Tag Archives: goals

Siblings to Cousins: Ownership Goals for Growth, Risk, Profitability and Liquidity

Amy Schuman
Amy Schuman

In the transition from siblings to cousins, families are often called to define the ownership role for the very first time. In earlier stages, a relatively small family allows for more direct involvement of family owners in business operations and tends to put issues of ownership on the back burner.

It is at the cousin stage when ownership goes – frequently for the first time – to a significant number of family members with no direct involvement with the business. It is common for cousin owners to have minimal natural contact points with the business they now own. The majority of cousin owners do not have careers in the business, and some likely live a great distance from business operations.   There is much to understand about the ownership role  – and some excellent resources exist for further reading (see below). In this post, I’d like to focus on the opportunities contained within an ownership goal setting process.

Owners need to know enough about their assets to be able to set educated goals for their performance. What level of return is reasonable to expect? How much risk would be needed to achieve different levels of return, and what is our risk tolerance as an ownership group? What is a realistic expectation for growth of our enterprise at this point in time? What returns should we expect in terms of asset appreciation and liquidity?

A few of my clients have dubbed this goal-setting process “GRPL”, based on John Ward’s suggested four ownership goals of Growth, Risk, Profitability and Liquidity (see article referenced below).

Realistic family ownership goals will vary widely according to factors such as industry of business – age of business – location of business – and many others. But grappling with the GRPL goals allows a large, potentially dispersed ownership group to have a focus for their learning and involvement in their business as owners. In fact, ownership education can provide a clear mandate for the Family Council, which tends to coordinate shareholder education.  Ensuring the ownership group develops the knowledge they need to articulate clear and achievable ownership goals is an investment in the ownership, management, and family circles of the family business system.

In my experience, Boards of Directors welcome the ownership goal setting process with enthusiasm. Written and agreed-upon goals from owners makes the Board’s task easier, especially as independent directors join the effort. They know owners’ expectations, and can conduct themselves in the boardroom accordingly.

Some management teams may initially have reservations about the owners setting these goals.  As the management team is so intimately involved in every aspect of the business, they may question ownership’s ability to set realistic, informed goals for asset performance. However, if management has a role in educating owners about their industry and the company’s competitive position in the market, they usually becomes enthusiastic supporters of the process. Instead of having to worry or wonder if their decisions and actions are aligned with ownership’s expectations, management can now more easily evaluation their actions against stated ownership objectives. I’ve had CEO’s tell me that they sleep better at night, knowing more clearly the owners’ shared goals for the enterprise they have been entrusted to lead.

There is much more to explore in this regard. Hopefully this post has whetted your appetite to learn more. Please feel free to share your questions or experiences with ownership goal setting here, and to explore the resources below.

“What do Owners Do?”, John L. Ward, Families in Business Magazine, June/July, 2003

Family Business Ownership: How to Be an Effective Shareholder, January, 2011,  John L. Ward, Craig E. Aronoff, Stephen L. McClure, Palgrave/MacMillan

“Why Family Business Owners need a Job Description”, Jennifer Pendergast, Family Business Advisor, June 2010


There are many paths to greatness – the challenge is finding yours…

Stephanie Brun de Pontet
Stephanie Brun de Pontet

Over the years of my work with business-owning families I have had the privilege of collaborating with many successful individuals, whom I greatly admire.

  • There is the founder with an idealistic spirit, exceptional sales ability and sharp business instincts, whose greatest sense of accomplishment comes from never having laid off any employees – even in times of hardship.  Though he is the sole owner of his business, he seeks input, truly listens and builds consensus with others.
  • There is the hard-driving leader who has built a business on the strength of her work ethic and determination to ‘do the job right.’  While she drives all around her hard – all are clear that she drives herself the hardest.  Demanding and ambitious, she also mentors and develops all who come into her circle and devotes a tremendous amount of energy to her church and family.
  • There is the next generation young adult who always struggled in school yet persists to complete a degree, while working full time to learn business and develop more ‘practical skills.’  Not content to simply ‘fulfill the obligations’ of the family employment policy – he has worked for several years in a related business, developing industry contacts as well as knowledge he plans to bring back when he does eventually join his family’s business.
  • There is the second-generation leader whose intelligence and quiet resolve have allowed the business he owns with his brother to flourish where competitors have struggled.  Though revered in his industry he shares the limelight and all ownership decisions with his brother, and has comfortably transitioned out of the leadership role.

