Untangling the Knots with Compassion, Creativity & Wisdom
It is easy to get tied up in knots over how to plan for the future - for yourself, your family and the next generation of leaders in your organization. Whether you are on-boarding, off-boarding or making a change in course, it helps to have someone who can help you develop and implement a road map that will accomplish your goals without sacrificing family harmony or business success.
The Victorio Consulting team provides coaching and guidance to individuals, families and organizational teams through transitions of leadership and career change. We help families and business teams work together better and create a platform for problem solving and future success.
We are committed to helping you achieve your goals without sacrificing family harmony and business success.
We believe there is no business gain worth a family loss.
Addressing emotional issues in a straightforward and safe manner is no easy task, and you will need guidance from an experienced facilitator. This requires a willingness for all parties to take a step back their individual desires to achieve a bigger vision for the family and the organization.
Providing a safe environment to discuss delicate issues.
Each organization requires a uniquely tailored program to provide an organized pathway for the next generation to understand, prepare for and pursue any number of management careers. Having worked with many families across the country, experience has taught us that it is important to clarify the expectations for educational and experiential requirements, provide a mechanism for communication and problem solving, most importantly define a development curriculum within the company so each developing successor will have a plan for advancement based upon their accomplishments.
Achieving a win/win/win means there are no losers.
Whether you are a partner in a professional organization or have a family business, it is easy to get tied up in knots over how to plan for the next generation of leaders in your organization. Combing through the many complicated layers that accompany private enterprises takes time, patience and a willingness to hear all viewpoints. Once each issue has been separated from the rest, it then becomes possible to weave the strands together to create the picture that everyone has participated in creating.
You can't run a family like a business and you certainly can't run a business like a family.
The successful family unit is centered upon unconditional love and acceptance; successful business relationships are based upon talent, experience and accountability. When you mix these two entities together, you are bound to run into complications and conflicting objectives.
Addressing these emotional issues in a straightforward manner is complicated and you will need guidance from an experienced succession coach to help you. Achieving a win/win/win outcome means there are no losers. This requires a willingness for all parties to take a step back from their individual desires to achieve a bigger vision for the family and the business.
How to facilitate a healthy transition for your business
If you are a business owner, key manager or employee of a company going through an organizational transition, such as a merger or leadership change, it is likely you will experience performance disruption caused by confusing messages, speculation or lack of information. And you are not alone. Often the planning for these important events happen behind closed doors with only the owners and advisers, leaving everyone else to speculate about the future. Business owners can avoid these challenges by being more transparent about upcoming changes and engaging everyone into the process.
Separating family from business relationships
As a family business owner, you may want to bring your children or other family members into your business. You may have already done so and discovered it’s been a bumpy ride. How do you do work with family members and still protect family relationships?
When family members work together, the boundaries between work and family time becomes blurred, and the relationships overlap. Families need to think through how to separate the parent/child relationship from the owner/employee relationship.
The Family Council
How to successfully approach planning decisions with family members
One of the best venues to discuss the business of the family is in a “family council.” What we’ve learned is that people should separate family gatherings from family business discussions. A more formal setting encourages a more professional and organized approach, often by having advisers and a facilitator present to help explain things in a way that won’t upset or confuse.
Making important decisions related to your financial and business future, can easily tie a couple and family into emotional knots. Differences in leadership, communication and decision-making styles can threaten even the best of families when discussing sensitive issues.
There are many things that families can do to become more effective communicators (and listeners) and in turn, to improve the quality of their relationships. One of the tools we use to help couples and families understand each other better is through the PDP Personality Styles Survey®. Understanding the four basic behavioral personality traits and how these traits influence behavior under stress can be an effective tool to enhance family communication.
Stock ownership qualifications can be built into a stock ownership policy — just because you’re a family member and in the business doesn’t mean you’re qualified to own stock. Those in the business should have controlling or voting stock, while those not in the business can own non-voting or restricted stock because they likely won’t understand the decisions that need to be made. Having a stock ownership qualification policy can include provisions to prevent unnecessary battles between active and non-active shareholders.
How do we create family governance policies?
Your attorney will draft the legal language of these policies, but the family, owners and your succession adviser determine the intentions or principals of the policy. You’ll determine the intention, how it will work in certain scenarios and talk through topics in an open way to get an outline. Your attorney will confirm the principals, point out the ramifications of certain provisions and formalize the language. The outline typically becomes an addendum in the shareholders agreement and presented to the next generation family member, along with the family employment policy and expectation agreement.
How are personal and professional relationships best maintained?
