Latest News

Solving the Puzzle of Ownership Alignment in a Family Enterprise

Monday, 14 August 2017

alignment  noun | ə-ˈlīn-mənt State of agreement or cooperation among persons, groups, nations and the like with a common cause or view

 

Read more


Seven Steps to Recruiting Value Add Independent Directors

Monday, 14 August 2017

Incorporating independent directors into a family firm’s board is considered one of the standards for family business success. The prospect of

 

Read more


Delivering a Difficult Message: Performance Feedback in a Family Business

Monday, 14 August 2017

“My brother is not pulling his weight at work, which means more work for our mother and me. I don’t know what to do about it… so I do nothing,

 

Read more



Solving the Puzzle of Ownership Alignment in a Family Enterprise
Monday, 14 August 2017 19:36

alignment  noun | ə-ˈlīn-mənt
State of agreement or cooperation among persons, groups, nations and the like with a common cause or view point.

 

 

Successful ownership alignment is a continuous process rather than an end or accomplishment in itself. The ever-evolving, complex life cycles of the business, family and individuals cause constant shifts in perspective, goals and interests over time that make true continuous alignment an elusive and dynamic pursuit. Ownership alignment is more like an ongoing cycle of seeking and building consensus, then having it fray and unravel only to rebuild it all over again. If you recognize this precarious and fragile cycle for what it is then you develop a greater appreciation for why it is so important to invest constant effort and time into the processes and structures that help families strengthen their capacity to maintain alignment as they transition through the generations.

Through my work with family businesses across sectors and my own experience as a family business partner, I think about alignment or misalignment amongst the ownership group as being analogous to a puzzle. I see the ideal picture of family enterprise as representing the rewards of ownership where owners derive not only monetary benefits, but also deep emotional satisfaction. This gratification stems from their individual and collective roles within the enterprise — whether as family member, shareholder, employee, executive, director, or some combination — and from strong alignment among the ownership group.

Now imagine that picture is broken up into puzzle pieces. Exactly how each puzzle of the family enterprise can come together to form that ideal picture will vary from family to family. Some families do a much better job than others of “solving” this complex, ever-shifting, real-life puzzle by creating and maintaining alignment, even in highly challenging circumstances. Some struggle with alignment for decades.

So how can your family improve the speed and accuracy of work on the puzzle of ownership alignment? This article answers that question by describing four alignment-critical dimensions of ownership in family enterprise.

 

Focus on the Four Borders

Consider how most people first approach a table filled with disconnected puzzle pieces. Typically they start with the four border sections to create a solid frame for the picture and then to work within that frame. In the same way, the four border segments of the ownership alignment puzzle are critical for setting the continuity process up for success. They include the following:

  1. Vision of the family, the family legacy and the family enterprise
  2. Values by which the family operates on all dimensions of the enterprise
  3. Leadership at the senior level and throughout the ownership group
  4. Governance structures, processes and communications to promote better decision-making and relationships

FBCG_0013-17_Puzzle_Graphic_V2

 

 

Getting these four framing pieces of ownership alignment right through committed deliberation and action is critical for ownership alignment and its intending benefits. An ownership council can be a forum to discuss and seek alignment around these dimensions, but broader, informal related conversations and action should happen through the family.

Let’s consider each of the four borders in more detail.

 

 

1. Vision

A common vision can promote alignment and rally owners to take action to bring it to life. In many cases, family enterprise members focus mainly on their vision for the business: what they want its mission and related strategy to be, now and in the future, as related to potential returns and other metrics such as community impact. That’s certainly important, but vision is also about the family and its legacy.

What do family members want for the family in terms of cohesiveness, relationships and longevity? What kind of legacy do they want to leave through the enterprise?

Asking those questions in the context of vision — whether informally or as part of a more formal visioning exercise — can lead to much greater shared understanding among owners and, ultimately, alignment around priorities and goals moving forward. Owners also feel more emotionally engaged by a compelling vision of family and legacy, further promoting alignment.

 

 

2. Values

Values and vision go hand in hand, as the former will always shape the latter.

Shared values also inform owners’ decision-making around the business. This can, of course, happen at the level of mission: What is the business’s main reason for existing? But values can also relate directly to business practices and offerings. For example, members of a family who own a hotel chain may be against offering adult TV content in rooms, based on their values. Similarly, the collective values of family owners of agricultural businesses will inform whether the business uses pesticides or GMOs or how it manages animal husbandry.

