As many of you know, I do a fair amount of consulting with family owned businesses. One of the common issues I help business owners and their families work through is the sale of their business (either preparing to do so, or dealing with the results afterward). Recently, a friend who meets with a number of business owners starting to think about selling their businesses asked me to outline some of the key issues that I help families think through. Here is what I came up with:

Integrating Business Ownership Succession, Business Management Succession, and Personal Estate Planning. Most people don’t distinguish between ownership succession planning and management succession. This creates significant problems — especially when the owner wants to sell but the company doesn’t have the management ready to take over the company. Often we have to work to develop a “bridge plan” for getting an interim management team, so the sale can occur.

A second common problem is when the owners’ personal financial estate planning isn’t integrated with business succession planning. Business owners want to get their financial investment out of the company when they sell it, but if not done correctly, they can pay excessive capital gains taxes.

How will the sale of the business affect your family? The sale of a family business significantly impacts the whole family. This includes family members who work in the business and those who do not work in the business. There can be issues of “fairness” within the family — those who work in the business may lose their jobs (or the perks previously associated with ownership). But if they own some of the business, they can reap a large financial benefit while non-owning family members get nothing.

A secondary, but significant issue, can be the impact of the sale on the career development for succeeding generations. If the family has a large influx of money from the sale, this can create challenges (and disincentives) for career development for younger family members. How the sale is structured — and how things are communicated to the family — can help avoid these issues.

How do you decide how much money to give to family members? Key questions we work to answer are: How much is enough? How much is too much? In reality, we have learned these are not the most important questions. Rather, we have identified the key factors that avoid destroying family members with money.

What plans do you have to keep the family together in the coming years? Often families in business communicate primarily about the business when they get together. When the business goes away, many families struggle to stay together — they have no history or tradition for family gatherings outside of the business. So they need to answer questions like: What will be the basis for family interactions and gatherings? What type of communication process will be in place? How will you keep the extended family connected?

The most common “big impact” mistakes owners make when selling their business:
-Not involving their spouse in the process.
-Not preparing their children for managing the wealth they will be receiving.
-Not involving children’s spouses in the process.
-Not integrating the sale of the business with their personal / family estate planning, and paying unnecessary taxes.
-Not developing an adequate plan to finance buy-sell agreements
(between family members, or in the case of death).

The reality is: Most business owners and families need help both “thinking through” and “working out” a business succession plan. My advice to business owners: Don’t risk losing two of your most valuable assets you have spent years building (your business and your family) by making un-informed decisions. A little “pre-work” with a family coach can go a long way to saving a lot of heartache later on.

In my role as a family coach for wealthy families, one of the common issues that arises is the parents’ desire to be “fair” with their children and grandchildren. (I put “fair” in quotation marks because it really is an unusual term that is defined differently by many people and is almost totally based on perception.)

For whatever reason, and I really don’t know exactly where it comes from, fairness is an extremely important issue in our culture that drives many decisions within families. Take, for instance, this past week’s events over Christmas — parents (regardless of their financial status) are quite concerned about giving the equivalent financial value (or perceived value) in gifts to their family members.

There are many challenges related to parents or grandparents trying to be fair with their family members. Let me cite a few:

The “givers” have their own perception of what is (or should be) fair. Most people have a hard time accurately or concisely describing what “fair” is, but they sure have a strong sense of it intuitively. Often it is described in terms of being “equal”, but when pressed about specifics or circumstantial differences, the concept of equal usually fades into the background.

The “receivers” usually have a different view of fairness from the givers (and from other receivers).Most of the family members with whom I work are genuinely grateful for any gift they are (or will be) receiving. The adult children and their spouses do not appear to be greedy, unthankful or have a sense of entitlement. They understand that the “givers” have the right to do whatever they want with their possessions. Nonetheless, when probing deeper, they often express a different viewpoint of what would be “fair” in how the gifts are distributed across the family — often not to their own benefit but out of concern for one of their siblings or in-law’s.

