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Spring 2013

August Current Thinking Column

Thursday, August 31, 2017

Reflections on a Life
Well-Spent

by Leslie Dashew
Partner, Aspen Family Business Group

A good friend died last week and we went to the memorial yesterday. The service included two passages that particularly touched me.

The first was a story from the Torah:

A man was traveling through the desert, hungry, thirsty and tired, when he came upon a tree bearing luscious fruit and affording plenty of shade, underneath which ran a spring of water. He ate of the fruit, drank of the water and rested beneath the shade.

When he was about to leave, he turned to the tree and said: “Tree, O tree, with what should I bless you?

“Should I bless you that your fruit be sweet? Your fruit is already sweet.

“Should I bless you that your shade be plentiful? Your shade is plentiful. That a spring of water should run beneath you? A spring of water runs beneath you.

“There is one thing with which I can bless you: May it be God’s will that all the trees planted from your seeds should be like you . . .”


So what is the mark we want to have on those who follow?  What is the legacy we want to leave?

Is it the fruit of our labors that we want our children and grandchildren to have?  Or the ability to be fruitful and to feel good about that ability.

I believe that most of us would like our offspring to be productive and to share our values, as in this case, to produce sweet fruit, offer help to others and be nourished.

And if we are very fortunate and truly live our lives with integrity (i.e. living our own values) then we might see our offspring manifest the same values. But even more important is that our children differentiate and become their own “selves” and follow the path toward their own dreams. When we are in a family business, often we hope that our kids’ dreams will coincide with ours and that they will succeed us in the business. Yet often the “trees planted from (our) seeds…may share some of our values, but not necessarily our dreams.

The second prayer tells us how to live our lives such that we are remembered by those who follow.

Let us treasure the time we have,
and resolve to use it well,
counting each moment precious – a chance to apprehend some truth,
to experience some beauty, to conquer some evil,
to relieve some suffering, to love and be loved,
to achieve something of lasting worth.
Help us, God, to fulfill the promise that is in each of us,
and so to conduct ourselves that generations hence
it will be true to say of us:
The world is better, because for a brief space, they lived in it

-Rabbi John Rayner


Our most precious asset is not our “gold” or even our knowledge. It is our time. How we use our time defines that which is most important to us. Will we relieve some suffering or experience some beauty or do something less constructive?

With each death I experience, I have a deeper appreciation of how fleeting are the moments of our lives. Taking the opportunity to reflect on that which is most important to us to accomplish, helps us determine how we will use each of the moments ahead.

Further, as I think about the phrase “fulfill the promise that is in each of us…” I appreciate that fulfilling our own promise and supporting others in so doing may take us on different paths. Once again, honoring the differentiation of those close to us helps us to fulfill the dreams and to make the world better.

I hope to see you in Greece next month.



The Aspen Family Business Program in Greece is next month. Register before it is too late!

Go to www.aspenfamilybusiness-oikos.com for more information and to register.


 

June Current Thinking Column

Wednesday, June 21, 2017

The Parental Aging Tidal Wave

by William Roberts
Partner, Aspen Family Business Group

The following entry by Bill Roberts shares his personal reflections on the demographic phenomenon we are all seeing: a huge wave of elderly parents entering a phase of increased dependence and death. The mobility of our society combined with the health care that helps people live longer has made this transition a difficult one for families. Bill offers great advice from his own experience personally and professionally.

 

As I circulate among the world of privately held business owners, family businesses, and the advisors to these owners a common theme has emerged almost always accompanied with a somewhat surprised look of puzzlement.

“What in the world am I going to do with my parents and their stuff?”

In whatever form it might take, the owners or advisors have recently encountered in their own situation or that of friends a loss of capacity or, in several cases, a loss of aging parents. What then follows are story after story of the quagmire they found themselves in trying to unwind boxes of financial information: "stuff" to be sorted through and disbursed to family members who likely could care less or the simple act of cleaning up and throwing out the 50-60 years of accumulated history of their parents.

The people I am encountering are very smart people and well aware of current trends. Most are good planners in their own right, yet to a person all of them agree that they were woefully unprepared for the quagmire they found themselves in, the legal entanglements that kept them from settling their parent’s affairs and most of all the emotional and time drain that this situation required of them. We found dealing with the social security/Medicare/Medicaid system a challenge in dealing with our own parents. It became so frustrating that we did what we probably should have done at the beginning, hire an elder care specialist and an elder care attorney to walk us through the maze of government regulations and paperwork.

