Author Archives: Rick Raymond

05/14/16

It Is About Family

In a recent blog entry I reported my experiences at the annual conference of Attorneys for Family Held Businesses (AFHE). Through its membership of multidisciplinary family-business advisors, AFHE promotes the well being and sustainability of business families, and recognizes that family businesses can only be as healthy as the families themselves.

This theme echoed resoundingly within me the following week while I was participating in a program with Defy Ventures http://defyventures.org. Defy helps individuals with criminal histories develop entrepreneurship skills and establish sustainable lives after incarceration.

I was part of a group of seventeen volunteers who went to meet thirty-five inmates in a Federal prison. All of the inmates had been part of Defy’s Entrepreneurs in Training (EIT) in-prison program. We volunteers were there to offer them exposure to successful business people and business advisors, to help them develop social and business skills, to prepare a resume and learn the processes of business formation.

The emotions I experienced during the five hours we spent with the prisoners were intense. I was overwhelmed with the gratitude of the EIT participants. We began with an exercise designed to help us experience empathy for one another and to build community. It was here that the significance of family and a new perspective on AFHE’s mandate for helping business families came to light.

Facing each other–volunteers on one side and EITs on the other side of a taped line–we responded to a series of questions: “Who has ever been arrested ?”. All of the inmates stepped to the line, as did number of volunteers. Empathy crossed the line in both directions. “Who has done something illegal but not been arrested?” More volunteers walked up. “Who graduated from high school?” “Who has a college degree?” No inmate stepped to the line in answer to this. “Who was arrested as a teenager?” “Who experienced abuse as a child?” “Who does not know his biological father?” “Who spent time in foster homes?” “Who has a parent who used illegal drugs in their presence?”

Overwhelmingly it was the presence or lack of a healthy family that most separated the volunteers from the EITs. The absence of healthy family relationships was revealed as a formidable factor in devastating the lives of the inmates. Similarly, the presence or lack of well being of the family can influence their businesses’ failure or success.

05/4/16

Fifth Generation and Almost Out

Family enterprises that have continued into their 5th generation often have processes in place that helped them overcome the challenges they encountered through the years. They have a vision for the future. They have a declaration of shared values. They have governance structures, such as a family council, an external advisory board. They have a forum for family members to discuss the family in the context of the business. They have gained foresight and have learned how to address situations where family members undergo a loss of capacity. They have a funded growth plan. They have an established mindset that accepts the need to turn leadership responsibilities over to the rising generation; and the incumbent leadership has their retirement plans in place.

Often–but not always.

Here’s the story of Yuengling Brewery, an “almost casualty” rescued by a fifth-generation prodigal son.

http://www.inc.com/dick-yuengling/how-a-father-son-rift-almost-destroyed-yuengling-brewery.html

04/29/16

Reality Is Bigger

Last week I attended the annual conference of Attorneys for Family Held Enterprises (AFHE). While there, I had the opportunity to hear speakers from a range of professional disciplines: family business advisors, financial planners, psychologists and attorneys.

I was particularly impressed by the clarity of the presentation entitled ‘Engaged Ownership. More Effective Governance for Multi-Generational Family Businesses’ given by Amelia Renkert-Thomas, former CEO of Ironrock Inc., her family’s 5th generation manufacturing business and founding partner of Renkert Thomas Consulting LLC.

In her presentation Ms. Renkert outlines commonly held assumptions about family business and counters them with realities. Here are selected bullet points taken from her slides:

Assumptions

  • Making money is the primary objective
  • Succession is about who will run the company
  • Shareholders are primarily interested in dividends
  • Continuity is the preferred outcome

Reality

  • There is more at stake than money
  • Succession is about preparing for multiple roles
  • Shareholders are primarily interested in shared purpose and vision
  • Continuity of core capital, not necessarily the business

All of these points are ‘tip-of-the-iceberg’ statements, the results of study, thought and experience. They invite investigation, discussion and action. What are your thoughts?

04/23/16

The Word From D.C.–It Takes a Team

I am writing this blog piece while attending the annual conference of Attorneys for Family Held Enterprises (AFHE) in Washington D.C. Each year’s conference brings together a multidisciplinary group of family business advisors, financial planners, psychologists and attorneys–representatives of AFHE’s wide membership base.

One of the organization’s underlying missions is to promote the well being and sustainability of business families. AFHE understands that family businesses are complex because families are complex; that seeing their challenges as business issues alone and addressing them from the perspective of any single professional discipline will fall egregiously short of achieving this aim. The best success comes from the collaborative efforts of experts.

04/14/16

More Than ‘Do No Harm’

I saw my internist recently, and we started to talk about a book written by neurosurgeon Henry Marsh, entitled “Do No Harm: Stories of Life, Death, and Brain Surgery.” In it the author gives a viscerally disturbing account of what can go wrong in surgery and with the brain itself. He speaks about risk, he speaks about his growing experience and skill and he speaks about caring.