What is “fair” changes over time (pretty easily and often). Let’s take the recent volatility in the financial markets and real estate values. Suppose, in May 2008, some parents gave one of their children $100,000 in a blue chip stock; they gave their second child a house in Atlanta worth $100,000; and they gave their third child $100,000 in cash to use as they wished. Let’s assume each child wanted and agreed to the form of the gift they received (this isn’t always true, you know). So not only were the gifts “fair”, they were exactly equal in monetary value in May 2008 (which is an unusual occurance). But fast forward to May of 2009. The blue chip stock lost 40% of its value, so it is now only worth $60,000. The home in Atlanta lost 50% of its value and can’t really be sold for virtually any price. And the $100,000 in cash is worth $102,000 after they earned 2% on it in a money market account. Are the gifts fair now? Should the parents do some additional giving to make the monetary values equal?

When do you want fairness to exist? When do the givers want things to be fair. Now? Next year? When the business sells? When everyone has completed college? When dad dies and his life insurance proceeds create cash to equalize the gifts given? When both parents die and everything will be “equaled up”? “When” is an important question to answer — for a number of reasons. First, you have the most control over events closest to the present. So “now” seems to be a pretty good option. However, you may not have the liquid assets to make everything fair now, so “now” doesn’t work for many families. Secondly, the further out the “when” is, leaves more variables to chance and the likelihood of fairness not being achieved. Is it “fair” to your second child to wait until the business sells (say in 5 years) to make things fair, and they get divorced and become a single parent needing cash flow two years from now? Or is it “fair” to the eldest child who is running the business (and buying it from you) to wait to realize their inheritance when they sell the business (potentially) in twenty years? I can run a lot of scenarios that create problems.

So what do you do? Give up on the ideal of “fairness”. Maybe, but probably not. I try to help families (usually the senior couple or single parent) clarify what being “fair” means to them, to the best of their ability currently. Secondly, answering the question “when” is critical — and it differs significantly across families. Finally, I encourage family members to think more in terms of values, rather than fairness. Since fairness is a moving target across time and is perceived differently by almost everyone involved — I find making decisions based on what is important to you as a better guideline.

Is education for the next generation important to you? Then figure out a way to fund that. Is affordable housing important? Then figure out a way to help younger family members achieve this goal. Travel? Stay-at-home moms for your grandchildren? A financial safety net? Guaranteed health insurance? Whatever is important to you — pursue that as a gift.

You will eventually have to make some decisions about what you view as being “fair” — assuming you have more than one child. Do you try to equalize your gifts to your children? Or do you try to equalize them at the grandchild level (one of your children has two kids; his sister has three kids; and the youngest has one of his own and three stepchildren)? It’s not easy. But, hey, that is what I am here for — to help you think and talk through the issues, so you can come to a decision you can live with.

Remember, you don’t have to have a lot of money or “stuff” for this to be an issue. Dividing up the household furniture and belongings raises the same issues. Whatever you do, don’t let one of your kids or grandkids (who does have a greed or entitlement issue) “guilt” you into making decisions you don’t want to.

Until then, have a great and safe New Year’s celebration.

I started reading a good book this week — A Game Plan for Life: The Power of Mentoring by John Wooden and Don Yaeger.  It was recommended to me by a good friend, and I always try to pass on worthwhile reading to others.

The first part of the book covers the seven mentors that influenced Coach Wooden (for those of you who don’t know, he was one of the most successful college basketball coaches of all time, at UCLA). In discussing different types of mentors (professional, personal, spiritual, etc.), he makes a fascinating point:

• “I know that my life has been blessed with incredible opportunities, and as a result, I have a responsibility to reach out to others to share the insights, experiences, heartbreaks, exhilaration — all the lessons I’ve managed to accrue through the nearly one hundred years that God has given me on this planet… Knowledge is nothing unless it is shared.  I know that knowledge for knowledge’s sake is a wonderful ideal, but in reality, it is the transmission of understanding that is the very basis of civilization.” (p.7).

As I work with multi-generational families and family-owned businesses, one of the core principles we emphasize is the process of transferring knowledge, intellectual capital, and life experiences from the senior generations to their children and grandchildren. It is not an easy process — I think it is one of those “important but not urgent” activities that Stephen Covey emphasizes.  Part of my role as a family coach is to help structure activities and processes to help make the transfer happen.
And as we come upon the Thanksgiving holiday, I tend to think about how to best use our time together as a family.  What traditions do we want to keep doing?  Which traditions really aren’t that important or have lost their meaning?  What conversations do I want to have with my adult children when they are home?  What information or life experiences do I want to share with them?

