Tag Archives: family businesses

01/17/16

You Are So Emotional!

Yes, I am emotional. l am your sister, brother, son, daughter, mother, father, another family member. We not only work together, we grew up in the same family. We share common experiences and emotional history–ingrained touch points that can trigger easily. Because of this familiarity, emotions can spill over into a family business much more often than would be acceptable in a non-family business.

In themselves emotions are not bad; they are valuable. Their energy drives the human psyche; they serve as social signals. When funneled properly emotional energy can be used to achieve significant positive outcomes. Unbridled, emotions can cause untold devastation.

Denying one’s emotions or discrediting those of others is destructive. It is important to cultivate an emotional intelligence to recognize our own and other people’s emotions; to discriminate between different feelings and label them appropriately. We are then better equipped to manage our thinking and behavior to maintain harmony in our families and success in our family enterprises, especially during times of increased stress.

Emotional intelligence is so vital to the success of family businesses that as part of my Family Business Management class at Baruch College, City University of New York, I have students assess their own level of emotional intelligence, and – since we can increase our capacity for emotional intelligence – develop a plan for doing so for themselves.

01/9/16

Family-First or Business-First Revisited

In an earlier blog posting I wrote about distinctions between a family-first and a business-first business. Family-first promises employment to family members based on the family relationship. Business-first promises employment based on the needs of the business and capabilities of the individual; family relationship is secondary.

The question is asked whether family businesses are more sustainable when their focus for growth is placed on the business or on the family. While acknowledging that the health of both are important to multi-generational success, research on family businesses suggests that shifting focus for growth to the family level results in greater entrepreneurial activity and trans-generational value creation.

Said in another way, a family-business is a family focused around a business. There is potential for greater long-term value creation in a business-family that represents a number of businesses centered around a family entity.

01/3/16

Your Job Is To Prepare The Next Generation

In his influential work, The E-Myth Revisited, addressing small business owners, author Michael E. Gerber stated: “Simply put, your job is to prepare yourself and your business for growth.”

Addressed to the head of a family business this admonition applies in modified form: Simply put, your job is to prepare the next generation for multigenerational growth.

Wishing you happiness, health and prosperity in 2016.

12/24/15

A Family-Business New-Year’s Resolution

In the blink of an eye another year has passed, and resolutions for 2016 may be creeping into our thinking.

The closing of the year bestows a blessing; it encourages reflection–pressing us to review our individual accomplishments, our persistent challenges, what we are grateful for, what more we hope to accomplish, and who we would like to become as a person. Equally it affords an opportunity to reflect on the future of our family business and its significance to our families and ourselves.

Here are some practices inherent to successful multigenerational family businesses that you might resolve to begin in 2016:

  1. Devote time to better communication within the family
  2. Commit to professionalizing your business – working on it rather than just in it
  3. Establish a family council
  4. Develop a family hiring and employment policy
  5. Begin the discussion of succession
  6. Hire outside expertise
  7. Create a strategic plan

Wishing You a Happy and Prosperous New Year!

12/4/15

The Best ‘Family-Business’ Leaders are Constant Learners

In their article The Best Leaders Are Constant Learners, published in Harvard Business Review  Kenneth Mikkelsen and Harold Jarche write that today’s business leaders must make meaning of a playing field that is constantly changing shape.

A valuable axiom for creating successful family businesses is that next-generation leaders need to keep their eyes on the future, while respecting the past. The challenge is perhaps never more trying than for those family businesses where past business practices have been successful and family traditions are strong.

“Sustainable competitive advantage,” Mikkelsen and Jarche write, “now depends on having people that know how to build relationships, seek information, make sense of observations and share ideas through an intelligent use of new technologies.”

In family businesses today, active application of this strategy is incumbent on the both the younger and the senior generations in order to maintain multi-generational success. And it works best when all generations are helping the others meet the challenge.

11/21/15

The Not-Ideal Path

Seth Godin recently wrote a blog post titled Natural Light. http://sethgodin.typepad.com/seths_blog/2015/11/natural-light.html.

In it he describes two ways of making things. One way is to tightly control conditions. To ensure consistently of outcome, pre-process the inputs so that all raw materials are precisely the same every time.

The other way Godin calls “the path of natural light.” Take what you get. “Embrace the idea that the conditions will never be ideal, which of course makes them always ideal because the thing about natural light is that whatever it is, is.”

My experience is that raising children and integrating them into your family business is more often successful when the path taken is the way of natural light. The differences that exist between and among you, your children and other family members are part of what makes a family business succeed.

