Which Came First?
This week we’re looking at one of those “which came first?” situations, so as you’ve probably guessed, it’s kind of a trick question.
The good news is there’s no wrong answer!
I’ve written quite a bit about family alignment in this space, most recently in On Family Alignment and Family Alliances last fall.
But this’ll be the first time I’m dealing with family engagement, and in some ways it’s long overdue.
Coming Up Again and Again
Maybe it just feels overdue because the idea of alignment and engagement being two sides of the same coin came to me a couple of months ago, and ever since, it keeps on jumping up and hitting me in the face, seemingly at every turn.
I’m working with one client who’s drafting her family’s first ever “family charter”, which will essentially be the first written version of the guidelines for their “family council”, which doesn’t really exist yet.
The “writing it down” part is all about the alignment, but the work my client has been struggling with is in getting input from other family members, because she wants to make sure she’s capturing things correctly, and that’s all about engagement.
Getting the Rising Generation Interested and Involved
Another client with whom I’m working has taken a family business he bought from his father and grown it significantly, and he’s now working out the details of how to get his children and nieces and nephews interested and involved.
This is the type of engagement issue that lots of family businesses face at various stages in their evolution.
But they can quickly go from low engagement to high, and then suffer from issues around their alignment, because the people who just got interested all see things in a different way.
All of this is quite normal, and possibly a good problem to have.
A Regular Governance Problem: Balance
You may have encountered the same issue in other, non-family governance situations, whether it’s the board of a non-profit or even a committee that you’re a part of.
I’ve seen it up close in each of those situations, although I really noticed it more recently, since this idea began to crystalize in my head.
But like I said, it’s a good problem to have, and there’s no wrong answer.
You can start working on one, and it’ll help you with the other, and it works both ways.
Leadership and Collaboration
Before I get to a couple of examples, I want to highlight that a similar idea hit me a few years ago and has stuck with me.
I’d read a book about collaborative leadership, where the point was made that people who are collaborative are exhibiting leadership, and the people who are leaders are collaborating with their followers almost by definition.
It’s almost circular.
It was one of those things that took a bit of time to sink it, but now that I’ve internalized it, it seems to be there for good.
And so it is now, with alignment and engagement, especially in the family business context.
Start Where You Are
Wherever your family is, start there. Sounds obvious, but, like common sense that isn’t really common, it isn’t.
If a family is engaged, work on continuing to develop that, and you’ll quickly get to a point where some possible “mis-alignments” pop up.
Great, now you have something to work on that’s a bit different, solving that alignment issue.
If, however, the family seems nicely aligned, start there and “push” that further. You’ll likely hit a point where some might disengage, and then you can work on engaging them again.
In so doing, you’ll almost naturally find yourself tweaking the alignment again.
Incremental, Iterative Progress
The good news, again, is that this is all part of progress.
Families who hope to transition their business or wealth to the rising generation need to have engagement, and they need to be aligned, if they want things to work out right and to have the results be durable.
As you work on developing one, alignment or engagement, you’re also making progress on the other.
It may not feel like progress because it doesn’t move quickly. It’s incremental, one tiny step at a time.
And, as I hope I’ve shown here, it is also iterative, as the family keeps rolling along forward.
One hand washes the other, and two hands are better than one.
Goldilocks Advises a Family Business (Part II)
Last week we looked at advisers who work with business families, bringing the perspective of an outsider to a family system.
That perspective allows them to see things that the family members themselves have difficulty noticing.
With time, such advisors can learn enough about the family’s workings to also begin to benefit from the knowledge of the family insiders.
Of course, there’s a fine line to be struck here, and it’s one that experienced family business practitioners clearly recognize and constantly try to manage.
Getting Too Close
Much like when Goldilocks tries one of the bowls of porridge and finds it too hot, she gets burned, consultants can also be too quick to act and get too close to the situation to properly maintain their objectivity.
This can happen very early on in situations, especially where there’s some conflict between family members.
Any outsider needs to be extra mindful of how they enter the family system, in order to maintain an objective stance towards everyone.
If one sister “brings me in” to a situation with her family, and there’s an issue with her sibling, it won’t take very long for me to be branded as “her guy”, and then my chances of being seen as neutral will be lost.
Who Hires FamBiz Consultants, Anyway?
A few years ago, in Notes from a Great Keynote, I related some statistics from Craig Aronoff, one of the founders of FBCG, about the percentage of families that actually hire an outside consultant at some point.
He stated that somewhere between 2% and 4% of family businesses actually avail themselves to what he called “private lessons” from an outside party.
That means that 96% to 98% of families never hire an outside consultant to work with them, which seems high to me.
Not as Easy as It Looks
Part of the reason the numbers are so low comes from the fact that this work is not easy to do.
Family businesses are very common, all over the world, but that doesn’t mean that they’re simple, or that there’s some magic formula to the business model.