The point of these stories is to highlight that there is no one path to success in a family business, or anywhere else for that matter.  Sometimes we spend too much energy looking for ‘the formula’ for success – when in truth the search should be for your personal path.  For the most part, when people arrive at success it is because they have a vision of where they want to go with their potential, and then put one foot in front of the other towards that goal.  Make sure you are on the right path, because if you aren’t – no matter what you accomplish, you will not have achieved success for yourself.


The Importance of Mentorship

by Kristi Daeda

“I have had my 15 minutes of fame and enjoyed my time in the spotlight and walking at the head of the parade. I believe that to whom much is given, much is expected. I want to give back. I enjoy watching younger people learn and develop. By helping others, I may in a small way be able to influence the next generation.”

         – Jack Pycik, former CEO, in interview with FBCG Principal Steve McClure

In our work with families on succession planning, much time and effort is spent in considering how the next generation will be prepared to step into leadership roles in both the family and the business. One important piece of the puzzle for these emerging family leaders is mentorship.

Mentorship relationships take many shapes and sizes. Some are very formal, with agendas, regular meetings and development goals. Others are more fluid, with meetings as needed or when the mentee requests them. Some of these relationships include guidance and feedback on wide-ranging topics from career goals, to leadership, to professionalism, to family dynamics. Others are very focused, such as a CFO helping a young manager improve their understanding of company financial performance.

Mentoring Benefits All Involved

Regardless of the structure or content, both mentors and mentees can benefit greatly from a mentoring relationship. Some benefits of a mentoring relationship include:

For the Mentee:

  • Experience at building professional relationships, especially with senior staff/company leaders.
  • Support and feedback.
  • Regular focus on professional goal setting and long-term career thinking.
  • Sounding board on how to handle complex work issues and interpersonal challenges.
  • Direct access to advanced knowledge about the business and industry.

For the Mentor:

  • Personal enjoyment of helping another professional succeed.
  • Reaffirmation of professional knowledge and experience.
  • Increased perspective on other areas of the business, trends and challenges.
  • Recognition from superiors as an organizational leader and contributor to overall success.

Mentoring Can Greatly Accelerate Professional Development

The best business lessons often don’t come from textbooks, and our best wisdom often comes from someone who has learned the hard way.

When done well, a positive mentoring relationship can lead to much quicker advancement – not just in job title, but in key success areas like communication, leadership, collaboration, and business thinking. The experience of learning from a mentor’s successes, failures and hard-won perspective, with the opportunity to ask questions and work together to apply these lessons to one’s own day to day work, can create great leaps in learning.

A mentor can also be an advocate (“sponsor”) within the company, helping the mentee identify opportunities for growth and smoothing their path to advancement.

Mentors can be Impartial Advisors

Lastly, and perhaps one of the greatest advantages of mentorship within family businesses, is that a mentor is often viewed as impartial in a way that Mom and Dad are not.

When Mark hears that he needs to step up his communication skills from his father, that message comes with the baggage of the family dynamic, no matter how healthy it may be. The same message delivered by an independent third party can be received very differently. The mentor’s perceived disinterest allows them a unique position as trusted advisor, a plus for both the organization and the mentee.

It’s clear that mentorship is a powerful tool that carries a wide range of benefits for all involved. How might your family embrace mentorship?



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.


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.”


Key Questions for Non-family Managers

by Chris Eckrich & Steve McClure

Chris Eckrich
Chris Eckrich
Steve McClure
Steve McClure

A key non family executive once shared that he could help the owning family make a lot of money or grow their business if they would just tell him what they wanted him to do for them.  Conversely, we at times hear from thoughtful family business owners that they very much appreciate their non family leaders, and need their help to achieve company goals.  Ironically, it is not uncommon to hear both of these sentiments shared by owners and non family leaders from the same business.

Business owning families can help by exploring several key questions with their most cherished non family managers, such as:

1.     What do our key non family leaders believe are the family’s goals and objectives?

2.     What can non family management do to help our family achieve excellence as family business owners?

3.     How will we let our key non family leaders know that we appreciate their efforts and commitment?

4.     Are key non family leaders able to accurately report how they are appreciated by the family?

While some of us have clear answers to the above, the inability to answer these offers an opportunity for ownership to gain clarity and implement plans to communicate and gain alignment with key personnel.