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Successor Development: You've Selected Your Successor, Now What?

Now that you have successfully selected your successor, what do you do? If you’re developing a family member successor, the most important thing is to have them go work somewhere else before entering the family business. Learning how to be an employee in a place where your last name means nothing is very valuable.

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What Activities Should Be Required In Your Pre-Employment Program for Family Member Employees

 A Family Member Development Curriculum is a key ingredient for effectively bringing in a Family Member Employee (FME) into the business. As I expressed in a previous post, this curriculum yields the highest results when it is developed, monitored and periodically refined by a team that includes: the family member employee, the working parent or senior officer, a business mentor who is not a supervisor, an independent Certified Succession Planner™ and the current supervisor of the organizational department that the family member aspires to work or is working in at the time.

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Why You Should Create A Family Member Employee Development Team

I am constantly being introduced to family business owners who are just “winging it” with respect to preparing their family members to assume greater responsibility, contribute to productivity and ultimately assume a command and control position. The net result of “winging it” is that the family member generally floats around without genuine accountability and never makes life complicated for managers who would otherwise be held responsible for his/her development. Unfortunately, the average aspiring family successor entering a business has no more clue as to what they will encounter, what is expected of them and what respect, rights, compensation, benefits, etc they should anticipate than a naïve freshman entering college.

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Why You Should Create A Family Member Employee Development Team

I am constantly being introduced to family business owners who are just “winging it” with respect to preparing their family members to assume greater responsibility, contribute to productivity and ultimately assume a command and control position. The net result of “winging it” is that the family member generally floats around without genuine accountability and never makes life complicated for managers who would otherwise be held responsible for his/her development. Unfortunately, the average aspiring family successor entering a business has no more clue as to what they will encounter, what is expected of them and what respect, rights, compensation, benefits, etc they should anticipate than a naïve freshman entering college.

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Create Family Harmony Using These Three Words

Family communication and harmony are components of the Succession Matrix® that can support or undermine succession planning strengths and weaknesses. As I work with families engaged in business, I come to the conclusion that harmony is a common goal of all except those consciously committed to terrorism and chaos. Although there is a limit as to how long we can hang out with some family members, putting aside current resentments most of our wants are stable emotions and to interact with family members as joyfully and productively as possible.

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How to Find Common Business Goals Amongst Diverse Family Members

 Families consist of diverse personalities which inherently reflect the greatest challenge to harmony and productivity. There appears to be no end to the challenges presented by divergent personalities within a family. Nothing appears to accentuate inner family personality differences more than an attempt at business collaboration. Those families dedicated to unity and harmony achieve admiration and those who are prepared to do whatever it takes to get attention or make their point, regardless of the emotional collateral damage, create stress and achieve bizarre goals.  Just like the evening news, little attention is paid to the good guys who are affirming unity while headlines are given to the ones who are making life miserable for the rest of the family. In reality it takes conformist to start and build a family business and it generally takes “self aware” eccentrics to achieve extra ordinary levels of success.

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Successor Development: There Has to Be One Available

Business owners frequently select their successors with an intuitive approach, or based on experience-informed “gut” feel. Most of the time they’re pretty good at it, but when it comes to evaluating a successor for a family business, the family relationship dynamic inevitably clouds a business owners evaluation. There are emotional entanglements that get in the way of their well-grounded intuition. So to help business owners be less instinctive and more intentional and consciously competent in selecting a successor, there are some key indicators to look for in identifying a successor for your business.

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Wipe Out Enablement Attitudes - Rights Versus Responsibilities

No matter where you stand on the immigration law, one thing is painstakingly clear. Our country is obsessed with protecting everyone’s rights with little to no concern for their responsibilities. Somehow we seem to suffer from affluence guilt that leads us to feel it is our responsibility to take care of everyone on the planet, and perhaps more accurately, that everyone on the planet has a right to be cared for by the U.S. 

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Is Your Family Business Out of Balance? What You Should Know About the Family Business Equilibrium

Throughout my years as a business succession advisor I have witnessed a familiar set of actions and consequences across varying business types, which have resulted in constant turmoil and an imbalance in the “Family Business Acceptance Equilibrium.”   Since I have experienced so many businesses’ struggling with this common issue, it led me to give thought to why???  The culprit appears to be a confliction of attitudes that is blind, self centric and places a higher priority upon feelings, values or beliefs of one family member or key manager(s) versus the welfare of the organization as a whole. 

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Why it Takes 10 years to Confirm a Successful Family Business

Classically I believe it takes ten years to achieve confirmation as a “successful family business”. Up until approximately that point in time family leadership is being tested to determine if it has the moxy and versatility to maintain a workable balance and move closer to the optimum Family Business Acceptance Equilibrium unique to that family and business. Up until the ten year point from my perspective, most leaders do not know if compliant family and staff are simply tolerating insensitive “what have you done for me lately” conditional acceptance or appreciating the constant reaffirmation that “we are fam-a-ly” unconditional acceptance.