Values also guide how the family, especially members working in the business, will interact with employees (treating them like family, for example), and how the business will interact with customers, suppliers, and partners (seeking win-win negotiation terms, for instance).

Again owners need to apply an understanding of their collective values to the family, as well. How will we interact with one another? What do we value most, whether respect, trust, communication, or some combination? Do we wish to promote a feedback-rich culture? If so, how?

Answering value-related questions helps owners uncover a set of shared values and use these for better-aligned understanding and decision-making around what they want the business and family to be.

 

 

3. Leadership

Leadership may start at the top, but it permeates every level of the family and organization, significantly influencing alignment among owners.

Whether acting as CEO of the business, board director, ownership council or family council leader, individuals in positional leadership roles set the tone, culture, and actions related to ownership alignment. A leader can and should ask of the broader ownership group: “How important is ownership alignment to us and how can we maximize it?” But personal leadership is also important throughout the family, whether related to a formal role or not.

Strong, consensus-focused leadership at all levels is especially important as the number of shareholders grow, as is the case in the cousins stage of family enterprise, where the number of owners can stretch into the tens or even hundreds. Leaders who evoke stronger alignment among owners and drive related rewards will:

 

  • understand the importance of “familiness”
  • see the big picture of where the family and enterprise are heading (for better or worse)
  • promote the family’s bedrock values
  • skillfully manage conflicts
  • inspire people to join in the family’s vision
  • bring together diverse perspectives

 

In contrast, leaders who tend toward autocratic styles will most likely disrupt alignment among owners with broadly negative consequences. This can take the form of nonconsensus-driven decision-making (“My way or the highway”), undermining of others’ influence or authority, or dismissing or quashing alternative opinions or points of view.

 

 

4. Governance

The final framing piece for ownership alignment is governance. This provides the structures and system for guidance, communication and decision-making across the family, ownership and management dimensions of the enterprise. Information for decision-making and the outcomes of decisions need to be shared across the enterprise, and governance mechanisms help ensure this happens.

There’s no single formula for how to build a governance system. Families vary widely with regard to governance structures and processes. Some have a full suite of governance bodies, including a business board with independent directors, ownership council, family council, shareholder assembly, philanthropic organization boards, and so on. Others have minimal formal governance features. It depends in part on the size and complexity of the family and business.

But the important thing is to be committed to the principle behind governance: sharing of information and decision-making for collective benefit. When this is the case, owners are much more likely to be aligned around all dimensions of the enterprise: values, vision, mission, culture, ownership goals and others.

In this way, we can see governance as helping to maintain the integrity of the frame for ownership alignment, by keeping the other pieces in place through formal/informal means of communication and relationship-building.

For example, one family has external evaluations of its board and directors as well as its family employees followed by leadership coaching and development sessions. This part of their governance system ensures they have the important conversations about how effective they are being as leaders of their family enterprise and how to strengthen the same.

 

 

Commitment and Skills Complete the Picture

While the focus has been on the four primary border dimensions that affect ownership alignment, it is important to mention two additional factors that influence alignment: commitment and skills.

Think of commitment as an invisible string or glue that holds the four framing pieces together. If owners aren’t genuinely committed to increasing alignment and its benefits, the strength of the other factors won’t matter. Things will fall apart in the enterprise and family, whether figuratively or literally.

Skills are also necessary for good alignment among owners. That is, no matter how committed people are to the enterprise, they will need skills to maximize quality and performance on all dimensions by navigating the enterprise successfully and helping others do the same. Skills represent the capability with regard to the four border segments presented here: vision, values, leadership and governance.

Specific skills that help boost the power of those framing pieces include curiosity, authenticity, listening, openness, conflict management, empathy, giving and receiving feedback, patience, forgiveness, the ability to ask good questions, and others that can be thought of broadly as reflecting “emotional intelligence.” Such skills not only reduce anxiety in the enterprise, but enable members to identify and bring out their best for collective benefit.

 

 

Putting All the Ownership Pieces Together

The analogy presented suggests that it’s like working on a constantly changing, three-dimensional puzzle with thousands of pieces. But like any skilled puzzle-solver, you can make this challenge easier by focusing first on the framing pieces — vision, values, leadership, and governance — and ensuring strong levels of commitment and skill to support the effort.