Here are seven “lessons for life” that John Wooden’s father shared with him on a card given at his high school graduation:

1. Be true to yourself.
2. Make each day your masterpiece.
3. Help others.
4. Drink deeply from good books.
5. Make friendship a fine art.
6. Build a shelter against a rainy day.
7. Pray for guidance and give thanks for your blessings every day. (p.13)

Think about those who have impacted your life and the lessons you learned from them — both from direct instruction and from their modeling.

And then think about what you want to pass on to those who are important to you.  Maybe take some time and share a life experience with someone younger: “You know, I was thinking about … and a lesson I learned. . . . “

Have a great week.

Most of the work I do is with families — family-owned businesses, families who work together, families who have sold businesses and now manage the resulting assets together, and just plain families.  And in my everyday life I have the opportunity to interact with and observe families of all configurations.  Add my own personal life, of being a son, and the father of four adult children, and I have a fair amount of data to draw from.

Fathers and sons are interesting in how they relate.  Dads, especially when they are younger and are raising young children, seem to focus largely on providing for their families (a home in a safe environment, good schooling opportunities, and other life experiences which they value) and on character development.  Dads (and moms) tend to what to make sure their children are obedient, not whiners, tell the truth, are hard workers, and become responsible for themselves as they grow older.

When sons become older teens and young adults, the dynamic changes.  Since dads want their sons to become independent young adults (and the sons want this, too!), a tension is created — how to continue to give input and guidance into their sons’ lives while also respecting their independence and individuality.  And this is often a difficult balance to maintain.  I have seen men who totally “back off” out of their sons’ lives to the point that their sons have felt almost abandoned.  That usually wasn’t the father’s intent; they just didn’t want to be overly controlling with their sons.  But sometimes the sons would like more input from their dads (when they ask for it) and can get frustrated of not really being able to learn from their dad’s experience. (This sometimes happens when the father had an overly controlling father themselves and they don’t want to repeat the pattern with their children.)

An interesting fact to remember is that guys tend to build relationships by doing something together.   That is why they get together to watch sports (or go to sporting events together) and the variety of things that guys do — hunt, fish, shoot hoops, play video games, work on cars, go biking, work on a remodeling project together, and so forth.  Guys tend to talk while doing something else — as opposed to most women, who value getting together just to talk.

So a challenge for dads and their sons, as both get older and their lives become separate, is finding activities they still can (or want to) do together.  And this can be especially challenging if the father and son work together (because the son usually doesn’t want to “hang out” with dad after work.)

My relationship with my dad was largely built around working on projects together, especially on Saturday mornings.  I learned a lot of practical skills but it was also challenging because my mechanical skills are virtually negative, while my dad was a self-taught mechanical engineer and designer.   Since his death fourteen years ago, I have frequently missed the opportunity to call him up and ask his advice on various home projects or repairs I had to do.

Largely from his modeling, much of my time with my sons was also on working projects.  Ask my guys about “Saturday mornings” when they were growing up, and you may hear moans, see their eyes roll, and one of them will launch into what a slave driver I was (which is probably partially true).  I also enjoyed playing basketball, football or soccer with them, and going to their practices and games.  We still enjoy watching some sports together.

The difficulty with this approach is that it can become largely task-focused (getting the job done) or the sporting event doesn’t really allow for much significant conversation to occur.  Finding time to talk about important topics in life is still an area I find difficult.   Probably the most significant discussions occur when my kids come home for dinner and we have some to time to discuss deeper issues during and after the meal.

A key point (and one made by many authors of parenting books) is that sons (and daughters, too) really are looking for affirmation from their dads.  Kids (regardless of their age) want to know that their dad likes them — that he loves them, accepts them, and is proud of who they are becoming.

Most of us dads (myself included) are pretty lousy at communicating acceptance and affirmation of our kids.  We are so anxious about them “turning out bad” that we are constantly prodding them, pushing them, correcting them, and encouraging them to learn to make good choices, that the message our children receive is one of conditional acceptance.  I know this either is or has been an issue in my relationship with each of my children.  I personally find the tension of helping them develop the character qualities that are important to me, while at the same time demonstrating love, affection, affirmation and acceptance to be a difficult line to walk.

