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Quick Take-Aways from the Prairie Family Business Conference

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I should be attending day two of the Prairie Family Business Association's Annual Conference. Unfortunately, pending blizzard conditions prompted an early exit from the PFBA Conference finishing today in Sioux Falls, South Dakota. But, I got to enjoy one day of the conference and I'll share a few quick take-aways . . .

 

Craig Culver talks about the history of Culver's Butterburgers and Custard.

Craig Culver talks about the history of Culver's Butterburgers and Custard.

Stacey Cunningham, Co-founder of Aegis Performance Group

Stacey, following up on last year's presentation from Captain Mike Abrashoff's Keynote presentation on the turn around of the USS Benfold reminded us of the importance of "crew interviews"--empahasizing the importance of really getting to know employees and communication among family business families. She also talked about "after-action reviews" to try and get to the root of problems and fix them so they don't reoccur.

Craig Culver, Co-founder and Chairman of the Board of Culver's Restaurants

Craig emphasized that at Culver's "the most important people are the team members." He noted that "guests" or customers are also important but prioritized the importance of the organizational culture. Part of the success, according to Craig, for Culver is "getting the right people" and they have a significant screening process and 17 weeks of training for new franchise owners.

De Vee Dykstra and Tyler Custis from the USD Beacom School of Business

Presenting on family business research findings from surveying PFBA members, the University of South Dakota (USD) researchers noted that 60% have some type of advisory board, consisting on average of 5 members with slightly more than half, 2.6, being family members. The boards meeting typically 2-4 times a year. They noted, cautioning that these were preliminary results on a small sample, that these boards were effective at resolving business issues but not effective at dealing with the family's issues.  They noted that only 9.3% of the Family Businesses had a family council.

Wayne Rivers, Co-founder and President, Family Business Institute

Presenting on "No B.S. Family Business Planning, Rivers noted that their is a crucial difference between FBA's that operate as a "Family-Business" versus those who operate as a "Business-Family."  He emphasized the need to prioritize the business aspects and by doing this well many family problems will be avoided. He also noted that the "Business-Families" do better on multiple business factors as well stating that BFA organizations return $6 of net worth as opposed to FBAs which, comparatively, return only $1. He highlighted the need for good business planning and focusing on people as two factors in success.  Finally, he noted that a mission statement should be simple and no longer than one sentence.

Dr. Justin Anderson, JSA Advising

Dr. Anderson presented on Leadership & Next Generation Development. This break-out session was of interest because it was operating within the "wheel-house" of our own expertise here at HSC. However, being an informed consumer did not make me a great "recorder" of the points in this presentation.

Thus, a caveat, I am not the average consumer of this material. With a Ph.D. in the same core area as Dr. Anderson, much of what was presented was already familiar . . . emotional intelligence, cortisol levels and the "fight or flight" response, trust and communication."

I say this, to preface my next comment for other FBA advisors who come from the world of Psychology . . . What is being utilized to work with professional athletes, fortune 500 companies, and family businesses is parallel to what your do in your practices every day. The techniques, tools and delivery may be more sophisticated (using video for recording meetings) but the content is not. (I had the same reaction working with an international research company and a manufacturing facility back in 1998.  This international company of experts were simply using t-tests and p values . . . the most basic of statistical analysis. But that is another story for another day.)

The above statement is not intended as a criticism of the presentation, which was done well, and I am sure, was new information to those without my background. But the biggest take-aways here related to what we emphasize as human systems consultants . . . Psychological safety is critical to communication and trust. The best leaders have high emotional intelligence. Focusing on the Situation-Emotion-Response equals Result process.  All-in-all it was a good presentation of the importance of Leaders developing good emotional intelligence as a critical factor for success.

So that't the "quick takes" from the conference. I love attending this conference! It'a a great mix of service providers and family business owners.  This year I got to meet and chat with a father-mother-daughter family, who run Triview Quality Communications. It is inspiring and informative to have these contacts. If you are a family business, or a provider to family businesses, in the midwest, I would encourage you to check out the PFBA!

 

 

 

 

 

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Family or Business? Ten Tips for Preserving the value of the family firm.