In this way, you can continue to craft the ideal picture of your family enterprise, as built on a truly aligned ownership group.

 

 

 

 

 

 

Source: https://www.thefbcg.com/solving-puzzle-ownership-alignment-in-family-enterprise/

 

 
Seven Steps to Recruiting Value Add Independent Directors
Monday, 14 August 2017 19:24

Incorporating independent directors into a family firm’s board is considered one of the standards for family business success. The prospect of finding independent directors who can both challenge business leaders and represent ownership interests can be daunting. Following these seven steps will help identify directors who will add value to the family business enterprise.

 

 

1. Establish a Nominating Committee
Identify three to four people to manage the director search process and recommend candidates to the board, which is responsible for electing a new director. The nominating  (or governance) committee can facilitate an inclusive process, incorporating stakeholder perspectives to identify candidates who will support the needs of the business and the shareholders.

 

 

2. Collect Stakeholder Opinions 
Soliciting stakeholder opinions on the characteristics of a new director gives participants an opportunity to express their point of view and will make it easier to accept the ultimate conclusion of the board. It is helpful to:

 

  • Review strategic challenges and board member expertise – Consider how your industry is evolving and the degree to which the business is prepared. What parts of the strategic plan are new territories for management? What skills might a new director have to support management in executing the plan?
  • Assess the board’s culture and function – Clarify what you would like to maintain and what you would like to change. Consider the impact of near term retirements on the board’s culture and whether you are seeking a director who might become the chair in the future. What director characteristics are important to enhance the board’s functioning?
  • Consider family and shareholder dynamics – Independent directors who build relationships with shareholders, spouses and future shareholders can be valuable in creating alignment between the board and shareholders. What characteristics will be important for a new director to relate well with shareholders?
  • Explore potential added value for management – Ask management to identify specific skills in a new director that will be helpful to them. Taking into consideration the board’s view of management’s opportunities for growth, what attributes might a new director have to mentor to management

 

 

3. Create a Board Prospectus
As a tool for recruiting new directors, the prospectus outlines important factors about the business and the expertise desired, including:

  • A summary of the business’ history, products, markets served, strategic focus and size
  • Rationale for seeking a new director
  • Board structure, including number of independents, committees, meeting frequency and board fees
  • Board responsibilities
  • Desired director experience, attributes and education

 

 

4. Solicit and Review Candidate Pool
The nominating committee manages a process of circulating the prospectus to colleagues, advisors and personal contacts requesting candidate referrals. They collect and review candidate resumes to establish a pool of candidates whose background aligns with the prospectus, at least on paper. Using a firm experienced in searching for family business directors can be helpful in expanding the candidate pool.

 

 

 

 

5. Conduct Interviews
The nominating committee then narrows the candidate field incrementally until a qualified director has been identified. It is helpful to break the interviewing process into the stages noted below to compare candidates and share thinking about the right fit for the board.

a) Provide candidates with the prospectus and confirm their interest.
b) Interview each candidate via telephone.
c) Review the interview outcomes and identify a small group of candidates for in-person interviews.
d) Invite candidates to meet in person with nominating committee members.
e) Review the in-person interview outcomes, determining whether you have the right candidates to choose amongst. If so, move forward.
f) Consider the value of additional interviews or a chemistry fit social gathering with key stakeholders for the final candidates.

 

 

6. Decide
When you have identified a board candidate whom you believe has the right skills, values and cultural fit, extend an invitation. At that time determine whether or not the candidate is interested in accepting, contingent upon reference checks.

 

 

 

7. Conduct Reference Checks
Conduct reference checks and any additional vetting to confirm the candidate’s value add to other boards, their level of expertise, and, if they have had family business experience, the manner in which they were helpful to the family and business system.

 

 

 

 

 

Source:

https://www.thefbcg.com/

 

 

 
Delivering a Difficult Message: Performance Feedback in a Family Business
Monday, 14 August 2017 19:16

“My brother is not pulling his weight at work, which means more work for our mother and me. I don’t know what to do about it… so I do nothing, and the problem persists.”

 

 

For most people in most situations, delivering a difficult message is, well, difficult. Delivering a difficult message in a family business is typically even more challenging because of the multiple and deeply personal relationships that exist. Difficult messages must be delivered, though, and avoiding this task will likely only make matters worse. With the long-term success of the family business at stake in situations like this one, it’s essential to deliver those messages effectively.