I am open to hearing your thoughts and input on building healthy relationships with sons, as you both move forward in your walks toward maturity.

Often, when talking to senior generation members within a family, we discuss how to transfer one’s values to the next generations.  Sometimes we are talking with parents in their 30’s, 40’s and early 50’s who are still raising their children and teenagers at home.  Other times we are talking to 50-60 year olds with young adult children out of the home.  And many times we are talking to older adults, from mid-60’s to 80’s who have the opportunity to impact their grandchildren’s lives.

Many times the term “mentoring” is used — the process of teaching and modeling various life principles in relationship to a younger family member.  Typically, I find that, although grandparents and parents of adult children want to mentor the next generations, most of the time that don’t really know what that looks like practically.  [In fact, part of the coaching I do with families is to help the senior generation explore this issue, develop a specific plan for mentoring their grandchildren, and help bring resources and structure to the process.]

As a parent of four older “children” (17 to 25 years old), I have had plenty of opportunities to make mistakes in the parenting process (my children would be glad to give some examples!)  And, as I look back over my life, I can see ways that I tried to teach or train various skills and character qualities that didn’t work so well (and I see other parents repeating my mistakes).

One basic mistake is to primarily drag them along with what I am doing and try to teach during this experience.  I say “primarily” because I do think there are times when children / grandchildren can (and should) “tag along”, and they can learn during this process.  This can include running errands, going shopping, working in the yard, doing projects around the house, helping someone else out, going with their parents to meetings or events of interest to the parent.  However, if this is the primary modality of teaching, I think the young person will lose interest, resent coming along, and eventually “shut down” relationally.

Generally speaking, I think it is far better to find ways to “enter into” your child’s or grandchild’s life — come along side and find a way to participate in what they enjoy and are interested in.

I see this even with really young children - two to five year olds.  Many times parents [read: dad’s] and grandparents want to “play with” the young child — but the adult wants to structure the activity in a way they think is best, or try to get the child to do something the adult thinks is a “good” educational activity (or something that will be “good for them”) rather than just getting on the floor and playing what the child wants to in the way the child wants to.  And then everyone gets frustrated when the child won’t do it the way the adult wants, or loses interest.

This occurs in school-aged children, and clearly with teens.  One way many dads try to “enter in” is by coaching the student’s sports team.  And that can be a really great way to experience life together — but it can also be a disaster if the parent becomes more focused on success / winning / achievement than on being together in the experience.

One approach we have had to parenting is to try to do fun things with our kids and invite their friends to come along — that way we get to know their friends, we get to observe how our kids interact and treat their friends, and we can have more input on what’s happening.  We had the opportunity to take kids waterskiing, have them to our place for bonfires or playing “Capture the Flag”.  And I happen to be known in our school circles as the dad who takes his teens out to “T.P.” or “fork” their friends (or teacher’s) homes.

The past few weeks I had the unique opportunity to participate in a high school musical production with my daughter, Lizz, who had a lead role.  Being in musicals is one of her favorite activities (and I had done some in high school and colllege), and when the director mentioned they needed an adult male for a cameo part, I thought it could be a neat way to “enter into” that part of her life for a while.  And it was.  I got to know a number of her friends better.  She and I had a shared life experience — including the anxieties of learning our lines, the joys and laughter during rehearsals, the spontaneous things that happen — and that you can only experience by “being there”, and the satisfaction of a performance well done.
Doing activities with your children and grandchildren is extremely rewarding — but is also costly — it takes time and you have to give up other activities or priorities in your life (remember, you can’t do everything).  But I think most parents and grandparents who make the investment, believe it was well worth it — we’ll have to wait to ask the kids and grandkids to see how it impacted them.

So, next time you are thinking about character development and training for the next generations in your family, I would encourage you to ask yourself:

How can I enter into what they are doing or interested in and have an impact by coming along side them?

