Tag Archives: family business

02/4/16

But What Will I Tell My Grandchildren?

Seth Godin recently wrote a post with a seven-word title: “But what will I tell the others?” He calls these out as: “Seven urgent words that are rarely uttered.” “The profound question…”

These are, he says: “The words we imagine we’ll tell the boss, the neighbors, our spouse after we make a change or take an action… this drives the choices that constitute our culture, it’s the secret thread that runs through just about everything we do.”

Upon reading this post, I saw its significance to members of family businesses. From their point of view the question that immediately came to mind was: What will we tell our grandchildren about decisions we make regarding our family business? What will we say to them about decisions that will drive the family culture of future generations?

You may see your role in your family business as existing only for the duration of your leadership. Alternatively, you may see your role as growing the wealth of both the business and the family, and passing them on.

You may work to make your business successful for today. Or you may take up the challenge of ensuring a strong foundation that will support the business for leaders of future generations.

You may envision yourself creating a culture and a legacy; inspiring future generations to reflect back with pride on your leadership and your words.

01/29/16

Assessing Emotional Intelligence – The Results Are In

For the past two weeks I have been writing about emotional intelligence and its role in family business. From the many responses I have received, it is clear that this topic has struck a chord with readers.

This week I want to briefly show the value of applying emotional intelligence assessment within a family business. The case is presented by author Ernesto Poza in the 4th Edition of “Family Business,” published by South Western Cengage Learning. I use this text in my Family Business Management class in the Zicklin School of Business at Baruch College, City University of New York.

Poza writes about a family with challenging dynamics. They wished to create an environment of engaged conversation while ensuring all stakeholders were sufficiently respected. Following an assessment of the family’s facility for emotional intelligence they developed a Family Rules of Conduct. The rules they agreed to were:

  1. Focus on the future, not the past.
  2. Be a good listener.
  3. Put yourself in the other’s shoes.
  4. Stay focused on principles, not personalities.
  5. Make “I” not “You” statements.
  6. Say “Got it” whenever speech-making blocks progress.
  7. Disagreements are okay, as long as we are committed to arriving at an improved final decision.

What do these rules tell you about the family’s overall level of emotional intelligence?

Do you think the application of emotional-intelligence assessment tools was useful in this case?

01/22/16

Emotional Intelligence – Do We Have Two Minds?

Last week I wrote about why family businesses are particularly susceptible to the impact of emotional triggers. I observed that, well-directed, emotions can be useful. Successful business families blend cognitive perspectives–thinking, understanding, learning, remembering–with the energy of emotions. At the intersection where these “two minds” meet, the capacity for cooperation, innovation, growth and longevity is born.

The term ’emotional intelligence’ (EI), became popularized in the book by that title by psychologist Daniel Goleman. Also called ’emotional quotient’ (EQ), the idea can be stated as consisting of four capability factors present in differing degrees in each individual:

  1. The ability to recognize one’s own emotions;
  2. To recognize the emotions of others;
  3. To discriminate between different emotions and label them appropriately;
  4. To use emotional information to guide thinking and behavior.

https://en.wikipedia.org/wiki/Emotional_intelligence

There are tools for assessing emotional intelligence factors such as empathy, relationship skills, family relations, social dynamics at work, job performance, leadership and more. With these tools you can identify your own and your team members’ emotional intelligence quotients. While individuals are often found to be stronger in some areas and weaker in others, the good news is that EQ levels can be increased.

Next week I will present how a family integrated principles of emotional intelligence into their family-business model.

01/17/16

You Are So Emotional!

Yes, I am emotional. l am your sister, brother, son, daughter, mother, father, another family member. We not only work together, we grew up in the same family. We share common experiences and emotional history–ingrained touch points that can trigger easily. Because of this familiarity, emotions can spill over into a family business much more often than would be acceptable in a non-family business.

In themselves emotions are not bad; they are valuable. Their energy drives the human psyche; they serve as social signals. When funneled properly emotional energy can be used to achieve significant positive outcomes. Unbridled, emotions can cause untold devastation.

