity to participate in a family business conference.  I was struck by the number of sessions devoted to the topic of education – educating the next generation of owners, educating the next generation of leaders, educating responsible stewards of wealth.  The audience was clearly attuned to the importance educating the next generation to ensure they are prepared to carry on the family business…  Yet, they didn’t seem to think much about what they, the current generation, may need to be doing themselves to ensure they were doing the best possible job as owners and leaders.

One of the experts leading a session raised the point that the words training and development, often inter-changeably, are actually not the same.  Training refers to a set of exercises or activities that are designed to lead to mastery of a topic. Many of the conference attendees were seeking advice on how to train their next generation members, so they would be well-prepared owners and leaders.

 Development, on the other hand, is an ongoing pursuit, with no end point.  While one may work on development of leadership skills, leadership will never be fully mastered.  There are always opportunities to learn ways to become a better leader.  So, while preparing the next generation is important to the perpetuation of a family enterprise, we shouldn’t forget the importance of the ongoing development of the current generation. 

We know that the best way to perpetuate a desired behavior in a younger person is to model that behavior.  The old adage “Do as I say, not as I do”, is NOT a recipe for success. 

If you are a member of the current generation of family business leaders and owners are concerned about the next generation, consider what you can be doing to develop yourself.  Ask yourself the question – “What could I work on that would help me be a better mentor and teacher for the next generation?” “How could I model the behavior that I hope to see in them?” By expanding the focus of your education programs beyond those that come after you to include yourself, you are setting the best example of what you hope for – owners who are constantly thinking about how to develop themselves.


The Roles and Responsibilities of Beneficiaries

Norbert Schwarz
Norbert Schwarz

Trusts are important tools when planning for the continuation of family ownership into future generations. While trusts are often effective in tax and transition planning, family and business issues can emerge when little is done to educate beneficiaries about their roles and responsibilities.

The following are suggestions for minimum education that should be provided to beneficiaries, they need to:

  1. Understand why the trusts were set up and the governance processes by which they are overseen.
  2. Have a basic understanding of businesses owned by the trusts, and the processes by which they are governed.
  3. Know how to manage personal finances responsibly.
  4. Be educated on how they can become productive and knowledgeable stewards of their heritage.  Help them to think of how, even as beneficiaries, they can add value.
  5. Develop the habit of thinking in terms of multiple generations, and appreciating the role of ‘steward’ of wealth.
  6. Get help and support to establish an effective decision making process at the family and beneficiary level.
  7. Understand the basics of business finance.
  8. Develop a real appreciation for the importance of confidentiality.
  9. Support those who have been entrusted with governing the family business and the business of the family.




3 Different Audiences for Family Business Education

Stephanie Brun de Pontet

In a previous article on family business education, Amy Schuman and I suggested one critical task in planning education is to ‘Clarify your Purpose’ – and an important related construct may be ‘Think about your Audience’.  While there are many possible ‘audiences’ – the following three have very different ‘learning goals’ – yet all are very important, and investing in these individuals’ education will serve the long-term health of the family and the business well:

1) Those who aspire to leadership roles in the business – Education programming to support this purpose should be done in close collaboration with your HR department, and should also seek input from other key leaders in the business who will provide important insight on the skills and experiences that aspiring managers and leaders of the company require.  This learning program may include encouraging family members to pursue certain kinds of academic credentials or hands-on experience elsewhere, it may include summer or other short-term projects or internship opportunities at the business, and it may include comprehensive career planning within the company.

2) The next generation of owners – We often find families benefit from setting up a ‘next generation’ group that engages in regular learning about the roles and responsibilities of ownership.  Before young adults even come into ownership it is helpful for them to gain basic knowledge of the business they will own, learn skills like reading financial statements, learn about topics like ‘taxes’ and ‘wills’ – two realities that will be far more complex for them than for their peers, and begin to understand the importance of stewardship, or the responsibilities that come with the good fortune of ownership.  Not only does this group have similar learning needs, they also need to learn to make decisions together, so the process of working and regularly meeting together to learn – can provide an important benefit of bonding this group in addition to getting them used to collaborating.

3) Those who marry into the family – Marrying into a business-owning family can be daunting and is sometimes fraught with emotional landmines.  Families in business together are often close-knit, have many traditions of togetherness, and have all been brought up with this company in their midst, so they may not see the business-focused things they do as atypical.  A new entrant to this family must gain acceptance – but will be at a serious disadvantage of not knowing the company as well, and may fear that if they ask questions some family members will accuse them of putting their nose where it doesn’t belong.  Therefore an education program is an important way of providing some basic knowledge of the company to these new family members, while also giving them insight into family traditions and shared values to help them feel accepted and well integrated.


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.


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.