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Family Attitudes and Business Issues

More often than not, a weakness in what was prematurely perceived to be a successful family business is a reflection of predictable environmental wear and tear on both relationships and processes. Usually this wear and tear is due to the inability to achieve or maintain the Family Business Acceptance Equilibrium or Family-Business balance. 

Relationally, there may be great harmony or operationally  impressive nothing-slips-through-the-cracks accountability, however; regardless of past achievements, as a family business matures   success in both harmony and productivity that was initially easy to achieve   begin to be more challenging. Initially family members, eventually employees and ultimately on lookers recognize that there is something amiss. Business is no longer sufficiently gratifying for family members or productive for managers. Typically there is growing dismay as to why the business has become so difficult followed by the expenditure of significant time, energy and consulting dollars trying to tune up processes and procedures when the culprit lies within the culture of the business.

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Can You Be Too Optimistic for Your Own Good?

What do you think?  Can you be so optimistic that you are completely out of touch with reality?  Can you believe so strongly in your own dreams and ambitions for yourself, your family, and your business that you just do not “get it”?

Just a few days ago, I discovered that one of Frank Sinatra’s trademark songs from a few decades ago is now a ringtone for cell phones.  Written by Sammy Cahn and Jimmy Van Heusen, “High Hopes” is all about the need to believe you can overcome great odds against success. 

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How to Create Stronger Family Business Relationships - Respect and Trust are Experiential

The presence of respect and/or trust within a group confirms a Blood Related Business Group or a family in business. Love is sweet and it can indeed amplify both trust and respect but love is not a critical component of family or family business performance.  The respect and trust associated with healthy families provides the natural advantage with regard to accountability, governance and teamwork. This organizational natural infrastructure advantage is what can give a family a performance edge in business. The presence of both respect and trust and variations of each make some families more effective than others.

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What Is a Family Business?

I have always believed that family has a built in advantage in business. From my perspective the natural behavior of family provides both governance and teamwork benefits. Unfortunately some families leverage their natural behaviors better than others. The wide variation of performance among family businesses brings up the question, “What makes some family businesses better than others?”

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Keys to Effective Leadership for a Family In Business

Family in business can be a significant advantage or a reciprocally significant disadvantage. The absence of respect and/or trust between the members, regardless of a common gene pool, confirms just a struggling Blood Related Business Group not a family. The struggles are known to all group dynamics as in rivalry, resentment, pay-back and other bizarre behaviors and attitudes that attempt to provide protection from perceived flesh eaters. Love is no antidote to the ills of this environment and predictably amplifies the frustration and anxiety associated with the disrespect and distrust from loved ones. In the absence of love, the rational members of the BRBG generally stop taking the abuse and move on to a more tolerable and reasonable environment. Whereas respect and trust provide inherent productivity advantages, distrust and disrespect provide an equally if not greater disadvantage.

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How Important is an Operating Board of Directors for Your Family Business?

I am just back from an Operating Board of Directors meeting with a long standing client that brings to light several important business succession theorems. As a refresher, an Operating Board of Directors is a Board of Directors that actually operates. In contrast, ninety-nine percent of the Board of Directors of closely held companies are perfunctory. The directors never actually meet or provide oversight accountability. The attorney or Secretary prepares boiler-plate minutes for directors to endorse and satisfy annual regulatory requirement.  I had convinced this Board consisting of a 77 year old widow and her two sons that it was prudent to come out of their offices and endeavor to work together to provide oversight to a recently hired new CEO.

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Operating Board of Directors - Good Meetings Rarely Just Happen

So as previously described, we have now had our first Operating Board of Directors meeting after twenty-five years of dancing around and not substantively working together to supervise or operate the business. The new CEO has got his feet on the ground and had demonstrated that he is a superior manager as compared to his predecessor.  All are generally comforted that the new CEO decision appears to have been appropriate. Furthermore, there are a few other family business pearls of wisdom to be learned from this experience. 

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Operating Board of Directors - Members Vs. Participants

So as previously described, an Operating Board of Directors needs a plan of operation. Just coming together to discuss operations and hold management accountable does not work. The plan will deliberately address what part of operations should be discussed and what is a waste of time; what are reasonable benchmarks for management accountability? These are reasonable questions that do not get addressed by random luck. There must be a plan and a process to get the most out of the time invested in an Operating Board of Directors.

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Successor Development - How Good is Good Enough?

I was recently in a meeting with a son of a business owner, who was the identified 3rd generation successor leader to his family’s business. We were talking about some communication challenges he was having with his dad. His dad is a larger than life kind of guy, one whose shoes are hard to fill.  So, I asked, “What seems to be causing the difficulties?”

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Why You Should Stay Engaged, Even After You Exited the Business

I was recently in a meeting with a father and his three sons working on developing some reasonable expectations between them. Dad was in the process of transferring stock in the family business to his boys. Being that partners are much different than father/son or boss/employee, they needed to clearly define their expectations.  I started out with what I thought was a relatively benign question of the eldest son – “What do you like most about working with your dad?”  His answer led us down a path of discussion that I could not have orchestrated if I were a magician.

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