Denying one’s emotions or discrediting those of others is destructive. It is important to cultivate an emotional intelligence to recognize our own and other people’s emotions; to discriminate between different feelings and label them appropriately. We are then better equipped to manage our thinking and behavior to maintain harmony in our families and success in our family enterprises, especially during times of increased stress.

Emotional intelligence is so vital to the success of family businesses that as part of my Family Business Management class at Baruch College, City University of New York, I have students assess their own level of emotional intelligence, and – since we can increase our capacity for emotional intelligence – develop a plan for doing so for themselves.

01/9/16

Family-First or Business-First Revisited

In an earlier blog posting I wrote about distinctions between a family-first and a business-first business. Family-first promises employment to family members based on the family relationship. Business-first promises employment based on the needs of the business and capabilities of the individual; family relationship is secondary.

The question is asked whether family businesses are more sustainable when their focus for growth is placed on the business or on the family. While acknowledging that the health of both are important to multi-generational success, research on family businesses suggests that shifting focus for growth to the family level results in greater entrepreneurial activity and trans-generational value creation.

Said in another way, a family-business is a family focused around a business. There is potential for greater long-term value creation in a business-family that represents a number of businesses centered around a family entity.

01/3/16

Your Job Is To Prepare The Next Generation

In his influential work, The E-Myth Revisited, addressing small business owners, author Michael E. Gerber stated: “Simply put, your job is to prepare yourself and your business for growth.”

Addressed to the head of a family business this admonition applies in modified form: Simply put, your job is to prepare the next generation for multigenerational growth.

Wishing you happiness, health and prosperity in 2016.

12/24/15

A Family-Business New-Year’s Resolution

In the blink of an eye another year has passed, and resolutions for 2016 may be creeping into our thinking.

The closing of the year bestows a blessing; it encourages reflection–pressing us to review our individual accomplishments, our persistent challenges, what we are grateful for, what more we hope to accomplish, and who we would like to become as a person. Equally it affords an opportunity to reflect on the future of our family business and its significance to our families and ourselves.

Here are some practices inherent to successful multigenerational family businesses that you might resolve to begin in 2016:

  1. Devote time to better communication within the family
  2. Commit to professionalizing your business – working on it rather than just in it
  3. Establish a family council
  4. Develop a family hiring and employment policy
  5. Begin the discussion of succession
  6. Hire outside expertise
  7. Create a strategic plan

Wishing You a Happy and Prosperous New Year!

12/13/15

The Last-Minute Succession

In his recent blog, entitled “the last minute,” Seth Godin writes “I’m not good at the last minute. It’s really fraught with risk and extra expense. I’m much better doing things the first minute instead.” http://sethgodin.typepad.com/seths_blog/2015/12/the-last-minute.html

For a family business, ‘last-minute succession planning’ is similarly afflicted and is, sadly, too often what takes place. Successful succession involves much more than the final transaction that formally transfers ownership. ‘First-minute’ succession planning is a process of ongoing conversations among family members regarding the values and vision the business will carry into the future. These talks function to define the business’ culture, create governing policies, teach wealth management skills, identify and develop next-generation talent and leadership.

To see my video blog on this topic, CLICK HERE.

11/21/15

The Not-Ideal Path

Seth Godin recently wrote a blog post titled Natural Light. http://sethgodin.typepad.com/seths_blog/2015/11/natural-light.html.

In it he describes two ways of making things. One way is to tightly control conditions. To ensure consistently of outcome, pre-process the inputs so that all raw materials are precisely the same every time.

The other way Godin calls “the path of natural light.” Take what you get. “Embrace the idea that the conditions will never be ideal, which of course makes them always ideal because the thing about natural light is that whatever it is, is.”

My experience is that raising children and integrating them into your family business is more often successful when the path taken is the way of natural light. The differences that exist between and among you, your children and other family members are part of what makes a family business succeed.

To achieve this outcome requires participation in creating a vision for the future of the family and the business under the leadership of the next generation—and willingly relinquishing control of the results.