One of the common themes is the inordinate amount of time the care taking requires. I have often read of very successful daughters who have to quit high paying jobs to devote themselves to the care taking role for their parents. The process puts an incredible emotional drain on the marriage and family life of the caretaker as the relationship with spouse and children suffers and sometimes ends in a divorce. Even the very process of wading through boxes of stuff and making decisions about what to keep and what to sell or give away is time consuming and emotionally draining. One friend of ours commented "cleaning out our parents’ house was one of the most difficult tasks I have ever undertaken".

Often parents have sold businesses and moved to Sunbelt cities far away from their children and support network. As their skills diminish their ability to manage their affairs becomes less and less and problems begin to emerge. Can they still manage their checkbook? Can they make rational decisions regarding contributions to the endless mailings from political and charitable predators? Who helps them manage their mail? They are often fearful of throwing away mailings with their address fearing the information will fall into even more predators. Mail piles up in a frightening manner. Giving up the checkbook often becomes a battle between caretaker and parent...be prepared!

The experience of many is that the suggestion of moving to assisted living is often met with significant resistance by their senior generation. This is a tough generation, used to being and living independently and like all of us having a deep connection to the home they are used to living in. The very thought of moving out of familiar surroundings into an assisted living environment is frightening to them even in the most dire of circumstances. It is the giving up of the very independence that has made them so successful that is an anathema to them. The alternative is to hire a caretaker or for one of the family members, often the daughter, to assume the role of caretaker. According to a USA Today study, there are 29 million such caretakers in the United States today.

A second challenge mentioned by many is the continued driving of the family car by the senior generation. My mother drove until she was 102 despite efforts to get her to give up her keys to her Pontiac Sunbird with a spoiler on the rear deck. When I questioned our caretaker for my Mom about her driver's license renewal on her 100th birthday, she laughed and told me that my Mom knew I did not want her driving and she had already taken the driving test and had her license renewed. To which my son replied, "I am never driving in the state of Georgia again"! While this was a humorous situation in our family, the danger to themselves and to others is very real. Macular degeneration and other debilitating illnesses affect the ability to see and judge speed and distances. Misjudgments abound endangering those around them resulting in the decision by the family that "we have to get the car keys away from the parents."

That is often easier said than done. I spoke with one daughter whose father was suffering from dementia as well as other physical ailments. She told the story of her father who she remembered as a loving caring man, but as she attempted to discuss giving up the car keys, he screamed at her and used language she had never heard him use before. It was a horrible experience for her and one that left emotional scars for her to deal with at a later date. This story is repeated over and over again, like their home, the automobile is a symbol of the parent’s independence, their ability to "go to town" when they pleased is very difficult to give up. As my son later observed, after we finally talked my mother into giving up her keys,

"If you think getting your mother's keys was difficult, wait until we have to take them away from you"!

And he is absolutely correct!

Having prior conversations about these very difficult subjects while everyone is cognizant and rational is vital. Having an agreed upon plan, discussing the transition with elder care specialist is an important step to developing a cogent plan of handling what is in most cases an inevitability. There are legal issues, the need for a Durable Power of Attorney which is effective in the state where the parents live, because it will become one of the most used documents that the caretaker or the family has in their arsenal. Durable Powers of Attorney are effective if the elderly person becomes incapacitated. Without it one cannot deal with bank accounts, securities accounts, pension administrators, financial advisors, medical facilities and insurance companies. We learned that the Power of Attorney in our case expired when she did. Had we not put another family member on checking and savings accounts, those accounts would have been frozen until cleared by a probate process, often a long and sometimes expensive process.

Our situation with our parents was not unique. As it becomes more common for people to live longer and apart from their family and old circle of friends, it is far more likely that the children who step up to help will have almost no familiarity with their parents financial life, what bills needed to be paid immediately, what were annual bills versus monthly expenses. Often there are multiple checking and savings accounts. Sorting all those out can require time and frustration with endless telephone voice mail systems and parents who cannot remember much about their finances. This is often accompanied by a deterioration of their health situation, demanding endless trips to doctors or hospitals. All of this is as you would expect: time consuming and since we are dealing in something we have never done before, filled with missteps and frustrations.