During this conversation my mind jumped, by association, to a principle of family business called stewardship.[1]

As a steward of my family business my leadership role is to receive the business from my predecessors, grow the business, the family wealth, the family itself, and then pass this multifaceted inheritance on to the next generation in better shape than it was in when I received it. More than do no harm, stewardship of a family business aims at building health and vigor and creating an ever greater family legacy.

The challenges of stewardship change as the business develops. The responsibilities of sole proprietorship differ from those carried by the head of a business with family members working in management or as employees. It changes when the founder’s children are born, and changes too when brothers, sisters and cousins become part of the picture.

At The Family Business Leader™ we help you meet the varied challenges of family-business stewardship and bequeath a healthy and vigorous inheritance to your family’s next generation… and the next.

[1] According to The Family Business Leader™: “Stewardship is defined as “a perspective that founding family members view the firm as an extension of themselves and therefore view the continuing health of the enterprise as connected with their own personal well-being.” http://www.familybusinesswiki.org/Stewardship

04/6/16

Precarious Placement

Positioning the second generation as managers, responsible for overseeing the processes and systems established by the founder is a not-uncommon practice in family business; but this custom sets up a potential problem. The second generation never develops the entrepreneurial skills necessary to take the business into the future during the time of their leadership.

04/2/16

Pulled Into the Future

The leadership, vision and entrepreneurial talent of the founding generation of a family business may be very different than that needed in subsequent generations; and installing a successor who is a copy of the founder may result in the failure of the business to change with an evolving market environment or the growing needs of a larger business.

For example, the business may now have more need of leaders who develop collaborative relationships than those who get things done by themselves, or of strategists who find new opportunities as the size of the family grows.

“Respect the past while keeping an eye on the future.” This important family-business axiom, together with a phrase I read twenty years ago in “Breaking Point and Beyond: Mastering the Future Today by George Land and Beth Jarman—“allow yourself to be pulled by the future”–are potent strategies for expansion and growth.

03/26/16

The Networked Age–What Can LinkedIn Leaders Learn from Family Businesses?

I recently heard Jeremy Stover, LinkedIn’s head of leadership management and executive development, speak as part of a panel discussing the state of executive coaching. I asked him about the success of leadership coaching within LinkedIn, and he directed me to an article he wrote in December of 2105 entitled “Social Leadership in the Networked Age.”

In it Stover wrote that when LinkedIn leaders were asked about business challenges and opportunities they see, a theme became clear: “the phenomenal pace and relentless rate of change.” In his view a new type of leadership development is required at both the organizational and the individual levels to address these challenges.

“The Networked Age is here…” Stover declares. And it calls for leadership skills that go beyond those of emotional intelligence, authenticity, executive presence. clarity of vision and communication. While these will always be essential, they stop short of what is needed now–leaders who have a network perspective and understand the dynamic web of connections that impact their work, their leadership, and the leadership culture of their organization.

I agree with him, and I chose the title of this blog post because I believe successful family enterprises have recognized and made use of complex and long-standing networks connecting family- and non-family stakeholders across many generations.

03/18/16

Giving Your Best

“My grandfather said to me, ‘Give the world the best you have, and the best will come back to you.’[1]

Upon reading this, a particular family-business story came to mind: A friend of mine, the youngest sibling in a second-generation family business was frustrated by his father’s strong-minded control and by his older siblings’ apparent apathy. He saw that rather than giving their best, his siblings were showing up for work daily but purposefully only “treading water” until they were able to take control of the business.

My friend had left the business once and was about to again because he was unable to give his best within the confines of the family situation.

This complex situation might well benefit from counseling. But my purpose in writing this blog entry is solely to draw awareness to the lost potential for multi-generational family legacies when family members are not raised in a culture of giving their best in whatever role life asks of them.

________________

[1] Simmons, Annette, The Story Factor, Secrets of Influence from the Art of Storytelling, p. 9, Annette Simmons. Basic Books. 2001.

 

 

03/11/16

The Familiness of Your Family Business

John, CEO of the firm, tells Robert that they are letting him go because he was coming up short on the competencies needed for his job.

John turns away and then back to face Robert. He says: “Son, I heard you lost your job. How can I help?”

Familiness in a family business is that unique set of resources which arise from the interactions among the family system as a whole, the individual family members and within the business itself. It describes a behavior that supports the family as a whole, the individual members and the business. Where it exists, it constitutes a competitive advantage.

In this story the strength of the family commitment is evident. John recognized and Robert understood that what was good for the business was good for the family, and equally what was good for the family was good for the business.

Familiness embodies the family culture, the reputation of the company, confidence and communication among family members, entrepreneurial spirit, management of non-family employees, and trust. It is what we compliment as the hallmark of a model family business enterprise.