We should remind ourselves why we want to give feedback in the first place and what it is we hope to accomplish by doing so. The need to deliver a difficult message typically starts with your perception that you have a disagreement with someone else or their performance is falling short of your standards. Since performance feedback is one of the most difficult messages to deliver to family members, we will address that specific case.

Your goals in delivering this difficult message are (1) to share your perspective in a way that your recipient will understand it, (2) to learn the other person’s perspective of the same situation, and then (3) to ensure that the performance shortfall is addressed so that sustained success can be achieved for the family and their business.

 

 

Soft start-up

Effectively delivering a difficult message requires work before the message is actually delivered. If you simply launch into your message, you will likely ambush the recipient… and most who are ambushed will be defensive and therefore not receive your message as well as they otherwise might. Using a “soft start-up” will help you to minimize this particular challenge and increase the chances that your message will be received as well as it can be.

A “soft start-up” introduces the idea of sharing feedback even before you actually deliver the message. In our example, if your sibling isn’t pulling their weight at work, you could introduce the discussion by saying: “There’s something I’ve been thinking about, and I want to share it with you. I feel it’s an important item and therefore will take us more than just a minute or two to discuss. When would be a good time for you to have this discussion with me?”

In my experience, recipients of the above request typically find time to talk in short order. However, if the recipient tries to delay the conversation significantly, then you can simply respond: “This matter is too important to wait that long. When could you find some time to talk in the near future?”

 

 

Sharing your perspective

Once you’ve established a time to meet (in a comfortable and private location), it’s now time to begin delivering your message. I have found that the most effective way to initiate the conversation is with a question: “I'd like to share some feedback that I hope is helpful. Is that okay with you?” In theory, the recipient could say “no,” and the conversation will come to a stop. Practically speaking, though, I’ve never encountered a situation where the recipient responds with anything other than a simple “yes.”

Asking for permission is important for a couple of reasons. First, it explicitly communicates to the recipient that you are about to deliver a potentially sensitive message to them. This gives them a few moments to prepare which will make it more likely that they will actually hear what you have to say. Second, you will feel more comfortable providing the specific feedback. You have, after all, just received explicit permission to do so!

After receiving permission to proceed, the most effective way to deliver the difficult message is using the following framework: “When you [describe the recipient’s troubling behavior], I feel [describe the emotions – some combination of happy, sad, angry, and scared – that the recipient’s troubling behavior triggers in you].”

The value of this simple framework is that it focuses on the recipient’s behavior (which is changeable), rather than their personality (which is not). It also allows the recipient to see how their behavior impacts others (namely you).

In the example that opens this article, this framework might be used as follows: “When you put in fewer hours at work and, as a result, are not as productive as the rest of us, I feel angry, sad, and scared. Angry because I feel like you are taking advantage of me, sad because I feel like I cannot trust you or depend on you like I once could, and scared because we are losing ground to our competitors who, presumably, have all of their key employees working their hardest.”

 

 

________________________________________

"If one of our goals for having a difficult conversation is to ensure that the performance shortfall is addressed,

then both parties need to be at their best when engaging in this conversation."

________________________________________

 

 

Offer to partner

Now that you have shared your perspective with the recipient, invite them to share their perspective of the situation with you. Occasionally, this step will provide the deliverer with important additional information that can clear up differences quickly. Even if this additional information does not resolve the situation, both parties now have the more complete picture that is necessary for improving matters.

 

While it might be tempting for the deliverer to walk away at this point – the bad behavior is, after all, the recipient’s problem – remember our third goal for having this conversation: ensure that the performance shortfall is addressed. Walking away at this point could provide the recipient with an “out.” If you sincerely want to increase the likelihood of addressing the recipient’s performance shortfall, you need to stay involved. So, offer to partner with the recipient as they begin to work on addressing the bad behavior. Depending on the specific issue, there is a virtually endless list of ways you can provide assistance, but a great way to start is to ask the recipient the following question: “What keeps you from [doing the desired behavior]?” Framing the bad behavior in terms of constraints typically leads the recipient to be more open to discussing the issues. Once you understand the constraints that the recipient faces in addressing this situation, you can best suggest specific options for improvement.