All of this can lead, even in the most understanding of families, to tension between siblings as one or more take on the role of caretakers. Resentments build up towards siblings who make no or little effort to pitch in and help with the parent’s situation. In talking to elder care attorneys and listening to their experiences, they tell story after story of these family battles precipitated by the perceived inequity in the care taking responsibility. This can lead to deep rifts and emotional stress which eat away at the fabric of the family.

Then comes the decision, "what do we do with the family home now that the parents are in assisted living?" Keep it, rent it, or sell it are all alternatives. But in our case the house was across the country in a small town with a limited rental market, and while in a good area, if left uninhabited could have been subject to home invasion, even someone trying to live there on an extended basis. There are also tax issues. If a house is sold prior to the death of the parents, there may be capital gains to pay on any increase in value over the parents purchase price. Holding the real estate until after the parent’s death under current law allows the house basis to step up to date of death value thereby avoiding any potential capital gains tax. Consulting tax experts can help in coming to a rational decision.

Assuming the decision is to sell, what to do with furniture that is often dated, not very well kept, and not desired by any of the family becomes a problem. A few cherished items may be kept by family, and hopefully who gets what has been sorted out prior so conflict does not arise when more than one sibling wants Dad's prize $12,000 shotgun - and a fight ensues. What to do with the rest?? There are companies that will come in and for a fee, auction off or take all the left over furniture and "stuff". In our case a "silent auction" was held and people from our church and other friends bought almost all of the furniture remaining. But whatever the result, having a plan between family members laid out well in advance will save hours of agonizing decisions. The second rule is to have the parents begin to sort through and throw out things defined as "stuff" they have been saving for decades (ex. I still have college textbooks--they go post haste). The children or grandchildren do not want the stuff and only items of historical interest to the family should be conserved.

An example of this, a friend of ours, who has lost both sets of parents, related a personal story over a dinner discussion of this dilemma. She has begun an "I am Dying Day", which she communicates to friends. On this day she spends the entire day sorting through their her considerable "stuff" and throwing away those items she believes none of their children have any interest in. This is so far a month’s long project dedicating one day every two weeks to sorting out and getting rid of things. She has thrown away boxes and boxes but admits there is still much to be sorted out. A morbid but effective approach in removing much of the mess the children would have been faced with.

We learned much from our experiences while seeing our parents lose capacities and eventually living through their passing. While emotionally draining, there were lessons to be learned. One, appreciate what we have while we have it. As the skills diminish, the ability to communicate and have those precious conversations will forever be gone. Gather as much of the family history as possible and preserve it for future generations. But practically, while people don't like dealing with the tough issues with their parents when they are healthy, it is much more difficult dealing with them after the tsunami hits and mental cognitive abilities are diminished. Develop a plan of action agreed upon by the family and the parents. Unfortunately, this problem is inevitable and approaching at a rapid rate. It is time now to develop a plan of action. Please set a deadline and set the family meeting to discuss a plan of action and then put your plan into motion!

Tools to help:

  1. Plan ahead with your parents. Having prior conversations about these very difficult subjects while everyone is cognizant and rational is vital. Make sure that all offspring are involved in a conversation about plans and responsibilities.

  2. For the “elder” generation, be sure you document your goals and wishes for your care, disposition of assets and where everything is kept (e.g. safe deposit boxes, insurance documents and passwords!). For a great “checklist” for this, see Bonnie Brown Hartley’s book “Sudden Death: A Fire Drill for Building Strength and Flexibility in Families”

  3. Regular “purging” of possessions.

  4. Hire an elder care specialist and an elder care attorney to walk us through the maze of government regulations and paperwork.

  5. Make sure that someone has legal access to manage financial matters.

  6. Interview (and video!) elder generations about their stories and memories so that these can be preserved for future generations

 

See also:  Before it’s too late: A Continuing Story (about Leslie Dashew’s experience taking over her father’s financial affairs) 


Registration for the Aspen Family Business Program in Greece opens this week!

Go to
www.aspenfamilybusiness-oikos.com
for more information and to register.