To achieve this outcome requires participation in creating a vision for the future of the family and the business under the leadership of the next generation—and willingly relinquishing control of the results.

11/14/15

Developmental Stages of Multi-Generational Family Businesses

A few weeks ago I had the pleasure of hearing Lena Jungell, a fourth-generation member of The Fazer Group, speak at the Fall 2015, Global Family Business Event hosted by the Baruch College, Lawrence N. Field Center for Entrepreneurship.

In her talk, Ms. Jungell presented elements essential for the growth and sustainability of a multi-generational family business. In my last two newsletters I touched on three of these: Vision, Values and Mission.

Ms. Jungell presented a fourth critical element–outlining the developmental stages of her family and its business across generations:

  • First generation: Built the business
  • Second Generation: Lived with and worked in the business
  • Third Generation: Worked in the business and established business-governance structures
  • Fourth Generation: Developed family-governance structures
  • Fifth Generation: Learned the business- and family-governance structures
  • Sixth Generation: Is already participating in the business while the fifth generation governs.

This pattern is fairly typical of family-business succession. I believe it is representative of a business that successfully evolves into a multi-generational enterprise without an initial intention to do so. Recognizing the pattern can facilitate the growth of any business family interested in multi-generational success.

11/7/15

Values, Vision, Mission: The Bedrock of Family Businesses – A Real-Life illustration

Last week I wrote about having attended the Fall 2015, Global Family Business Event hosted by the Lawrence N. Field Center for Entrepreneurship at Baruch College, where I heard a talk by Lena Jungell, a fourth-generation member of The Fazer Group.

An international, family-owned-and-run firm based in Finland, The Fazer Group proudly produces top-of-the-line bakery, confectionery and biscuit products as well as food and café services

Lena spoke about one of the essential components of family-business success and longevity, “The Development of an Owners’ Vision” Today I will write about two other equally important components–values and mission.

Microsoft Word - Document2To clarify what I mean by these three terms: Your vision is something you can see as a result of your efforts. Your mission identifies the action of achieving the vision. Values are those qualities, behaviors and points of view that a family holds to and deems important for the guidance of its members and its business.

In working to fulfill its mission —To Create Taste Sensations–guided by its vision–responsible business growth with a strong focus on long-term development–the Fazer Group stands firm on the bedrock of its values: Passion for the Customer; Quality Excellence, and Team Spirit. http://www.fazergroup.com/about-us/we-create-taste-sensations/

These values are the basis of all of their corporate strategy processes, ethical principles, responsible environmental standards, management systems and more. http://www.fazergroup.com/responsibility/our-responsibility/

This solid footing along with open articulation of their values is, no doubt, integral to the Fazer Group’s success as a thriving and growing sixth-generation family business looking into a prosperous future. As such, The Fazer Groups is a real-life illustration that demonstrates the long-term possibilities inherent in family businesses.

Next week I’ll write about the evolution of the Fazer-Group from its first generation into its sixth, and explore its business- and family-governance structures.

10/22/15

Differences and Consensus

In his October 4, 2015, NY Times column “Corner Office” Adam Bryant presented his interview with Gary B. Smith, CEO of the Ciena Corporation: “Gary Smith of Ciena: Build a Culture on Trust and Respect.” In it Smith shares some of his history, his early influences and how his views changed with experience. In last week’s blog I wrote about Smith’s understanding that “it’s all about people.”

 And of course, with people there will be inevitable differences of opinion. Smith says that this is healthy. These differences should exist. But ideally, he aims at consensus. “I’m a great believer in getting consensus,” he says. But he knows that consensus cannot always be reached, so “you’ve got to say, O.K., that’s good enough.”

What’s critical he says, is that once agreement has been reached the leadership team must be synchronized and the agreement is communicated down the ranks of the organization so that all are moving in the same direction.

One of my first clients started our engagement by stating: “My dad has fired me twice.”

The point of contention was over my client’s approach for implementing a strategy. His father would neither acknowledge nor respect his son’s difference of opinion saying: “any way you do it is ok, as long as it’s my way.” Clearly there was no working toward a consensus.

Perhaps for the health of the organization it might have been easier, in the short run, for the father to fire his son, thus avoiding having the operation of the business skewed by trying to follow two conflicting directions. But for multi-generational longevity, an opening must exist, for at least a partial consensus.

To ensure multi-generational success, members of the next-generation need to be granted a degree of autonomy, allowing them to acquire leadership skills and giving them the invaluable opportunity to learn from their own mistakes.

Handling this transition is one of the most difficult challenges facing family businesses.