 

In our current example, asking the constraints question might reveal that the recipient is kept from pulling his weight at work because he feels he’s been placed in a position for which he is not qualified. If so, possible solutions might include a structured training and development program or putting the recipient into a different position for which he is sufficiently qualified. If, on the other hand, “What keeps you from pulling your weight at work?” reveals a different constraint (e.g., serious health issues afflicting the recipient’s spouse), then an entirely different set of solutions would be appropriate.

 

 

Timeouts when flooded

Even the most carefully planned conversations don’t always go well. The above steps will certainly increase your likelihood of having a productive conversation, but there’s no way to guarantee success. And, in those occasions where the conversation falls apart, it’s important to have an appropriate tool: timeouts.

 

Difficult conversations are often challenging because they involve emotions and emotions can sometimes get out of control. In those instances when we lose control of our emotions – a situation that I refer to as being “flooded” – the best solution is to borrow from the sports world and call a timeout. When one is flooded, one does not think clearly. As a matter of fact, research in the field of neuroscience shows that one’s IQ typically drops when flooded and a flooded individual also loses access to the area of the brain where logical thinking resides. If one of our goals for having a difficult conversation is to ensure that the performance shortfall is addressed, then both parties need to be at their best when engaging in this conversation. And, if just one participant becomes flooded, then both parties are clearly not at their best.

 

The most effective solution in this situation is to call a timeout and take a break from the conversation. Once both parties have had a chance to clear their heads – a process that usually involves something as simple as each participant taking a brief walk alone – they can resume the conversation. If the situation becomes flooded again, simply call another timeout! It may take some time to make progress via small periods of productive conversation, but trying to press on while even one participant is flooded will lead to no progress at all (and, potentially even a setback)!

 

 

Catch them doing right

Speaking of neuroscience research, there’s significant evidence that positive feedback is more effective than negative feedback. While it’s true that sharing your perspective on what the recipient is doing wrong can help them to avoid derailing, shifting the focus to dreams and possibilities will allow the recipient to flourish. As leading researcher Richard Boyatzis says, “You need the negative focus to survive, but a positive one to thrive.”1

 

So, as you and the recipient work together on their performance improvement, don’t just let them know when they make mistakes (which they undoubtedly will as they first attempt to change their behavior) – also be sure to point out to them when they are behaving in the right way. An example in our case: "I've noticed that you've been putting in more hours at work recently and, as a result, that your productivity has increased." If you can catch them doing right, you will increase their likelihood of behaving correctly more often.

 

 

In closing

For anyone involved with a family business, delivering a difficult message is challenging but necessary. While there is no process that can guarantee success in these precarious situations, the steps laid out above can significantly increase your likelihood of achieving the ultimate goal: improved performance that leads to sustained success for the family and their business.

1 "When You Criticize Someone, You Make It Harder for that Person to Change" Havard Business Review, 2013.

 

 

 

 

 

Source: https://www.thefbcg.com/delivering-a-difficult-message-performance-feedback-in-a-family-business/

 
5 warning signs of a governance problem
Monday, 14 August 2017 00:00
 

If you have been experiencing any of the following in your boardroom, you are already late in acting to improve the quality of your board. Either you have a governance problem now, or one is coming.

 

• Absence of a rigorous process in defining a long-term, forward-looking business strategy.

 

• Poor communication between the company’s owners and its professional managers.

 

• Significant turnover among the second layer of the company’s senior executives combined with very long tenure by the top layer of senior executives -- conditions that have not been accompanied by strong business performance over the past three to five years.

 

• Board meetings that are too comfortable and always follow a familiar pattern: Nobody challenges anyone in the board meeting on any topic that is material.

 

• Everyone sitting at the board table is a family member, longtime family accountant, family estate lawyer or close friend.

 

We can offer you the guidance that you need. Contact us now.

 

Source:https://www.familybusinessmagazine.com/5-warning-signs-governance-problem

 
Sunday Times Article - The "sticky baton" of family business succession
Friday, 11 August 2017 00:00

We trust that you will discover is a highly valuable read below from the Sunday Times.

Succession is the key subject as it is keyin reality when running a family business . The importance or succession is discussed well and the why it is so important to encorporate it into your Family business as soon as possible.

 

 

When Ted Dwyer became temporarily deaf in one ear a decade ago, he sent his first text message, asking his son Eamon to come home from Australia. Though Dwyer did not know it, this was the start of the process of handing over the reins of City Life Wealth Advisors, a life and pensions brokerage he set up 46 years ago.

