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9 Common lies . . . Family Business Founders Tell Themselves

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9 Common lies . . . Family Business Founders Tell Themselves

1. Family members will appreciate the opportunities the family business provides.

2. We can keep the business separate from the family.

3. Our sacrifices demand loyalty . . . to the business.

4. I built it, they should follow my lead.

5. Lack of conflict is a sign the family is doing well.

6. Our family can avoid misunderstandings and hurt relationships.

7. Planning for succession means we don't need to think about "exit plans" or winding down the business.

8. You can't leave the family, but leaving the business is a simple process.

9. You don't tell yourself lies about the family business.

Family Legacy: Protecting family in family business.

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Family Business: The family "code" and tips on creating a "code of conduct" policy.

Pirate ship? Photo by  Igor Ovsyannykov  on  Unsplash

Pirate ship? Photo by Igor Ovsyannykov on Unsplash

Family Business: The “family code" . . . and Tips on creating a "Code of Conduct" policy.

". . . the code is more what you'd call 'guidelines' than actual rules." Captain Hector Barbossa, to Elizabeth Swann who tries to invoke the rules to her purposes. Pirates of the Caribbean

"So, what'll happen next?" I asked the daughter of the owners.

"Mom and Dad won't talk to us. There will be no invitations to their house. They won't come to a few of our kids events. They may not see it this way, maybe they just feel hurt, but it will feel like they're punishing us."

"How does it end?" I asked.

"Oh, after a couple of months they'll call about some issue. They'll pretend that nothing ever happened. But everyone knows it's just a matter of time till it happens again. It's a pattern. I guess it's 'just what we do.'"

This family has a code of conduct. It is unwritten, not “discussable,” but clearly set by patterns of interactions over years. It has not, at least yet, undermined the family itself, but has a powerful impact on the family, the interpersonal relationships, and also on the family business. Employees feel it. They know when the family is avoiding one another. They know what issues not to bring up.

Families have different styles of communication and approaches to conflict resolution. Most styles are stable--but not necessarily conducive to growth--a few styles are not stable or sustainable. These patterns of family communication and conflict management are, most often, instinctual and learned--not structured, planned or chosen. Families do what "feels right," carry on the patterns they experienced in their own families, or react against what they experienced--trying to do something different. The results are often mixed.

While most manage to "put things behind them" for the sake of the family  Few people are aware of the psychological reasons that influence their actions--yet, their family members may be keenly aware of the effects. Fear of rejection or failure? Nope. Afraid of isolation or lack of inclusion? No way. Unrealistic expectations or too much self-sacrificing? Not a problem. Ego tied up in being "in charge" and in control? No, just driven to succeed. But the effects are real and, again, they are often keenly felt within the family dynamics.

One small, proactive, step family businesses can take to minimize some of the risk to family members is to make expectations concrete. The process or discussing, writing, and adopting, a family "Code of Conduct" brings to surface the "best intentions" of the family, creates an "expected minimum" for family members, and establishes a structure for the family to return to when issues arise. It provides the extra benefits of modeling good leadership and can help you deal with difficult family members as well (not that you have any in your family!)

Why many will avoid creating a Family Code of Conduct.

One of the biggest hurdles to getting families to write a code of conduct is the belief that "things are fine the way they are." Maybe. But too often this "status quo option" is the view of one or two family members, not the thinking of family itself, nor in their best interests. It can be a denial of the "unwritten" code of conduct that already exists--"Everyone better do what Dad tells them to do," for example, and resistance to a transparent move toward change and growth.

A second reason it is avoided is the fear that it will surface some to the underlying tensions or problems in the family. Often there is an unspoken agreement to "let sleeping dogs lie"--fearing that approaching the issues will make things worse. Well, the truth is it can. Families with underlying tensions, often experience more tension, and even conflict in the short-term; some are even harmed in the process as they try to address issues on their own or even with consultants poorly prepared to use skills, training, resources, or knowledge to help the families successfully circumnavigate the potential dangers. 

However, for families that can effectively function, even through difficult and stressful circumstances, the discussion and adoption of written policies of family conduct is often very  helpful in promoting communication, decision making, and avoiding future conflict.