A much talked about issue in the area of wealth transfer and family business succession is the desire to “transfer our values to the next generations”.  This is a valiant goal and one which should be true for every family regardless of wealth status — training your children and grandchildren in ways that they will instill values that are important to you.  Really, the heart of the matter is not just to teach them values which are important to you, but to teach them principles and ways of thinking that will help them be successful in life.

“Values”, after all, are ultimately relative — and I would argue that some values are more ‘valuable’ in life than others.  For example, the values of “appearing successful” or “having others think well of you” can actually lead to choices and patterns of behavior that can become self-destructive.  Whereas the values of “treating others with dignity” and “conducting all business matters with utmost integrity” are principles for behavior that I believe are more foundational and will lead to positive results in one’s life.

Many families are enamored with the idea of creating a list of their family’s core values and / or developing a family mission statement (most families, I believe, are interested in doing this because they’ve heard it is something they should do if they are going to be a successful family).  And I think these can be helpful action steps within the larger process of actively talking about the family’s core values. [In fact, one of the services I provide professional is to lead families through these processes.]

But a key question I ask families is: “How are values transferred to the next generations?”  The most common answer is — by observation.  And this is true.  Children and grandchildren observe older family members and take cues on how they should behave from them.  But, as I often tell parents of young children — children are excellent observers but they often are poor interpreters.  They watch us and see what we are doing, but they often misinterpret the actions and even more frequently misinterpret the purpose or reason behind the action.  As a result, learning by observation by itself is a poor teacher.

Modeling behavior (including choices made, and the values which they represent), I believe, must also be accompanied by verbal explanation — both of what we are doing and also why we are choosing this action.

We have an old family story that one of my grandmothers always cut off the end of a pot roast before putting it in the roasting pan and baking it in the oven.  When asked by her daughter why she did this, she replied: “Because you are supposed to — that is how my mother cooked her pot roast.”  She later found out that her mother cut off the end because her roasting pan was small and the typical roast would not fit in the pan!

Similarly, I believe it is critical for parents and grandparents (and aunts and uncles) to verbal communicate what is important to them and why these beliefs or principles undergird how they live life.  (On the lighter side, the holidays provide a rich opportunity for family members to ask about various family traditions — where they came from and why do we do them?)

An excellent way to share important principles and values is through storytelling.  Although listing principles in bullet form works well in articles and books, that is not typically how we talk conversationally (although some family members who are instructors may say: “Let me tell you three reasons why … First, …  Second, … and finally, ..”  But most of us don’t have to endure such mini-lectures.)

Stories are excellent communicators of values because they have several engaging characteristics:

• They are personal.
• They can be quite engaging and entertaining.
• They use real life examples to show the benefits of good choices and the consequences of poor choices.
• They (when told by a good storyteller) involve one’s thoughts, emotions, and sensations.
• They are easily remembered.

This past week our four adult children have been home for the Christmas holiday.  We have attempted to tell various stories about earlier events in our lives — to help them learn (both positively and by our mistakes) from our life experiences.  Additionally, I spent some time with my mother, who grew up during the Great Depression, and asked her to tell me lessons she learned during that time.  In addition to a few principles, she also related a variety of family stories that helped communicate some of the ways our family survived during the Depression (e.g. family members helped one another out).

Most people, when I mention the idea that they should use time together with their family to tell some stories, reply: “Oh, I’m not a good storyteller” or “I wouldn’t know what to talk about.”  So let me give you some ideas for story “starters”.  Talk about:

• Memories you have about your grandparents — things you used to do with them.
•   Character qualities or talents you remember about your parents or grandparents.
•   Something special you remember getting or doing on your birthday when you were growing up.
•   Vacations you went on as a child and any memorable events that occurred on them.
•   What Christmas was like when you were little — what were the traditions at your grandparents’ homes?
•   How you met your spouse; about your dating / courtship / engagement; the early years of your marriage — where did you live, what kind of work did you do?
•   Some jobs you had when you were younger — including positive lessons and negative experiences.
  

Another way of approaching the storytelling is to think of values and principles which are core to you, and which you believe would be valuable for your children and grandchildren by which to live their lives (honesty, hard work, frugality, kindness, humility).  Then think of a family member who embodied that value and tell your family a story about that person and how they demonstrated that characteristic.