 

“For a while Eamon worked for me, then we worked together, and now I work for him,” says Dwyer, 70, who has opted to leave the business to his son rather than give shareholdings to all four of his children.

 

“Other parts of the estate can go to other people, but Eamon will get the business. It’s a big risk because if the business was to fail, he would get nothing.”

This is the conundrum Dwyer now helps other families address, through his consultancy Ted Dwyer Family Business. He went back to college to study succession planning and has since helped clients manage the transition of their businesses to the next generation.

 

“One problem facing many family businesses in Ireland is that there is really only enough revenue in them to support one family, not two or more,” says Dwyer.

 

Emotional issues are tied up in handing over the reins, too. “Eamon and I have been working on this process for 10 years, and, even though it turns out he’s much better at the business than me, letting go is difficult. I’m still not used to it.”

 

For the Dwyers, it helped to have an outside chairman on the board to act as a mentor to Eamon and ensure the interests of the business, rather than the family, were to the fore.

Once you have made the changeover, it is important to accept it, says Dwyer. “Things happen in the business that I don’t necessarily agree with. If I’m asked, I’ll give my opinion, but I let Eamon make the decisions.”

 

The handover of many businesses was complicated by the recession, but they are getting back on track in the improved economic environment, says JJ O’Connell, of Family Business Ireland, a consultancy. He points to a recent report by the Economic and Social Research Institute, which estimated that the 55-64 age group in Ireland has wealth — including houses, pensions, investments and small businesses — worth nearly €350bn.

 

“A huge transference of wealth to the next generation is expected in the coming years,” says O’Connell. “It’s a real economic issue for Ireland as a whole to make sure this is managed efficiently.”

 

Whether family or not, the next generation of management must be educated and trained to take on a business. Companies should start succession planning as early as possible, says O’Connell, with simple business continuity plans outlining who will step into a particular role during a crisis.

 

“You don’t want to leave these matters until circumstances take over, be it a car accident, stroke or any of the things that can affect a family. You may not realise at the time that it is in fact the start of an intergenerational changeover,” he says.

 

An upshot of the recession is that it has put off many next-generation members from taking over the family business, particularly where people saw how hard their parents worked for little return.

 

“We’re helping a lot of businesses with managing changed expectations for the next generation,” says O’Connell. “In other cases we’re seeing sons and daughters stepping in and taking over their parents’ business debts. The scars of the recession are there, but family businesses typically don’t talk about them.”

 

Stewart Dunne, a partner in the audit department at accountants BDO, says there has been a post-recession increase in business handovers, driven by the fact there is more value in businesses, greater economic certainty and larger amounts of money around than in recent years. Causes for concern remain, however.

 

“First, it’s a question of whether there is enough money in a business not just to fund the retirement of the parents, but also whether there will be enough left in the business to ensure it’s viable and has enough working capital,” says Dunne.

 

Second, if parents are looking to take a step back, do the children have the skills required to take over, or will the business need outside professional help? If the latter is required, parents must be “really hard-nosed and commercial” in putting the business first, adds Dunne. If the plan is for children to eventually take over the business, it is important they get experience elsewhere first.

 

“The problem for any family business is that it’s very easy to operate in a cocoon. They might know a lot about their own business, but not about how businesses in other sectors operate, nor even what their competitors are doing,” says Dunne.

 

Bringing in managers from outside may help, but it can be hard to achieve. Owners of family businesses often find it difficult to attract ambitious people because those they seek might fear playing second fiddle to a lesser-qualified boss whose name is over the door.

 

“To attract top talent to a family business you need to incentivise, and you have to realise that a shareholding will more than likely be a part of that,” says Dunne. “Family businesses are often too reluctant to consider giving away a stake to outsiders, even though it can be the best way of attracting the high-performing management required.”

 

Ironically, one of the biggest threats to a business can be the entrepreneurial spirit that established it. Not knowing when to go, or refusing to relinquish decision-making, is the hallmark of what has been termed the “sticky baton” of intergenerational handovers.

 

This was not an issue, however, for Rachel and Frank Doyle, the founders of Arboretum, a Co Carlow garden and retail centre. Their sons, Fergal and Barry, approached the couple with a proposal about taking over the business.

