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Further
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The Independent Arbitration Field Is It Poised For A Growth Explosion? - James A Gage
The Independent Arbitration Field Is It Poised For A Growth Explosion? By James A. Gage With the recent bankruptcy changes almost guaranteed to be signed into law by the President, how does this change the Independent Arbitration Profession? I...
Is Your Business Profitable? - Pam Newman
Copyright 2005 Pam Newman What’s your job profitability? Do you know? Many business owners are unsure of their profitability at a company or job level. They “think” they are making money because they have a few dollars in their checking...
How To Write Ads That Get Results! - Tina Barraclough
You've got approximately 0.5 seconds to grab someone's attention with a classified ad. That is not much time for you to convince someone with your ad (s). You can dramatically increase your results with your ad (s) if you know how to write an ad to...
Exposing Your Expertise - Philippa Gamse
Writing and leveraging articles is my most successful strategy for promoting my Website and my speaking and consulting services. Visitors to your site from targeted articles tend to be higher quality leads than those from search engines, and...
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Building Concensus in a Family Business
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Written By:
Don A. Schwerzler
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Building Consensus in a Family Business
Family Business Expert suggests...
First, build a strategic plan for the family
One of the most difficult problems confronting family businesses is building a consensus about how the business should be operated, now and into the future.
In a non family business, the answer is rather simple and obvious: Develop and implement a strategic plan.
In a family business, the process is dramatically more complicated and filled with situations that can devastate both the family and the business.
A Strategic Plan for the Family
Many family business owners do not understand that before a family business can develop a successful strategic plan for the business, there must first be a strategic plan for the family.
For example, ensuring the senior generation's financial security, independent of the business, generally is a fundamental requirement of the family's strategic plan. Meeting this goal then becomes a critical objective for the strategic plan of the business.
In other words, the economic engine (the business) is being asked to reach a specific financial goal of the family, as opposed to reaching a business objective such as ROI, or other ratios or measures of profitability.
First Step Toward Consensus
One of the first steps in developing a successful process for building consensus is to clearly understand the different perspectives "between" generations (inter-generational issues) and "among" generations (intra-generational issues).
Inter-generational issues are generally easier to determine, and they are usually related to life stages. For example:
Parent Offspring
Conservative Aggressive
Risk adverse Risk taking
Security conscious Development conscious
Strategy: status quo Strategy: change/growth
Controlling Wanting control
Managing the Past Managing the Future
Intra-generational issues
Intra-generational issues are less likely to be identified and discussed. As a result, these issues tend to "fester" over long periods of time, and they frequently present themselves in an explosive and destructive manner.
Some of these Intra-generational issues include differences in compensation, perks, status, individual personal values and public recognition factors (visibility). Other problem areas are educational differences, varying levels of personal and professional sophistication, differing opinions of "value
contribution," and, most importantly, spouse issues.
The Role of Facilitators
Because many of the inter- generational and intra-generational issues can be "confrontational," it is generally a wise investment to retain a "facilitator" trained and experienced in - continued below ...
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dealing with family business dynamics.
This facilitator can assist the family in organizing and prioritizing real or perceived differences among various family members. In fact, dealing with these issues can actually become the "agenda" for family retreats.
Objective Understanding of the Business
Concurrent to recognizing the inter- and intra-generational family issues, to develop consensus in an FOB, it is equally essential to gain an objective understanding of the business. From an Operations Management perspective the most difficult problem is clearly identifying the crucial operational characteristics of the business. To be successful, this process should be independently constructed and must be based on operational information, not financial information.
The Importance of Objective Measurement
Unfortunately, in most family businesses the operational characteristics of the business are never accurately or objectively described. Key decisions are based not on hard facts but on various "interpretations" of sometimes unrelated circumstances. This is not an unusual phenomenon: Family businesses tend to rely on well-intentioned people, memory, and varying degrees of managerial expertise to reach their business goals and objectives, rather than creating a sound operating system.
As an illustration, I often ask family business CEOs to question their senior managers about how much work is accomplished daily in their individual areas of responsibility. If these key managers merely are able to report results, without knowing and measuring the labor hours involved, a serious managerial discrepancy exists.
Designing a process for correcting this problem generally can be accomplished within a few days, depending on the complexity of the operation. Validating the operational characteristics of the business should be a high priority issue, one that commands immediate attention.
A Three-Legged Stool
Building consensus in a family business can be compared to the proverbial three-legged stool. There is the Senior Generation, the Succeeding Generation, and the Business. Each "leg" has different needs and issues, and each requires different kinds of expertise to ensure that those needs are met and the issues resolved.
Unless equal importance and attention is given to each group in a family business, optimum stability will never be realized. Unfortunately for many family businesses, building a harmonious consensus will always remain a dream and never become a reality.
About the Author
Don A Schwerzler is the Managing Director of the Family Business Institute - a special resource for family-owned and closely held businesses (http://www.family-business-experts.com).
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Doing International Business Internationally - William Cate
Doing International Business Internationally By William Cate July 2004 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] Internationalism is Anti-American. Surveys...
Starting a New Business Online? - Jim Edwards
It seems everybody has a "can't miss" idea for starting a new web-based business, despite innumerable news accounts of most web businesses going belly-up in a short time. Most folks still think, mistakenly of course, that a website alone somehow...
The Nigerian Scam - Richard Lowe
The Nigerian Scam letters - I'm sure you've received them in your mail and your inbox. This scam has been running for decades, and by now I would think that most people in the United States have received it or heard about it in one form or another. ...
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