 

April Current Thinking Column

Saturday, April 01, 2017

Building and Sustaining Legacy of your Oikos

Best Practices for Families in Business

by Burak Kocer, PhD
International Associate, Aspen Family Business Group

This coming September, the Aspen Family Business Group will conduct a conference in Greece: Building and Sustaining Legacy of Oikos: Best Practices for Families in Business.

The Ancient Greek word oikos (pronounced ecos) refers to three related but distinct concepts: (1) the family members per se, (2) the family’s possessions and (3) the building, which houses the family.

The concept oikos can be found as part of many words in modern English such as “economy” among others: oiko and the verb nemo, which translates into distribute or allocate in English. This history of words shows us that the term economy itself was born from the need of allocating the rights and responsibilities among the household members. Although throughout the centuries, respective roles of the members in the family and in the society in general have largely changed, it looks like the need remains the same:

Defining the principles regarding the relationship between the family members and the family’s wealth.

And this is exactly what the experts of the Aspen Family Business Group have dedicated their careers to.

In September, we will discuss with our guests at the conference, the barriers against the continuity of family’s wealth and the best practices to prepare for effective transfer to the next generation. Beautiful Thessaloniki, in Northern Greece will host this exchange of experiences as an international group, thanks to the participation of families from different countries.

We invite you to join us for this opportunity of being part of this invaluable multicultural platform of knowledge sharing, where our partners Joel Paul and Leslie Dashew, pioneers in the field of family business consulting, will share their extensive experience together with my colleague Donnel Nunes, several other expert speakers and myself.

We are excited to explore how ancient wisdom would compare and contrast with best practices for families in business from different aspects including succession planning, knowledge management, governance of family and its business, as well as communication.

Defining the Eco-System

Aristotle in his Politics utilizes the term oikos in order to refer to everybody living in the house. This term is used today in the form of eco-system, to define the elements of a whole, which exist in an interdependent relationship. This is also the first step in our work with families: defining the family tree to understand who is involved in our oiko-system and how their perspectives differ from each other. This awareness helps family members to understand one’s own assumptions as well as others and to manage the expectations.

Succession Plan

Oikos also referred to a line of descendants not limited to the living members of the family but encompasses also the previous and upcoming generations. As a key element in sustaining the family’s legacy, we will discuss different elements of family’s wealth to be transferred to the next generation during the conference. The above-mentioned transfers require careful planning, including rigorous preparation of both the next generation to assume an enriched role in the family’s business and of the senior family members to experience a meaningful retirement period. As part of the focus on successful succession, Donnel Nunes will share with us his expertise on mentoring the next generation by highlighting pitfalls and how to overcome them. His session will also allow us to understand the targets for development when preparing the next generation.

Knowledge Management

Sustainability in families requires a concerted effort that has been well-defined in the literature. The challenging part, though is walking this path. In his book called Balancing the Emotional Ledger, Joe’s reference to Tolstoy reminds us the value of best practices in sustainability:

“Happy families are happy in similar ways, but unhappy families are each unhappy in their own way.”

One of the main elements of the family’s wealth to be transferred to the next generation is the knowledge in the family that makes the difference. In Thessaloniki, Joe will lead our session on knowledge management to help us identify, what this knowledge is, where it lies and how effectively it flows to where it needs to go.

Governance of Family and its Business

Having identified the best practices in terms of the essence, e.g., values, knowledge and ways to transfer them; the family needs to establish a system, which would ensure the sustainability of the family’s wealth. The central element of this system is decision making. My role in our conference in September will be to lead the session regarding the governance of family and its business, where we will discuss the question: “who is entitled to make what kind of decisions and through which procedures?” Since there is no limit to sophistication of governance models, (e.g., variety of committees, number of non-executive directors, differentiation of authorities), our focus will be on exploring best practices that are applicable to all organizations of different size and maturity.

Communication

Effective communication in the oikos is the sine qua non for the family to work on all these critical issues. Based on her extensive experience in working with complex family situations, moderating family retreats and guiding families through transitions, Leslie will broaden our understanding of the three critical elements, (i.e., safety, structure and skills) in effective communication and provide models on how these apply to families in business. Under Leslie’s guidance we will explore ways to set up the forum for regular communication, to adopt constructive confrontation to a family business decision and to enhance courage to share openly and handle conflict.