 

The transition was helped by the brothers’ complementary skills, says Fergal. Barry is a horticulturalist who looks after the retail side, while Fergal is in charge of administration and marketing.

 

“We both know what is required of us. Our parents let us make our own successes and mistakes,” says Fergal.

The original business has grown as a result, and the brothers have opened a second outlet in Kilquade, Co Wicklow.

“At some point the older generation has to give that level of trust when it comes to the decision-making, and let us get on with it,” says Fergal.

 

 

 

 

 

 

Source: Sandra O' Connell, The SUnday Times Newspaper.

 

 

 
The Hofstede Centre
Wednesday, 24 May 2017 00:00

Thinking of going Global with your business?

Are you looking to move your business into a country that may have  completely different cultures and views?

Under National Culture, Professor Geert Hofstede states that values in countries can be distinguished into categories. The original categories are:

  1. Power Distance (PDI),
  2. Individualism versus Collectivism (IDV)
  3. Masculinity versus Femininity (MAS)
  4. Uncertainty Avoidance (UAI).

Long-Term Orientation (LTO)  was added in 1991 and there are others not fully distinguished but the website gives great insight to what categories are more dominant in each country. This is important aspect to have knowledge on if you are thinking of going global.

Click here to read more:

http://geert-hofstede.com/national-culture.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Why You Need Emotional Intelligence to Run Your Family Business
Wednesday, 24 May 2017 00:00

Leaders who are emotionally aware have a knack for reducing conflict and building lasting relationships, two qualities that are beneficial to businesses of all kinds, but particularly family businesses, where the line between personal and professional matters is easily blurred.

 

Click here to read the full article:

http://www.entrepreneur.com/article/244127

 

 
Six simple steps for succession in family businesses
Monday, 24 April 2017 00:00

If you work in the family business sector, chances are you run into the same statistics over and over again:

 

The data is not pretty — although, as some critical thinkers have pointed out, survival statistics like these have to be put into context from time to time.

 

What is important to know is that the data does not imply that there is a 90% chance your business will fail before your grandchildren come of age. It is up to you whether you create a successful multigenerational family business. In other words, this is not a numbers game; it is a planning game.

 

The reason so few family businesses survive to the third generation is they lack planning and communication. Companies fail when they let family conflict and emotion drive change, rather than relying on proven strategies. Your business does not have to be like that. It can, and should, survive a long, long time.

 

Every family business is different, but the characteristics of good succession planning are universal. Here are six simple steps that your business should incorporate.

 

 

 

Step 1: Treat succession planning like it is urgent

A family business ignoring its succession plan is akin to a 30-year-old worker ignoring his retirement plan. Both events (succession and retirement) seem like they are a long way off, but the reality is that ignoring the early years can lead to major problems down the road.

 

Why do so many family businesses ignore or put off succession planning? I have noticed several reasons.

 

First, many people underestimate how extensive succession planning is. A proactive succession planning process allows organisations to reduce the impact of an owner or major team member, help buffer the company from dramatic changes in business circumstances, as well as prepare targeted individuals for future advancement.

 

One reason so many enterprises ignore succession planning is that it can be uncomfortable. Family conflicts occur even in the healthiest businesses, and the succession process is full of potential pitfalls and mental roadblocks unless you know what you are doing. As such, you will likely need someone to guide you through the complexities. Someone whose expertise and impartiality help build trust and smooth conflict between members.

 

 

 

Step 2: Plan for a process, not an event

Too many families treat succession like it is a long-off, lofty goal. They think “someday, the children will have to take over,” or “ideally, the business will operate smoothly enough for my son/daughter to grab the wheel”.

 

Such a mindset is unfortunate because it treats succession as an event, not a process. However, as Family Business Australia points out, the major influences on succession all require a lot of planning and preparation. Specifically, FBA shows that transitioning business owners are concerned about:

 

  • Generating adequate financial returns;
  • Having sufficient trust in potential successors; and
  • Receiving enough interest from potential successors to take over the business.
  •  

You also need time to figure out the legal and tax issues associated with succession and, if it is the right time for the founder, retirement. This means estate planning and equity transfers.

 

 

 

 

Step 3: Rally around your family values

Strong family businesses create a sense of shared values — the kinds of values that survive beyond one owner. As you sit down to prepare a succession plan, take note of the moral and governing philosophies that guide your enterprise.