As we complete this year and look forward to the New Year, and as you have time together with family, I’d like to encourage you to actively think how you can teach them something of value — tell them a story that will help them learn valuable ways of living.

I have had a number of situations recently where I have been involved in family situations where two members of a couple have come from significantly different levels of financial resources.

The following are more in the category of “in process” observations — thoughts and reflections that I have that are still developing and not fully complete yet.

• Coming from different financial backgrounds is a relatively common occurance for couples.  Why?  It is really statistical in nature.  There are more individuals who come from middle, upper middle, and even fairly high income families — as opposed to the number of individuals who come from ultra high net worth families.   So there is clearly a higher probability that someone from an ultra high net worth family will find a life partner from a lower financial situation than their family’s.
• No matter how functional the individuals are, or how healthy the relationship is, there will be significant challenges experienced.  Long-term relationships are difficult.  And being (or becoming) a healthy, responsible adult is no easy task.  When individuals come from significantly different personal and family backgrounds (regardless of the types of difference — ethnic/cultural, religious, educational, SES), this creates challenges for the couple to understand each other’s perspectives and worldviews.  This, in turn, creates difficulties in communicating clearly, not jumping to incorrect assumptions, and being able to empathize with your partner.
• Relationships with in-law’s (parents-in-law, siblings-in-law) and other extended family members are the source of much of the tension experienced.  This is not to paint in-law’s or extended family members as the “bad guys” in the situation, but the fact of the matter is: expectations from your spouse’s family (and the resulting “in the middle experience” of the spouse) are the starting point for many conflicts.  Expectations about holidays, vacations, your career pathway, where you live, how you raise your kids — all are deeply rooted in one’s financial status and resources.  So when individuals within a couple come from significantly different financial backgrounds, tensions arise in these daily life decisions.
• What is “no big deal” to one person (or family) can definitely be a “big deal” to another person (or family) — and the resolution of the different perceptions has nothing to do with logic.  Family values, traditions, and ways of being have little to do with logic.  When (or whether) you open Christmas presents; how you celebrate birthdays; the amount of money you spend on clothes, fireworks, sporting events, cars or art; the need to attend a great aunt’s birthday party — none of these decisions are purely logical.  They are influenced by personal experience, family history, individual preferences and probably lots of other things.  As a result, trying to convince another person that what is important to them really isn’t that important usually doesn’t work.  The best response is to listen intently to what the other person is saying, try to understand their worldview to the best of your ability and accept (and affirm) that what is important to them is important to them (even if you don’t understand why.)

There is a lot more that could be said — and many of you just had a bunch of personal stories triggered in your memories (share them, if you wish).  Let’s stop there for now.

Have a great week!

It seems to be appropriate week to write about women and the family business, given the high profile of women in politics this past week (Hillary Rodham Clinton’s eloquent speech at the Democratic National Convention, and the selection of Governor Sarah Palin as the Republican vice presidential candidate).

Six female authors have recently published A Women’s Place . . . The Crucial Roles of Women in Family Business. Five of the authors are directly involved in family-owned businesses and all of them are consultants with The Family Business Consulting Group, Inc. In the introduction, they indicate the book is not only for women in business, but for family businesses in general (many of whom may need to rethink their positions on women in the business), and for family business advisors.

In one of the first chapters of the book, they list a variety of roles women typically embrace in business-related families. The list, in and of itself, is insightful and causes pause for reflection on the variety of roles women hold (like men, many are held simultaneously):

Business Founder. Financier. Owner / Shareholder. Co-president. Emergency leader. Back room support. Innovator. Advisor and confidante. Nurturer of the next generation of leaders. Family business board member. Board Chair. A groomed CEO or senior executive. Family leader. Family foundation leader. Individual philanthropist. Ambassador. Employee. Mentor. Family historian. Steward.

As consultants, the authors share some themes they are seeing among family-owned businesses:

• More and more women are working in their families’ businesses
• Women seem to have more work experience before they have children
• Given increasing longevity, there are more work-related years available after children are raised.
• There are more daughters partnering with their fathers and mothers in business.
• The movement toward more service economy businesses appears to make business more amenable to women.