What should be included? That depends. The developmental stage of the family business will greatly impact what is addressed in this policy.

The needs of the "one controlling partnership" of a "Mom and Pop" just starting to incorporate their second generation into the business is dramatically different that the "cousin consortium" that encloses a complex group of families, owners, and business involvement within the family.

However a few key points are helpful to keep in mind.

First, you need to establish the purpose or goal of the policy. Why are we creating this? It should address a general philosophy of the family's view of the business and language about the importance of the family, the business, and the separation of work and family

Second, you need to establish who this policy is for and consequently what should be addressed. If you are staring to think about adding the kids to the business it might only need to address employment, professional development, loans, remuneration, and other basics.  If it is addressing a large complex family it might need to address the issues already noted but also expanded to address other topics such as the use of the family office, stock ownership, or many other issues as well.

Third, like it or not, the code of conduct has to address the issue of "what happens" if someone breaks the code. How will issues be addressed? Who will be included in trying to remedy any issues? Who will have the final "say" about actions taken?

Newer family businesses are less likely to feel the "need" for a written policy. However, by ignoring this, they only "kick the can down the road" and miss out on an opportunity to learn and grow, so that, later they have knowledge and experience to address more complex issues. So, don't delay! Protect your family proactively and don't fall victim to crisis planning at a time when the pressure will make it more difficult and potentially less successful.

 

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Who is advising family businesses? . . . That's brilliant!

Photo Credit: Wikipedia

Photo Credit: Wikipedia

 

My family has  a tendency to "latch on" to catch phrases from our favorite media (If you hear . . . "Inconceivable! or "Beam me up, Scotty!" . . . you might get the idea). We do this, perhaps, even to the point of being nauseous.  If you hung out with us, you could probably guess our current obsession from our banter.

One of our current favorites, is a British radio program called "Cabin Pressure." It is about a . . . (Yellow Car! *) . . . family business where Carolyn, acquires, in the divorce from Gordon, the one thing her ex-husband "truly cares about" --a plane called "GERTI" for it's call sign of Golf, Echo, Romeo, Tango, India--and creates a business, MJN Air which stands for My Jet Now Air. The show stars a couple of acting heavy weights (Benedict Cumberbatch and Stephanie Cole) and, perhaps even more impressive, a comedic duo of unknowns (Roger Allam and John Finnimore, the latter of which, is also the author of the series). The program is a delight.

The airline owner, Carolyn, employees two pilots, one fired from the big airline, and the Captian, who is a technocrat who took four tries to get his license. She also has a "crew," her son, Arthur, played by Finnimore, who declares everything he experiences as "brilliant!" So whether it is the "Skipper's" ridiculous gold-braid embossed hat, the task of giving a lecture on polar bears, determining if he can--or cannot--imagine a thousand penguins, or just cleaning the lavatory . . . are equally wonderful, and Arther exclaims this with great enthusiasm as "Brilliant!." In fact, the only exception to this pattern of viewing the world in such superlative terms is when talking about his father who is . . . is . . .  ". . . not brilliant," and thus severely condemned in Arthur-parlance.

What does this have to do with therapists and family business?  Well, for one thing, the crew of MJN Air could use the help of a good advisor . . . with some behavioral health experience. So could, for that matter,  the divorced-but-still-family of Carolyn, Gordon, and Arther. But that's a story for another day, the point is, that businesses, especially family businesses, are inextricably interwoven with the relationships of the family members.  Art here, as it does so often, mirrors life.

Most family business owners, like those in the sitcom, are left to "work it out among themselves" -- with greater or lessor success. But that is slowly changing. Family Business owners are recognizing the need to be planful about preserving the family.

In 2004, The Economist published an article on Succession called  "Passing on the Crown." In it, they reported that 70% of the attendees at the annual conference of the Boston Family Firm Institute were Family Therapists. What? Therapists!  Surprising? Probably. But it highlights both a need and one of the great challenges for Family Businesses--The family element of succession planning--and the risks it poses to both the business and the family.