Let’s Meet in Thessaloniki on September 22-24

This two-day program is an excellent opportunity not only to enhance your awareness and skills for sustainability of your family business but also to socialize with and learn from the experiences of other families from different cultures and to visit some inspiring venues in Northern Greece and spend some quality time. Looking forward to meet you in Thessaloniki. In addition to the very interesting and engaging programs, additional opportunities to interact while visiting the area have been arranged for the 24th of September.

For further details about the conference please refer to our brochure and for your possible questions please contact Leslie Dashew.


View/Download the Conference Brochure:
Building and Sustaining Legacy of Oikos: Best Practices for Families in Business - Conference Brochure

 
 

 

March Current Thinking Column II

Thursday, March 30, 2017

Sustainability Leadership

by Joe Paul

In this blog, we will focus on the leadership of sustainable organizations.  The very survival of our culture and even our planet will depend on these leaders’ courage, skills, and insight. 

We will look at recent research that reveals factors influencing these leaders’ emotional and intellectual development.  Our understanding of these developmental factors will help us identify and train candidates at early stages in order to better provide them with the resources they will need.

The concept of sustainability was first used academically in the context of bio-ecology. Among other things, sustainability describes the capacity of an ecosystem to survive and prosper.  Ancient rain forests are examples of previously sustainable ecological systems that have been injured by human exploitation.

The Financial Times postulates that business sustainability is often defined as managing the triple bottom line; a process by which company leaders manage their financial, social, and environmental risks, obligations, and opportunities. These areas of sustainability are sometimes referred to as profits, people, and planet.

However, the Financial Times goes on to say that this approach relies too much on an accounting based perspective and does not fully capture the element of time that is inherent to business sustainability. They propose a more robust business scenario where sustainability is based upon resiliency over time.  These would be businesses that can survive shocks because they are intimately connected to healthy economic, social, and environmental systems. These businesses create economic value while contributing to healthy ecosystems and strong communities.

According to the World Council for Economic Development (WCED), sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” So, for industrial development to be sustainable, leaders must address important issues at the macro level, such as: economic efficiency (innovation, prosperity, productivity), social equity (poverty, community, health and wellness, human rights) and environmental accountability (climate change, land use, biodiversity).                      

Steve Schein, PhD. has written a book on this topic called A New Psychology for Sustainable Leadership – The Hidden Power of Ecological Worldviews.

By drawing upon interviews he conducted with 75 sustainability leaders in more than 40 multinational corporations and NGOs, Schein explores how ecological worldviews are developed and expressed in global sustainability practice. He draws upon traditional theories from developmental psychology and eco-psychology to better understand the best sustainability practices. Schein encourages us to think about leadership in a different way. The insights from this book can be usefully integrated into leadership curriculum and development programs to help the next generation of leaders respond to the global challenges.

Schein focuses on life experiences that shape eco-centric worldviews. Some of the early experiences these leaders described were:

  • Family of origin and early childhood experiences in nature
  • Environmental education and memorable teachers and mentors
  • Seeing poverty and environmental degradation in developing countries      
  • Perceiving capitalism as a vehicle for environmental or social activism
  • A sense of spirituality and service
  • In contrast, today’s leaders have also grown up in an anthropogenic worldview.  This view treats mankind as the epitome of evolution and capable of eventually controlling the earth.  This belief predisposes people to minimize the importance of factors such as global warming. One of the challenges that eco-centric leaders face is anthropogenic blindness and a profound complacency of large segments of societies.

    Schein draws the following contrast:

    An eco-centric thinker sees the biosphere at the center, with homo sapiens as one of the many thousands of species that are dependent on the Earth’s living systems for survival.

    Anthropocentric thinkers believe that human beings can ultimately control nature through technological and economic advances.

    Schein uses a term I have not heard before. It is “ecological self.”  I understand it to mean that we all are a cluster of “selves.” These selves are a cluster of scripts. Each script generates a self for the various relationships we have.  Examples are a father script, a professional script, a citizen script, or a spiritual self script, etc.  Each self, script, or role competes with the others for airtime. Each self is energized by certain external situations and by our perceptions of what we think is going on with our other selves. Most of these selves are trying to develop themselves to be better in each role.

    Dr. Richard Alpert (aka Baba Ram Das), author of Be Here Now used the analogy of a bus with around 12 or 15 passengers. Each passenger is one role we play in our life. Sometimes two or more roles will join forces to deal with important things going on outside of the bus.

