A keynote speaker I heard twenty years ago, who promoted himself as a ‘futurist’, made the point: “don’t worry about the trash, we’ll find a way to deal with all the trash as better recycling technologies arise. The thing you’ve got to worry about is the data. We’re all going to be drowning in information.”
Turns out he was spot-on.
In enterprising families, attention to information flow seems to be on the rise. So too are family meetings, family councils and boards of directors are becoming more disciplined and more thoughtfully and strategically comprised. *
The challenge for leaders of families and family firms is building the processes by which family members are educated and enlightened so that they can understand the data they’re receiving and apply it to metrics which indicate the degree to which the family and its enterprise(s) are reaching its goals. Doing so results in more fully aligned shareholder groups and, as any CEO with multiple family shareholders will tell you, an aligned shareholder group makes the CEO’s job much easier. In my experience, these are the same families that are more likely to achieve their business goals.
We’d love to hear from you – what steps are you taking to keep family shareholders both aligned and informed?
Family meetings are fundamental to the health and happiness of family businesses. As family business consultants we are frequently invited to help families learn how to have productive family meetings as well as to assist in creating family councils. Other times we are asked to facilitate and educate these meetings for families who sincerely want their legacies to last.
Recently, members of a second-generation family business invited me to work with them. They are exceptionally passionate people who take great pride in their family and are passing on their tradition and legacy to their children. The reason they brought me in was because, as one of the brothers would later explain: “We are all chiefs of our own tribe, and we need to become one nation.” Although the family gathers frequently for holiday celebrations, they rarely get together to talk about their business. Over a period of two months we had a series of four meetings focusing on improving their communication skills, helping them understand the different ways they think, examining their different leadership styles, and exploring ways of resolving conflict.
When we debriefed I asked each of them two questions: First, what has been the most surprising thing you’ve learned about each other? One said she was amazed that they all think so differently. Another was surprised at how willing all of the family members are to work together, and still another said he was heartened at how much wisdom they all had and their ability to share it with each other.
Second, I asked: What has been the most significant thing you’ve learned? They said it is honoring everyone’s unique style of thinking, communicating, and leading. One sister said that by having these discussions concerning how they think, what had been invisible is now visible. Finally, one of the brothers said he learned to become more focused on the other person’s heart by really listening to what is being said.
Our work with this family continues, but it is obvious the family dynamics are beginning to improve in just two short months after four afternoon meetings. This is key according to the PricewaterhouseCoopers Family Business Survey just released. Based on interviews with over 1,600 families around the world, the survey is cleverly titled: Kin In The Game.
The results of the survey confirm what family business consultants have always known: family dynamics affect the success or failure of the family business. “If there’s unhealthy conflict between the family members, it will spill over into the way the business is managed and owned . . . Conversely, if relations with the family are healthy, the business is more likely to be healthy too” (page 5). Also according to PwC’s research, 71% of family businesses do not have any procedures for resolving conflict between family members (p. 33). Of those families who do have some way of managing conflict, 52% use family agreements, 44% use family councils, and 37% use third-party mediation (p. 32).
Investing time and money to improve relationships of family owners is a great investment in the future of the business. Creating a family council gives family owners the chance to manage conflict as well as to make family agreements. These meetings provide the perfect opportunity to have both a happy family and a prosperous business.