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The Chicken or the Egg?

If you are in a leadership position in a family firm then you face the dilemma of, “which comes first the family or the business?”  But,“Wait a minute! You can’t just arbitrarily separate the two.  It’s not as simple as just asking yourself, “Which comes first?”  Okay, you’re right.  This dichotomy is a distortion . . . that’s true. But not asking this question can lead some family owners to poor management practices such as management by fear, over-committing to work, and to the demise of the family.  Later, I’ll share 10 tips to help you preserve the value of your family business, a task that is indicative of understanding the integration of the family and business. . . . .

But first, consider this . . .  If I audited your business, which part would I find gets the most attention and resources--including cash--spent on it?  Which domain has the largest share of advisers?  I just recently attended a social for family businesses where one owner indicated that they were about to have their "first ever" family meeting to plan for the future. "First ever!" for a large on-going firm with multiple family generations working in it.  This, unfortunately, is the norm not the exception.

Now ask yourself, this, "Which part of the family-business world gives you the most worries? " Are the biggest worries the business decisions you face? Or, are the biggest concerns for the family and the impact the business will have, good or bad, on the individual members and the family relationships? Family-based businesses that thrive find ways to preserve the value of both the family (including ownership) and the business. 

But many family leaders don’t pay adequate attention to the family dynamics and as a result the family suffers from unresolved conflict, damaged relationships, or all out family war.

I have seen it happen in so many ways . . .

  • brothers who can’t get along, each trying to one-up each other and prove their value to the firm; 
  • sons who feel entitled to taking over the firm and having a guaranteed career only to have that taken away (and then regretting not pursuing other careers;
  • daughters who can’t move on due to the loyalty and needs of the parents;
  • in-laws at conflict with their spouse’s family, each suffers from the grind of working, playing, and fighting together on a daily basis;
  • parents who have given control over to partners to hold for their minor children only to find the partners and children at war over control of the company;
  • husbands and wives at odds over a looming family crisis and how it should be handled. 

No mixing family and business is not easy. The very closeness and complex relationships that can be its strongest asset make family firms much more emotional environments than traditional organizations.

Still, family businesses are the most common type of businesses world wide. Many labor toward common goals, dealing with the family baggage well enough to survive . . . but living in the heightened emotional crucible of family-business tension. Others face transitional points (children entering the business or passing the baton) but have no road map for how to successfully deal with that transition. Yet many family firm leaders will tell me that the family is the business’s greatest asset.

Preserving the Family Business

So how do you preserve the value of the family business?  By taking the task of growing the “family assets” as seriously as you value the “business assets” of the company.  Here are ten ideas on how do accomplish it:

  1. Develop a family constitution, mission statement, white paper, or some other guiding document for your family.  When my Dad died a few years ago (after working in one organization for fifty-one years!) I found a list of goals he had set for himself early on in his career.  It was remarkable how many of those goals had been met!  We shared it with the President ofthe organization and he shared it at the funeral. It was interesting to me that not all of the goals were business goals, some were personal goals and others familial. It became clear how he had stayed in a leadership position for over five decades…
  2. Have regularly scheduled times (family board meetings) to focus on the family aspects of the family business.
  3. Develop a strategic plan for the families’ growth.
  4. Deal with baggage that is threatening the family and/or business quickly.
  5. Identify and use family advisers.  No not your accountant, lawyer, or banker. I’m sure they are all competent professionals.  But there competence lies in accounting, the law, and banking.  Not families. Look for a family therapist (who understands business), a family-firm consultant, or another type of mental health professional.
  6. Develop a clear understanding of the risks associated with each developmental stage of the family business.
  7. Create a family “balance sheet” of the pros and cons of the family-business interaction and examine in annually.
  8. Find ways to clearly distinguish “family time” from “work time.”
  9. Proactively market the family business to family members.
  10. Demonstrate the ability to be transparent, vulnerable, and forgiving.

If you own or work in/with a family based business, what has been the single best thing you have done to preserve the value of the family business?

For more on preserving your family business, enter your email and download our free eBook, or if you'd prefer, purchase it at Gumroad.

 

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