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It’s not often that I go out on a limb right off the top of these posts, but I suppose coming out against the importance of efficiency could certainly qualify as going against the tide when talking about business.
Of course I don’t typically deal in true business subjects, since my preferred domain is that of family business, where my emphasis is on the family aspects.
Getting things done quickly and efficiently seems like a laudable goal of course, with some notable exceptions.
The main exceptions I’d like to note here are those where you need to bring in the entire wisdom of a group of people, and where it’s important for everyone to feel heard.
Such situations abound in the family circle part of family enterprises, or, said better, enterprising families.
When Finishing Faster Isn’t the Key
I’ve dealt with certain examples of this before, notably in Going FAR? Go TOGETHER, which deals with a scenario involving a group of siblings in the rising generation of their family, preparing to eventually take on leadership roles, both in the business and in the family.
In recent months I’ve been involved in two group processes where I’ve truly embraced the idea of throwing efficiency and speed out the window, with positive results (so far).
The first example took place in a professional organisation I’ve been involved with as a volunteer for the past few years, as part of a committee charged with an important role in putting on our annual conference event.
The second example is ongoing, and has me playing a facilitation and mediation role with a sibling group who share ownership of some legacy assets together.
Professional Development “Live Case” Opportunity
In the first case, my role had recently changed from simply being a member of the committee to now leading it. I had the benefit of following in the footsteps of someone who had done a great job before me, but that also gave me big shoes to fill.
There are always challenges in putting on an annual event in the summer but having to make most of the planning decisions months ahead of time, and these are only magnified by the pandemic’s uncertainty as to what will even be possible regarding large groups six months out.
So we definitely had a number of considerations, lots of moving parts, and a general lack of clarity around much of the information we needed to base our decisions upon.
We also on-boarded three new volunteers to the committee, and the admin person from the organisation was also new, and had never been part of our annual event.
Learning About How to Be with the Group
There was plenty of pressure on us to come to some final decisions but I resisted the temptation to push for some closure on some items that I knew could and should wait.
It was way more important to make sure we took the time to consider all our options, evaluate a number of ideas, and take advantage of the wisdom of all the members of the committee.
As the head of the group, an important part of my role was to set the right tone and pace for our deliberations.
Weighing many interdependent considerations and allowing everyone to share their inputs was more important than the somewhat arbitrary deadlines that could have distracted us.
Getting a Family to Take Their Time
The practice I got from working with that group set me up nicely for a new client situation where I’ve used some of those lessons to good effect.
This sibling group is getting used to some new realities and are learning to work under a more democratic decision-making framework than they were used to.
That kind of adjustment takes time, not only in terms of minutes and hours spent together, but in the days and weeks that are needed for new realities and understandings to sink in to each person’s thinking.
When you combine that with a severe “information asymmetry” between insiders who’ve always played key roles, and those who have spent their lives on the outside looking in, it’s key to set a pace that allows everyone not only to be a part of the process, but to feel like they’re part of the process, on relatively equal footing.
That methodology isn’t the most efficient, but wasn’t it the tortoise who won the race?
This week’s blog is one of the occasional instances where I leave an open spot on my blog calendar because of an event that I’m attending, and I allow something from my participation to inspire me in real-time.
The event in question this time is the Global Family Enterprise Case Competition at the University of Vermont (UVM). I just returned from my trip there, where I was pleased and proud to serve as the lead judge on one of the four judging panels on day 1 of the competition.
This was my fifth time as a judge, and every year I come away impressed with the caliber of the students; not only the competitors, but also the dozens of UVM volunteers who run the event, under the watchful eye of Pramodita (Dita) Sharma, who remains the heart and soul of the event, as she has since she created it.
Friendly Competition, Global Participants
If there was an “A-Ha Moment” that arose for me this time, it certainly was not the global nature of the competition, and, by extension, the family business world. I’ve commented before in some of my posts relating to my membership in the Family Firm Institute (FFI) that the FamBiz community is truly global in nature.
What really struck me on this visit was the friendly nature of the competition between teams.
The dinner after day 1 of the competition involves each team (3 student participants plus 1 coach) going to the front of the room and taking the microphone and introducing themselves in a fun and creative way. Think of it as a gigantic icebreaker exercise.
It is very friendly in nature, and it is also competitive.
In fact, the entire event truly brings together both friendliness AND competition.
Neither One Alone Would Suffice
What I realized was that neither one of these traits (competitiveness and friendliness) would be enough in and of themselves. Imagine if it was all friendliness and nobody really cared who won. Or, the reverse, if it turned into a dog-eat-dog fight to the finish.
But then I also started to think about the parallels this competition has with a real family business. Bear with me here for a minute.
If you’re part of a family business and it’s all friendliness, all the time, that might be nice, but how long will it last, if you aren’t competitive enough? And I mean competitive as a business, but also internally with colleagues.
