“Nose In, Fingers Out” for Family Business
Today’s topic is one that I’ve been thinking about for a while, ever since I first saw it mentioned back in 2017.
If you Google “nose in, fingers out”, you’ll see that it has been used by a number of people, attesting to its usefulness in creating a mental image that most people can quickly grasp.
I need to give a hat tip to Larry Putterman for putting it on my radar screen first.
It’s All About Boundaries
A topic that arises often in business families is that of “boundaries”, and there are many reasons for that, and anyone who has ever worked with, or in, a family business knows what I’m talking about.
But while the “nose in, fingers out” idea is about boundaries, it is also a subtle way to discuss how boundary lines are not all necessarily a solid concrete wall, but perhaps just some steel slats.
Boundaries are important, but we need to think about, and talk about, what the boundaries are supposed to accomplish, if we are going to establish the optimal boundaries for our situation.
From CEO to Chairman
The area that Putterman specializes in is Boards of Directors, and in the family business context what he is most often referring to relates to a person who has decided to scale back their involvement as part of a transition.
The former leader of the operations of the business, likely the CEO, has decided to pass on the reins of the operations, but to stay involved in a lesser capacity, and not disappear altogether, at least not yet.
There are different ways to take these kinds of steps gradually, of course. My father brought in a non-family President and stepped into the Chairman role, but kept the CEO title for himself for a while.
Quite often the biggest step is the one where the CEO mantle is relinquished, and only the Chairmanship is retained.
How Much Is Out, How Much Is In?
In a family business, an outgoing leader will (hopefully) get to the point where, for many reasons, it makes more sense to scale back their involvement, moving from day-to-day operations to more of an oversight role.
These kinds of transitions happen all the time.
But sometimes they work out well, and other times, well, they just create problems.
This is where the “nose in, fingers out” idea comes in.
What Is Permissable?
The devil, as they say, is always in the details.
The nose and the eyes go together, so you are allowed to look around and sniff around as much as you like.
As you would expect in an oversight role, continuing to observe whatever is going on in the company is allowed and even required.
Below the nose is the mouth, of course, and this is usually the first place that problems begin to arise.
The Mouth Can Be a Finger (?)
If the nose and eyes go together, does that mean the mouth does too?
Probably not.
Once you step back from the day-to-day to oversight, what you say to people, at least those who are involved in the daily operations, needs to be weighed very carefully.
Problems and confusion arise quite quickly when the old boss walks around and tells “his people” what to do.
In fact, it is at this point where the mouth has become tantamount to a finger.
Encouragement Yes, Direction No
When the ex-leader talks to the employees, care must be taken to limit their words to encouragement and not direction.
When they are in a board setting or discussing things with others involved in oversight only, then the mouth is once again an agent of the eyes.
What About Other Family Members?
There is another area where the nose in, fingers out situation comes up in family business that I’d also like to touch on here.
It’s the one where family members who do not work in the business interact with others, often siblings, who do.
There are boundary issues here as well, as those who don’t work there have an information disadvantage that they usually need to overcome.
Sometimes their questions seem a little too much like fingers in, rather than just noses.
For those being questioned, the best defence for this is to try to be as transparent as possible, and to get out in front of any questions.
If you satisfy their noses, they will be less tempted to poke their fingers in.
