Tag Archives: Seth Godin

03/14/20

Family Business Under New Management

Seth Godin recently posted a blog entitled: Under New Management. In it he wrote:

“That’s a pretty silly thing to write on the store window.

It says to loyal customers, “watch out, someone new is in charge.”

And it says to strangers and the apathetic, “this place failed.”[1]

How often do you see a sign on a store reading: “Family Business: Under New Management?” We rarely do. But what would it mean if we did?

The most likely interpretation is that the business transitioned from one generation to the next. That’s significant. But there are other important ways a family business can come to be under new management.

The three-circle model of family business developed by Renato Tagiuri and John Davis in 1978, describes three interdependent and overlapping components of the family business system: the business, the family, and the ownership. In each of these, new learning, under new management can occur every day.

Business owners recognize improvements can always be made to their management and operational practices. But the family and ownership subsystems are often overlooked.

We have come to recognize that multi-generational success of family business is dependent upon a co-evaluation and perhaps “new management” of each of these systems, and their complex interactions.

Godin continues: “If you think about it, though, every day, every store is under new management, if we define ‘new’ to mean, “we learned from what happened yesterday.”[2]

[1] Under New Management. Retrieve from: https://seths.blog/2020/03/under-new-management-2/

[2] Ibid.

11/2/19

Generosity And Connection

Sitting down to write today’s blog piece I was thinking about several concepts related to family business. Among these, the difficulty of choosing the right successor, the significance of shared family values, the importance of stewardship (the passing on of family assets—wealth, reputation, emotional well-being, spirituality—in better condition than when you received them.)

As I do at times, I turned to others for ideas. In this case I found what I was looking for in a blog by Seth Godin.

Godin’s article Bread and Book, is not intended to be a comment on family businesses. But it’s one of the best—and more tragic—stories I’ve seen of succession, family values and stewardship https://seths.blog/2019/10/bread-and-books/. It’s a story of world-famous baker Lionel Poilâne and how Godin and Poilâne met and became friends.

Describing what he learned from his time with Poilâne, Godin wrote: “Ideas, bread and books are all the same–they’re better when they’re shared. The posture of generosity and connection replaces a mindset of scarcity, and Lionel modeled this philosophy every day.” From his friendship with Poilâne Godin learned about the magical intersection between generosity and idiosyncrasy.

Tragically, Lionel Poilâne and his wife were killed in a helicopter crash, leaving behind two teenage daughters. It’s here that the story enters the realm of family business.

The elder daughter, Apollonia, immediately stepped up and took over the running of the bakery. She’s made a success of it, with no diminution of quality. And she’s recently published a book.

In Poilâne: The Secrets of the World-Famous Bread Bakery, Apollonia relates her family’s story. It begins with her grandfather and now flows to the fourth generation. She writes: “The seeds of this book were planted by my father and mother in my sister and me. They are seeds of passion, determination, and love for our craft. My sister, Athena, helped me germinate those seeds, and with the birth of her son, we now have another generation with whom to share our family story.”

Family values, succession, stewardship. It’s all there for the learning,

10/12/19

On Taking Initiative

“The only way to get initiative is to take it. It’s never given.”[1]

That’s the statement Seth Godin begins with in “Initiative” his October 10, 2019, blog entry. Initiative would seem indispensable for success in business. But I’ve often found it lacking among family-business leaders when it comes to planning for a multi-generational future.

Over the course of my career as a family-business consultant, I’ve spoken with heads of third- and fourth-generation family businesses about their plans for transitioning the business to one of their children. I’ve asked what they thought the business and the family might look like when their children are leading them.

In answer to this question I’ve been told by that their focus is on surviving, one day at a time. They told me that thinking about the future is not possible right now. Of course, I’m not arguing with the importance of their assuring survival. But I’m convinced that for them, thinking about the future is less ‘impossible’ than they say, and more ‘uncomfortable.’

That’s unfortunate. And it takes initiative to go beyond this. But…

“From an early age, most of us were taught to avoid it. Do your homework. Take out the trash. Wait to get picked. Wait to get called on. Become popular. Fit in. Maybe stand out, but just a little bit. Failure is far worse than not trying.”[2]

Successful multi-generational family businesses recognize the need for developing next-generation leadership early. They’ve built in the ‘initiative’ to do so.

The initiative for planning succession in a family business starts simply—with a conversation. Then another and another. These are big conversation to be sure. Together the family learns about itself, its values, its strengths and weaknesses, and about its vision for future generations.

These conversations can be daunting. They can be uncomfortable. They can be confusing. But to build generations of family-business survival and success they must be initiated.