When I’m invited into a family’s inner circle, it’s always a privilege and an honour to be there, in a place they do not typically allow just anyone to enter.
And when you’re there as a “process person”, there are plenty of things that you need to be on the lookout for.
Watch Out for the Hornet’s Nest
There are potential hornet’s nests around every corner, and if you aren’t careful, you might accidentally kick one and cause more of a stir than you had planned for. So it’s best to tread slowly and carefully.
In addition to being mindful of not being seen as one person’s “guy”, it’s also important to develop and maintain individual relationships with each of the key family members, even those who might appear to be “less important” at the outset.
In a family, every person is important, even though they may not all appear outwardly to be, and even if some members act as if they are more important.
In fact, outsiders who work at these relationships on the “lower rungs of the ladder” will eventually be rewarded.
Another Way to Go: Just Coach One of Them
Being on good terms with all family members can be a balancing act, and some consultants master it better than others.
There is another way to go that I’ve been discovering and liking more and more lately, and that’s to just work with one person from the family, as a coach.
Last week I mentioned that a family is a system, of interdependent people.
A system typically finds an equilibrium, but if one person changes, the system will necessarily change too, eventually, assuming the one person has the strength to maintain the change themselves.
One Family Leader Can Make a Huge Difference
In many ways it’s a much easier starting point, because getting the agreement to work with a single person is typically quicker and the learning curve is shorter when you’re only dealing with one person.
Naturally when I coach a member of a business family, I learn about all the other members too, but I’m not the one who interacts with them.
It’s still all about process, only I’m working with the “family leader” on the best way for them to interact with the rest of their family.
And in the end, sometimes that’s “just right”.
What Could Go Wrong?
Metaphors have always been one of my favourite ways to explain things, but sometimes, admittedly, I can twist things a bit too far.
I hope this won’t be one of those occasions; apologies in advance if it is.
So be forewarned that this is not actually a story about a young blonde girl who advises a family business (or a family of bears).
Insiders, Outsiders, Goldilocks?
The genesis of this post is actually an introduction I heard on TV about an upcoming guest on a show I happened to be watching.
It was an American show, and the guest was an Irishman who spends half his time in the USA, and half his time in Ireland.
The host proclaimed that this gives the man,
“The knowledge of an insider, and the perspective of an outsider”
Bang, there it was. I actually paused the TV, rewound, and made sure I had the quote right.
Finding the Right Balance
I instantly thought about situations where a family business, or more specifically, a business family, calls in someone from outside the family to work with them.
Of course that’s because this is exactly the kind of work I love to do, when I’m not writing about fairy tales.
Many families are loath to bring in anyone from the outside, preferring to keep everything in-house, within the family, for fear that outsiders cannot be trusted, or believing that nobody else could ever understand “our family”.
They’re wrong on both counts, and we’ll get to the reasons why, but for now, let’s look at this “insider / outsider” dynamic.
Perspective of an Outsider
We’ll start with the perspective piece, because this is truly the biggest reason to enlist the services of an outside family business consultant.
Any person who is not a part of the family is also not part of the “family system” as those who use a systems theory lens would say.
The family system is called that because of the interdependent nature of the relationships that the different members have on one another, thanks their many common goals, and to the way that they interact on a long-term, repetitive basis.
An outsider, especially one trained in this kind of work, can instantly offer that family system the benefit of their outsider’s perspective, precisely because of what they are able to see, thanks to the fact that they are not part of the system.
When I peer into my aquarium, I see that the fish are all swimming in the tank. I’m pretty sure that the fish don’t see things the same way.
Knowledge of an Insider
Naturally the person who isn’t a part of the family won’t have the knowledge of an insider who’s been a part of the family their whole life.
But that doesn’t mean that, with time, they can’t come to know the individual members of the family, and how they work together, pretty well, all the while maintaining their outsider’s perspective, which is so valuable.
In fact, a good outsider knows the limits of how far inside they want to go, knowing that if they ever lose their outsider’s perspective, they suddenly become a less valuable resource to the family.
Special Case: In-Laws!
We’ll get back to this Insider / Outsider stuff next week in Part II, but we need to acknowledge a special category of people who happen to exist somewhere in most business families, and who somehow live long periods of their lives in this “twilight zone”, in between insiders and outsiders.
Often the in-laws try desperately to be included among the insiders of the family, with varying degrees of success. Somehow many of them are never truly accepted as insiders, and sometimes for good reason.
It also occurs that the efforts made to become insiders can negate any outsider advantages they might have had to begin with!
In-laws each have their own reality to face, and some learn to live with the cards they’ve been dealt better than others.
Looking Ahead
Next week, in Part II, we’ll look at what percentage of business families actually hire outside consultants, as well as things that outside advisors need to be aware of, as they are welcomed into the sacred world of a business family’s inside workings.
As Goldilocks taught us, not all situations are “just right”.
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