Sources such as the Family Business Institute report that 88% of Family Business owners expect that the family will continue to own and operate the business in the following generation. But, as students of family businesses are well aware, in actual fact only about 33% make it to the second generation and around 10% to the third.

The sad part is not necessarily the outcome. After all, if the family itself decides that they no longer want to continue on as a family business--for what ever reason--and close down, get bought out by the management/employees, or out right sell--this is hardly a tragedy. It is simply a decision and an action no different that choosing to sell a car.

No, the sad part is that too often the end of the family business is not due to a plan but a reaction to tensions in the family itself. Dad or Mom won't let go. The kids can't get along or are uncomfortable inheriting the business. Personality characteristics threaten to disrupt the family or perhaps get tired in a public, legal, battle.

So, it's a good thing that family therapists are preparing themselves to be advisors to these families. You see, the truth is, family therapists--like the family businesses themselves--typically have no education, training, or experience with family business issues. 

So, sending families with family business issues to the average helping professional is likely to end in a less-than-optimal outcome.

Family businesses need to prepare for succession and the difficult challenges they will face as the generational shit approaches. Helping professionals need to recognize that the majority of businesses are run by families and to prepare themselves to find the appropriate referral sources or train and educate themselves to be a good advisors.

This latter path often requires a change in the paradigm of the helping professional.  Am I a business expert? No. Can I tell them what legal or financial structures are recommended? No. So what value do I bring? Well, I can tell them how to set good boundaries, practice effective communication, not abdicate out of fear into avoidant behaviors, how to manage estranged family members . . . and much more. 

The things is, our value lies in what the family business owners say is their highest value, "The family!" In this, we are the experts.  Our involvement has the profound effect of making it more likely that family businesses, once left to their own survival, will experience an increase probability of being sustainable or closing without straining the relationships.

Helping professionals in general, but MFTs in particular, with the proper education and training can be invaluable resources and advisors for Family Firms. Utilizing skills like in-depth ethnographic interviews, assessment tools, coaching skills, family therapists can help craft action plans to aid these families with their move toward a successful succession and the maintenance of family relationships.

Planning retreats to reconnect disengaged families and coordinate planning for the future, sitting in on the family council meetings or participating in annual family meetings, coaching young leaders, helping families manage or prevent family conflict etc--the advisor's focus is on the health and well-being of the family wit in the ownership-management-family dimensions. 

A Family Business Consultant, with a family therapy background, can encourage the family to continue it's growth, address issues before they become toxic, keep open dialogue and provide support for the family's goal to maintain, preserve, and protect the family, and . . .

"That's Brilliant!"

 

Photo Credit: Gustavo Bellmen, Unsplash

Photo Credit: Gustavo Bellmen, Unsplash

 

* P.S.- One of Arthur's games is "Yellow Car!" where you say, "Yellow Car" if you see a yellow car. But if you see a car that's not yellow, you don't say "Yellow Car!" I know, I know, the rules can be quite tricky but fortunately, Arthur has completed a tutorial to explain the rules. Oh, and if you are a therapist, I think you will love John Finimore's take on therapy . . . see it here.  Finally, I must tell you . . .  "the lemon is in play."

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Parents and Kids: Don't make it easy! Especially if you own your own business.

A knife, the right one, can be a useful tool.  Photo Credit: Juan Jose Alonso at Unsplash.

Warren Buffet, the "Oracle of Omaha," has started giving away his wealth . . . and it's not to his kids. He gets it.

 

I needed to run into the "big box store" for one thing. My son, courageously, volunteered to stay behind an take care of our dog. "Courageously" I say because I knew what was on his mind. The same thing that had been on his mind for the last week or more. The knife. "Maybe you could stop and look at the knife?" he cautiously asked . . . . I steeled myself, knowing this was not the time to be generous and give in. It was too important . . . for my son.

Recently, my 11 year old set his sights on buying a knife. His hope, a big-bowie knife. Now, some of you might be thinking . . . uh, no! Given the immature nature of many young boys, the culture of as presented in the main-stream media, parental anxieties, and the potential for "unintended outcomes" we, of course, worked to establish a more reasonable alternative.