 

[1] Seth Godin. Initiative. https://seths.blog/2019/10/initiative/

[2] Ibid.

04/20/19

Impermanence And Continuity

Construction on the Cathedral of Notre Dame was begun in 1163 and completed in 1345. Today, 856 years later, it stands in its home city the awesome result of 182 years of hard work, dedicated intent, inspiration, innovation and Gothic artistry of the finest quality. Last Monday, April 15, 2019, this center of devotion and indescribable beauty caught fire and underwent millions of dollars In damages.

It’s a tribute to its unquestionable and continued value that those millions of dollars for repairs have been pouring in. Albeit among controversy as to just how to accomplish the task, the cathedral will be restored.

Family businesses too can have long histories. They too have been built, over centuries, by devotion and dedication, innovation, inspiration, hard work, high standards and pride.

Japan’s Hotel Hoshi Ryokan is the world’s oldest family business. It was founded in 718 and is now, more than 1300 years later, under the management of its 46th generation of family members. The family’s watchwords: diligence, humility and resolve. https://www.ho-shi.co.jp/en

But is it permanent? Arguably nothing is. Paris’ historic cathedral will never again be exactly as it was on that day, centuries ago, when it was completed. Hoshi Ryokan has unquestionably undergone many changes to ensure continuity over the centuries—to keep up with the times; to add value that attracts today’s visitors. Change, whether accidental or intended, is perhaps the only constant.

Most family businesses are far from permanent. It’s an accepted fact that most do not last beyond their third generation. For them, that which built a monumental cathedral and a 46-generation business is missing.

Contemplating all this, I stopped to read Seth Godin’s blog entitled Impermanence. https://seths.blog/2019/04/impermanence/. With regard to whether the future will or will not turn out the way we hope it will, he offers the following:

“We have much less direct control over the future than we hope, and that it will always surprise us.”

“We can’t control the future, but we can bend it. And we can’t freeze the world as it is, but we can figure out how to be a part of it.”

To build a family business with a basis for continuity, one can take inspiration from those long-ago builders who intended a great cathedral; saw it standing complete after nearly two centuries of continued work; inspiration also from the Hoshi Ryokan family, whose values transcend time. Accept surprise, and intend your business to be part of the future, both permanent and impermanent.

09/8/18

Full Stop—The Fear Factor

 Better not to hire a coach or go to a therapist or even pick a doctor, because you might discover that you’ve been doing something wrong.[1]

Many times I have spoken with principals of family businesses about their plans for transitioning to the next generation. Many times I have seen that they do not understand how to do this successfully. They listen to what I have to say, but do not ask for help. I have seen heads nodding in agreement about the benefits of hiring a professional with family-business expertise to guide them and their family in achieving a multi-generational family business, and reaping the rewards of having an established multi-generational family. And too frequently, I see no further action taken. It’s sad. because I know the difference that an expert in family-business best-management practices can make.

In his blog article, The Overwhelming Fear of Being Wrong, Seth Godin suggests that fear engendered by uncertainty stops forward action. In the case of family-businesses leaders, fear of asking for expert help may stem from not knowing how to assess the guidance being provided. There may be fear that other family members may object; that they personally may be supplanted; that they may be seen as being wrong in hiring an “outsider.”

Most family businesses do not survive beyond their third generation. Their failure is largely due to a lack of understanding of the best practices and unique dynamics of family enterprises. Family-business consultants have the know-how to guide your family business safely through this critical transition. When it’s forward motion or stop, perhaps it’s best to overcome the fear of being wrong. and ask for help.

[1] Seth. Godin. The Overwhelming Fear of Being Wrong, https://seths.blog/2011/07/the-overwhelming-fear-of-being-wrong/

07/27/18

Defining Productivity For Family Business

In a recent blog post, entitled Business/busyness https://seths.blog/2018/07/busyness/ Seth Godin states that what matters in business is the question: “did I spend my day producing enough benefit for all the time invested?”

Seth is asking an important question; I recommend that you read the entire blog post.

Further into the post he provides a suggestion for answering the question: “Once you know what you seek to produce (not an easy task), add up all the time you spent to create it.” While not exactly what he was writing about, I fixed-on the phrase “once you know what you seek to produce” and related it to family enterprises.

It is not uncommon for a family business to come about accidentally. One starts a business, gets married; has children. The children help out and eventually assume control of the business. If things go well the business grows and the second generation passes it on to their children, likely in the same way they received it. They in turn assume responsibilities and eventually control the business.