Likewise, if it’s all about competition and people aren’t even friendly with each other, what’s the point? Isn’t life too short for that?
The Pentland Case
The case that was used on day 1 was centered on Pentland, a UK business that was preparing the transition from the second generation of the Rubin family to the third.
It was written after Pentland had received an award for the being the best family business in Europe a few years ago, so it clearly wasn’t one of those typical business school cases where there are all kinds of obvious problems.
The setting for the case was a Friday evening family dinner where various family members had recently returned from visiting different branches of the family company, and they were about to embark on some key discussions about where the family was going to go from here.
Finding the Right Friendly / Competitive Balance
The key to this and many family business situations is finding the right balance between the friendly family dinner and the business meeting aspects of the important discussions that also need to happen.
Some families have difficulty with this balance, where every family dinner becomes a business meeting, much to the dismay of those around the table who aren’t involved and don’t wish to be part of any such meetings.
Coaches and Judges Mingle…. After Work
Personally, I also needed to work on balancing my serious role as a judge with some friendly after dinner discussions with some of the dedicated coaches.
I’m pleased to say that everyone got along very well and professionally, and my own network of family business contacts continues to expand..
I hope to return again as a judge next year.
And the Winners Are:
The winning schools at FECC 2020 were:
Undergraduate Division: Wilfrid Laurier University – Canada
Graduate Division: Universidad Francisco Marroquin – Panama
Congratulations to all those involved, participants and organizers.
5 Things you Need to Know: Family Alignment
This week it’s time for another installment of the “5 Things you need to know”, and the subject is one that I consider to be tremendously important: Family Alignment.
I’ve written about Family Alignment a number of times in the past, but I decided to attack it again just because it needs to be better understood.
Much of the content of this post comes from a “Quick Start Guide” (“white paper”) I wrote on the subject in 2016. If you want a broader and deeper look at Family Alignment, please feel free to read and share it.
Without further ado, here are:
5 Things you Need to Know: Family Alignment
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There are 2 Parts: “Intra” and “Inter”
The first thing to look at is making sure that the family members are aligned amongst themselves. I call that the “Intra” part.
I’m talking about general agreement on the family’s values and goals, along with the important questions regarding whether or not they really want to continue to work together.
Once you’ve answered that one, then there’s the all-important element of aligning the family with its external partners.
Here is where we want to make sure that the family is working with and investing in businesses that are aligned with the values and goals that everyone agreed on in the first part.
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Do the “Intra” BEFORE the “Inter”
It’s important to work on the “intra” part and make sure the key family members are all on board with each other first.
If you haven’t worked out what you all agree on, there will be issues that could derail things going forward.
The term “collective responsibility” is one I heard recently that conveys this well.
The family members need to develop a consensus that they are responsible to each other, and only then decide on what outside businesses, causes, investments and partnerships they’ll work on.
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Starting Down the Road to Governance
Governance is kind of a loaded word that I’ve written a lot about, and it still has some negative connotations when people hear it.
To me, family alignment and family governance go hand in hand. Working on getting a family aligned necessitates getting into the questions around family governance.
Working on family governance is a good thing, and it’s actually THE key to any family being able to successfully transition its wealth to the next generation.
It’s impossible to have an aligned family without some governance, and, by the same token, it’s impossible to institute governance in a family if there’s no alignment.
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It Takes a Lot of Time and Effort
Nobody ever said this stuff was going to be easy. It isn’t, and it takes lots of time and lots of effort.
You know those stats you always see about the high failure rates around intergenerational wealth transfer? This is why.
Most families aren’t willing to do the work required to make sure that family members figure out how they’re going to make decisions together, how they’re going to communicate clearly and regularly, and how they’re going to solve problems together.
I’m actually talking about a considerable amount of time, not just in terms of hours, but in terms of months and years too.
For a family to figure out all this stuff is actually a pretty big project. Those who undertake it seriously soon learn that it really is hard work, BUT, they usually see great progress quickly once they begin.
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Process is Much More Important than Content
Unfortunately family alignment isn’t something you can just buy off the shelf. It isn’t some piece of “content” that you can pay your lawyer and accountant for.
The process of figuring out the answers to all of the important questions, together, as a group of relatively equal family members, is the most important thing.
If the Smith family has a beautiful family mission statement and a 50-page family constitution, but they haven’t had a meeting in years because one half of the family isn’t speaking to other half, that’s nice content with zero process, and a disaster waiting to happen.
If the Jones family meets regularly, has great exchanges during which they work together to define and achieve goals as a group, even if they don’t have anything in writing, then they’ve got the process down nicely.
Which family will succeed in passing the wealth down?
The family that is aligned and has taken the steps to determine its governance will have better odds.
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