The authors suggest a number of steps to family businesses for helping young women prepare for significant roles in their family’s business. I found a number of them to be wise words to heed:

a) Start early. Regardless of gender, family members need to be exposed to the real workings of the family business early in life, and in multiple ways across the years.

b) Don’t leave the girls out. Think about it. If a family business disqualifies women from leadership, they may be reducing 50% (or more, depending on the family makeup) of potential future family leaders.

c) Avoid creating an environment where are the role models are male. Great point – if all the mentors are male, it makes visualizing oneself in and identifying with the role model more difficult.

I have been fortunate to work with a number of women in family businesses, and like the list above, they serve in a variety of roles:

*owner and CEO of a manufacturing business
*co-founder and principal researcher in a high tech firm
*VP of marketing and business partner with their spouse
*business owner of a professional services firm
*co-chair and leader of the family foundation
*individual philanthropist and change agent
*Board officer and confidante
*mentor to other women in philanthropy
*family leader.

One theme I have observed in this collective group of female leaders is the inner strength that each of them has. Having been raised in a more traditional Midwestern family, in which the business side of the family was patriarchal, it has been an interesting experience for me to see how women often lead very differently from the traditional male entrepreneurial stereotype – and how effective their leadership is.

I am looking forward to learning more as I complete A Woman’s Place . . . , (there is an chapter on Work/Life Balance that looks interesting) but even more so, I am eager to learn how to lead (if it is possible for a guy) like many of the woman I see – effectively, decisively, but with more attention and focus on the human side of business.

There is an old saying, “It is good for brothers to get along”. And it is true. But one of the most frequent problems I see in my work is the challenge of brothers “getting along” in business. And the issue plays out in many different ways and settings:

*Brothers who have been working together for years (and now are in their 50’s, 60’s and 70’s) and have built a successful business together, and are now in conflict about business succession issues — especially about how and whether the next generation should be involved in the business.

*Adult sons of the business founder who are working in the business, in different roles and levels of responsibility, and struggling with what is fair in compensation, power, influence and privileges.

*Adult children (for it is not always just brothers, but their sisters, too) — some of whom are in the business, some who are not directly involved in the day-to-day management — who are owners together and have significant conflict over the direction of the business and how resources should be distributed (i.e. dividend distributions, bonuses for the managing owners).

*One or more siblings who are working hard, taking their responsibilities in the business seriously, along with one sibling (usually a brother) who is “coasting” — not working very hard, not putting in the hours, not getting the job done — but who is pulling the same benefits (income, perks) and playing a lot more than his siblings. Result: plenty of resentment to go around.

There are lots of variations.

You may or may not remember that I grew up in a family owned business (a manufacturing company). I am the youngest of four sibs, and although I did not work in the business as an adult, I was an owner and on the Board. My two brothers worked in the business (as did my sister later on) and we had our own challenges — personality differences; some were owners and managers, others (me) were non-managing owners. So I speak from experience — it is good for brothers (and sisters) to get along. And it is a pain when you don’t.

You may have heard that there are two “CEO’s” in family businesses: the Chief Executive Officer, and the Chief Emotional Officer. The latter is often the matriarch in the family system (she may be the wife, mother, mother-in-law, or grandmother depending on the stage of the family). And one of the (self-imposed) roles of the Chief Emotional Officer is try to ensure that everyone in the family gets along. (Good luck!)

In fact, when identifying goals for the family and the business, the most frequent goal cited by the matriarch is either: “I just want everyone to be happy.” or “I would like everyone to get along peacefully.”

So, what is the point, practically? First, it may be helpful to recognize that conflict between brothers in business is a common occurrence. If this is your current (or past) experience, you are not alone.

Secondly, it is an important issue to pay attention to. Many successful businesses have been shipwrecked by unresolved conflicts among siblings in business together. It is to everyone’s benefit to address issues early, before they become unresolvable.

Finally, it is critical to recognize that relational issues — trust, healthy communication, acceptance of differences, resolving conflicts in a healthy way — are just as important for the long-term success of a family-owned business as are good management and execution of the business plan.

If you, or your family’s business, is struggling in this area, I’d love to help you work through the issues in a way that will bring a positive resolution. If I can help, let me know.