In this scenario the business is looked at in present time, and productivity is largely measured in the context of the business’ balance sheet. Family is important; but as an entity separate from the business itself. There is not yet generational thinking and recognition of a family-business legacy.

With each generation as they grow, family businesses become more complex. The simple mechanism of succession described above no longer works. For the business to continue now requires planning. It requires a longer view; an intention to produce a multi-generational family enterprise. “…once you know what you seek to produce” is key. Intention aligns family members, resources and practices in the direction of a shared goal.

12/2/17

Challenges To Creating Change Initiatives In Family Businesses—Two Kinds Of Practice

Recently I’ve been writing about the challenges of creating change initiatives in a family business where the older generation is in charge. One of Seth Godin’s recent blogs, Two Kinds of Practice, http://sethgodin.typepad.com/seths_blog/2017/11/two-kinds-of-practice.html touched on what I see as a critical aspect of this inter-generational dynamic.

According to Godin, in the first kind of practice, we learn to play the notes as written, coming as close to a specified standard of perfection as we can. Applying this to family business, we learn to conduct business as the generation in charge does it. Practicing this way, Godin adds, we can become very proficient.

Learning to play the notes as written is sound advice. It respects the past while helping to develop an understanding of the family’s values and why we do business the way we do. The business environment though, is in constant flux—today more so than ever. The successful business will keep an eye on the future and have a mindset that embraces innovation.

The second kind of practice Godin describes as being “more valuable but far more rare.” This he says is the practice of failure. “Of trying on one point of view after another until you find one that works. Of creating original work that doesn’t succeed until it does.”

Founders of family businesses sometimes forget that their know-how was gained from their own painstaking efforts that resulted in errors early in their careers; or perhaps are reluctant to return to those times of uncertainty and anguished miss steps. But when founders seek to maintain their own comfort by denying this process of learning by trial and error to members of the next generation, their actions may lead to a painful decline of both the younger generation family members and the business; a decline fed by an inability to adapt.

Some families build their businesses on the practice of failure as a value. For them innovation is seen as a key to growth. But they are rare. In the majority of business families, the natural conservatism of the generation in charge is at odds with the natural forward-thinking innovative attitude of youth.

These two sides for different reasons are often blind to each other. And being blind, a clear vision for the future of the business is compromised. At this point it becomes wise to seek the help of an impartial outside observer. An expert family-business consultant can help take the blinders off, reawaken the incumbent generations’ memories of struggle and failure, remind them about how they succeeded, and set the new generation free to do the same.

10/14/16

Dreaming, Intention and Process

If your dream is to see your children carry on the family business, you must both look at every day with that intention, and enjoy it as a process. And, as Seth Godin writes in a recent blog: “…the end result is always at the end of an arc, always the result of many steps, of earning trust, of building a connection.” http://sethgodin.typepad.com/seths_blog/2016/10/now-is-never.html

09/30/16

Decisions—Instruments of Movement

When struggling with a theme for this blog, I often seek inspiration from Seth Godin, well-known author, entrepreneur and marketer. In a recent blog entitled The ripples, Godin opens with: “Every decision we make changes things.” http://sethgodin.typepad.com/seths_blog/2016/09/the-ripples.html

It follows therefore that every business decision we make changes the business. It can be large–move the business from Brooklyn to Florida–or it can be small–meet a casual contact for coffee at Starbucks. The apparent size of the decision does not foretell the size of the consequences.

Some decisions are made for the short-term, some for the long-term. But decisions are instruments of movement… and what is seen initially as a short-term decision can start a series of dynamic changes that continue far into the future.

At the end of the same article, Godin asks: “How did you get to where you are? Who is going to go even further because of you?”

It may be useful in the conduct of our day to day business to keep this in mind. What decision that you made today, however small and ordinary, may bring your business and your family further than you can imagine? For generations.

02/26/16

Working With Siblings

In a recent blog entry, Seth Godin wrote about options for finding, leading and motivating employees in a small business (he used the term “tiny business”). He characterizes three different management styles, what types of employees work best in each, how they work together, how they relate to being led: “a team of equals, “fellow travelers,” industrialized employees.” He sets forth both advantages and pitfalls inherent in each option.

http://sethgodin.typepad.com/seths_blog/2016/02/managing-the-very-small-business.html

These same types–equals, fellow travelers, employees–will exist in family businesses staffed by siblings and/or cousins whether in leadership or subordinate roles. Understanding the distinctions, their pros and cons will go a long way in strengthening family relationships and the business itself.

Are siblings in your business equals, fellow travelers or employees?