As in any partnership, clarifying your vision, objectives, expectations and measurable outcomes is fundamentally important with any family member coming into the business. As you’re determining an equitable workload, the functions can be so different that one can feel as if one is getting the mine and the other is getting the shaft. Determine the best way to work together, how often you’ll meet to talk about the business, how you’ll support your personal relationship and handle differences of opinion. Talk about both business and life objectives so you can support each other in life and work.
It’s important to establish boundaries. One couple working together determined that at the end of the day they would meet, review the day and set up for next, then stop talking about business. It changed their relationship. Family business coaching can help establish these boundaries.
Preparing the Next Generation for Leadership
What will it take to get the future leaders ready for succession in your business? While many family-owned organizations do a good job of creating wills, trusts and a buy/sell agreement, too few formally prepare the next generation to lead and succeed in the businesses they will be inheriting. Too many succession plans assume the owner will be able to schedule his or her own passing, and so they forego developing a backup contingency plan, which can sometimes have tragic consequences. If you are a business owner hoping to pass your business to your children, the transition of leadership is far more complicated than simply transferring formal ownership.
Develop and adopt a family member employment policy before young family members are ready to enter the work force. The policy establishes the criteria for a family member to qualify for a job at the company. It sets the level or type of education, the desired skill set, mandates that no job will be invented for a family member unless it’s needed by the company and determines that pay scales will be commiserate with those of non-family members.
Your managers will appreciate your family employment policy, as it will address the complicated family issues before they happen. It also clarifies with family the qualifications and the experience they’ll need to work at your company.
How do you set expectations for managers of family members?
Bring your key managers in as mentors to define how you want to handle your children’s professional development, as well as the predictable bumps and challenges. Triangulation can be a really big problem in family businesses.
What In-Laws should know before going to work in the family business?
As an in-law coming into a family business, you’re stepping into one of the hardest working environments imaginable. A family member is held to a higher standard than regular employees, but an in-law has to work even harder than a family member. It takes someone with vision, purpose and patience to overcome the extra challenges. If you lay the right groundwork, establish clear expectations, and work with an adviser familiar with the challenges that will occur, it can be a productive and joyous experience.
Properly addressed at the beginning, in-laws (and out-laws) can successfully enter the family business and thrive.
Case study: an in-law had been a successful a sales manager making six-figures before he was downsized. Now, he’s in trouble financially, and the family is worried. Bringing a successful in-law into the family business, which might be in another industry, can be a great solution, but beware of jumping to the top of the stairs. He shouldn’t start as the VP of Sales. Bring him in appropriate to his experience and provide an opportunity for him to learn the business and earn his way up the corporate ladder. If parents are still concerned about the financial gap for the short term, they can consider gifting additional monies from outside of the business as parents, not as an employer — to help until he earns his way up.
What challenges do in-laws face when coming into the family business?
The hardest thing to overcome is perception. It doesn’t matter if you have an MBA from Cambridge or a Ph.D. from Harvard. When it comes to in-laws, the fact that you married into the business downgrades any credentials in the eyes of non-family managers or employees. People will tend to judge you harshly, so be patient and don’t take it personally.
The position, pay scale and responsibility must match the in-law’s experience and education. Thrusting an unqualified in-law upon your business team, no matter how great he or she is, makes it a much harder road. Engage your management team into the process of interviewing the in-law candidate to gain support.
The manager is asked to train and manage Dad’s son, Sam. But Sam is acting up, coming in late and overall not doing a very good job. The manager chastises Sam and gives him specific instructions for modifying his performance. Instead of taking the correction as an opportunity for growth, Sam complains to Mom who then goes to Dad saying Sam is being treated unfairly. This forces Dad to ask the manager why he’s being unfair to Sam, putting them both in an awkward situation. Does the manager please the boss and spoil the child, or does he try to be a good manager and make sure the job is done right, standing up to the boss and saying his son is not doing a good job?
The best thing you can do is talk about triangulation before it happens. Sit down with your managers and define how you want to interact with them. If a situation arises, who decides the course of action? You need to build a bridge of communication so the owner, parent, manager and incoming family member have the opportunity to talk these things through before relationships get tangled up.
If a family business hasn’t planned up front, is it too late to make changes if a next-gen family member is already working at the company?
It’s never too late. A succession coach can help you begin to untangle the knots that have people tied up. Next-generation family members can exhibit entitled, blasé or even toxic behavior at any age. Don’t think you can turn a blind eye to it if you want to have a smooth and successful leadership transition. The situation can be turned around if you address it with determination and commitment.
Why is having a succession coach valuable?
Engaging a coach who specializes in succession transitions to help employed family members can smooth the predictable challenges along the way. Family employees, including in-laws, need a safe place to talk, and guidance to strategize through the maze of issues that will occur. The coach also can facilitate a family business council, which provides a venue for family members to talk about business related topics, questions and issues that would normally feel inappropriate to bring up in a productive environment.