That does not mean, in this instance, that our automatic answer is, "No knife." Since we have a very active average--complete with chicken coop, high tunnel, three garden spots and all the accompanying minutia of hey bales, tractors, tomato cages and the like--a knife is a practical tool that a "chore=laden" (at least in his eyes) boy could find useful. Not to mention his parents. Besides, we live in the heart of the farming community where 14 years olds drive farm equipment and help with the harvest. Really. It's not that weird for youngsters to carry a knife, at least, around the farm. (I have had to tell a few young lads that they cannot bring them to social events to show their friends however.)

So, yes, the knife is still in discussion. After all, this isn't my first time around at this. We have six children (four of which are boys) and I regularly counted on the other boys help in working around "the place." "Hey, do you have your knife on you?" was  not an uncommon question, especially,  if I didn't have mine on me at the time.

But, the discussion about the knife is always about responsibility. "Do you think you are old enough to be responsible with a knife?" I'll ask, putting the necessity of this requirement to their mind. This youngster, in my assessment, is on the verge of consistently acting responsible enough . . . but not quite. So, I had a talk with him about his lack of consistency--giving his mother a hard time about chores, being upset that she didn't buy him the knife when he expected it, his general attitude and treatment of others.

"I can't give a knife to someone until I know they are going to be responsible," I told him. "i see you becoming more and more responsible but you need to do it in all areas if you want to be trusted with something like a knife.  Your mother and I look forward to when you are responsible enough to have a tool like a knife." I concluded.

I was practicing the age old rule of "not making it easy." It's advice I give to parents in general and especially to parents who have done well--many who own family businesses. Oh I know the sad truth that there are parents out there that are mean, withholding, even abusive to their children--those parents need a different rule called "be kind"--but I think the majority are more in danger of wanting to do too much for our children. Thus, we rob them of learning early on how to handle disappointment, frustration, and to reinforce the satisfaction of turning their hard work, and patience into meeting their needs and wants.

This does not preclude another of my parent rules, "Say 'Yes" as much as you can." You see, as I said earlier, our answer is NOT just "No." In fact, the answer to the knife is "Yes, when you're ready." The same foes for getting a car in a few short years. When you are mature enough, have earned the money to pay for it, and grateful for the privilege of owning it.

Parents who are owners of their own businesses run into an even greater danger of making it too easy. Saying "Here, son/daughter, "here are some opportunities, assets, cash, etc." may make good business sense. it may help pass down your assets, make create tax write-offs, and may just tempt you to want to be kind to your children. But, just like staking a tree too soon for fear that it will break, staking it before it has strengthened itself against the wind and other elements, only weakens it and makes it likely to fail when it is grown and it's weakened condition is overcome by the weight and stresses placed on it as an "adult."  Like the tree, these "coddled," advantaged, children may not develop the internal strength to weather the storms of life.

"I'll look at it," I responded to my son, "But don't expect me to be coming back with it," I warned. "I know," he said. I watched as determination and courage followed the initial disappointment. Inwardly, I winced, my heart grieving for the kid and the disappointment he felt. My thoughts moving to the pride I felt however  in seeing him work to be the mature young man he can be, and reminiscing about the joy of watching my other boys become men.

The funny thing, which I knew would happen (remember it's not my first "rodeo"), is that his general mood has been better. Saying "no, for now" has actually released him of the pent-up pressure of "wanting."  He's more pleasant, more helpful, just happier. The good thing is, it's no longer just about trying to manipulate me into getting the knife either. It's real. That afternoon, he voluntarily, sauntered out and helped me replace the wheel on his sister's car and he enjoyed helping. It's progress.

I'm still going to try and talk him into a more reasonable knife--not one that is "flashy" and "mammoth" into one that will be more useful. But the type of knife is not the biggest concern. No, my danger, as a parent is . . . I'm already wondering--now that he showed some mature fortitude--how soon I can take him to buy a knife. Yes, I'm my own worst enemy. I may have to "practice what I preach" and exercise a little frustration tolerance.

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