 

Your family values are more than a slogan. During times of conflict or struggle, your leadership and family employees will rally around your family values, using them as a guidepost for making tough decisions. Do family unity and collective agreement matter more than generating extra revenue? Should younger family members be forced to work outside the business before they can assume control?

 

Think about your succession plan as an opportunity to create a compass that your family gets to carry from generation to generation.

 

 

 

Step 4: Hold meetings and discuss succession

A really good succession planning process boils down to involving and communicating with your family members no matter which generation they belong to or their immediate contributions to the firm.

 

Keep in mind — and this is very important — that it is not the role of the present leadership to micromanage the meeting process. You want every influential member of the firm and family to be able to speak openly and offer their opinion.

 

It is uncomfortable and unproductive whenever the current patriarch or matriarch runs an entire meeting only to find out later that many people wanted to offer constructive thoughts, except they did not feel comfortable doing so.

 

If you have an expert trusted adviser (or better still, a family business adviser) I strongly suggest you ask them to facilitate these meetings. Remember, for most members of the business, this will be the first time going through a succession. It is valuable to have an expert guide you and help build trust / settle conflict between members.

 

 

 

 

Step 5: Educate your family

I believe education is the foundation of a successful transition. Without training and learning, people struggle to contextualise what they need to do in the succession process.

 

Your family must be educated enough to perform the following tasks:

 

  • Handle conflict, whether for family or business reasons;
  • Accept positions of responsibility in the company;
  • Act as advocates for the business no matter their present responsibilities; and
  • See the family business as a living legacy, with an interconnected past and future.

 

 

 

 

Step 6: Develop a written family constitution

The best way to cement your succession plan is to construct it in conjunction with a written family constitution.

The constitution serves two functions:

 

  1. It acts as a governing document that promotes ongoing family business continuity. This means establishing an initial plan as well as identifying fall-back plans and means of settling conflicts or making difficult decisions; and
  2. It defines and emphasises family values. You must make clear your family values in concrete terms so that everyone — family, non-family employees and directors, and customers — knows what you believe and how you conduct your business.

 

 

 

David Harland is the managing director of FINH and works exclusively with multigenerational family businesses. He holds both national and international accreditation in the field of family advising and family wealth.

 

 

 

 

Source: http://www.smartcompany.com.au/business-advice/strategy/76476-six-simple-steps-succession-family-businesses/

 

 
A Family Business conversation
Wednesday, 01 March 2017 21:52

A Family Business conversation - Friday 10th March 2- 4pm at the Northside for Business Campus, North Ring Road, Cork. David Donegan Managing Partner Donegan Solicitors and JJ O'Connell (myself) are hosting a two hour briefing as part of Enterprise Week with Cork City LEO. Places are limited - just 20. This is a free event.

 

Recent high profile family disputes have once again raised awareness and interest in succession planning. It is regrettable that it takes the circumstances of a court dispute to focus the mind of others to look at the issue. However family business succession is a complex and sometimes emotive issue. Each family is unique and solutions differ. David is one of Ireland's most expert and experienced advisers and we have worked together for over twenty years.

 

If you are a parent, son, daughter, sibling, in-law, or adviser we invite you to join us for a confidential chat that we hope you will find of value.

 

 

For more information please contact us on the following:

 

  • Tel: 021- 4211433
  • Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
The Enduring Family Business
Wednesday, 22 February 2017 23:00

The Cork Family Business Breakfast meeting hosted by Cork Chamber of Commerce and Chartered Accountants Ireland, Cork Society was a great success last Friday the 17th.

 

The four speakers covered all areas necessary and were very encouraging of being proactive in an enduring family Business:

Brian O’Brien of PWC presented the findings of the 2016 PWC Family Business Survey and shared his views.

 

Brendan Twohig of MK Brazil who spoke about the Tax Implications in Family Business and it was the funniest tax talk I have ever heard.

 

JJ O’Connell of Family Business Ireland & Plato Cork and Jan Harte owner of Jan Harte & Associates co-presented. JJ focused on the Opportunities and Pitfalls working in a Family Business and the Importance of Planning & Processing and Jan Harte spoke about the Importance of Culture in Family Business and How to Create the Culture you want.

 

 

 

 

 

To read more or receive more information, please click on the link below:

 

https://www.linkedin.com/pulse/enduring-family-business-jan-harte

 
<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >>

Page 1 of 24