    One thing that is important to know is that sometimes our selves are helpful to other selves, but they are also capable of derailing one another (but that’s a separate blog).

    There are a number of best practices that foster business sustainability and help organizations move along a sustainable path. These practices include:

    • Involvement of stakeholder groups in decisions
    • Subject your planning and implementation to global standards
    • Identify the knowledge that differentiates your organization in the marketplace, locate this knowledge, and find out if it is going where it needs to go
    • Understand your organizational life cycles
    • Create an organizational culture that attracts the best and the brightest

    Dr. Schein shares a story about the emergence of his eco–self as a young boy high in the trees  in the deep woods around his home.  After reading Dr. Schein’s latest book, I realized that I had an ecological self that I have often called upon, but that I need to use a deeper understanding of my own and others ecological selves to further my relationships. 

    The description below illustrates a joint effort by my father-self and my ecological-self at an important cross road.

    A River Passage

    For Chris on the eve of his marriage

    We took a three-day Deschutes trip; you, our dog, Jera, and me.  We had run a lot of rivers together but never just the two of us.

    I wasn't sure what the conversation was that we needed to have before your marriage, but I knew it was out there waiting for us like a rapid we had never run before. The trip took us through 44 miles of steep desert canyons. I had run this stretch of the river some years ago, but had no clear idea of what comes when and what it would be like.

    You did most of the rowing since you had never run the Buckskin Hollow to the Columbia stretch of the Deschutes.  I watched you read the rapids with the dark eyes we share. Watching your “now” expand to the limits of your senses; a talent that rivers had drawn out of you over the years.

    It started raining at 6 AM the second day and we rowed in our rain gear until we set up camp after lunch. Then the rain stopped. We were above Harris Rapids that second night facing a 1000 foot cliff across the river. That wall of rock was home to a herd of big horn sheep. We sat in camp appreciating that the rain had stopped, and we watched the big horns work their way across vertical faces on ancient lava flows. 

    Then we had the talk. About commitment, memories of your conception and your birth, the kind of son you had been, how a man's place in the world shifts when you change from a son to a father. I cried as I remembered how difficult your birth had been. I told you how I had apologized when you were two hours old for how hard your entry into the world had been--and how I had promised to make it up to you and take you on lots of river trips. 

    You then put your hand on my shoulder and told me I had kept my promise. I told you how a father and a mother had been born when you had been born. I also told you how raising you had been a dance of holding you close and letting you go. I talked about how letting go was always accompanied by a sadness of losing the intimacy of you as my child--and how that sadness always quickly became the fulfillment of you growing into yourself and becoming your own person.

    And we talked about how your marriage is another fulfillment for me along with the familiar sadness of letting go.

    And so deep within the canyon silence we found the words that wanted hearing as much as wanted to be said.

    The third day was sunny and warm and full of rapids that you ran with grace and confident composure.

    Without knowing it my son and I had embarked on our own sustainable journey of our eco selves. But thanks to Dr. Schein’s writing I have been taken to an unexpected place where I can utilize his ideas in my own practice.

     

    March Current Thinking Column

    Thursday, March 16, 2017

    Evolving Responsibilities of a Family Business Stakeholder

    by Leslie Dashew


    What makes family-owned businesses different than others is the web of complex relationships that surrounds the business. Consider the daughter or son who is born into a family with a business. They often feel that they have a sibling that is more important than they are: the business! This can lead to jealousy or resentment of the attention that this “sibling” receives. Jealousy and resentment mark only a few of the attitudes that comprise this family-business web, with others such as entitlement, greed, and a strong sense of responsibility often surfacing as well. 

    As the lives of young people evolve, they often feel they cannot merely decide on a career of their interest/choice, but rather they must decide whether or not to join the family business. Even when parents indicate that they want their kids to follow their passion, wherever it takes them, the null hypothesis is engagement with the family business. Some youngsters look at the business as an “employer of last resort.” In any event, the question of whether to take a job in the family business must be addressed.

    For some youngsters, the sense of responsibility for the family business comes with ownership. Parents often bestow shares of the business upon their offspring without their knowledge as part of estate planning. At some point, these new owners look at the tax forms they are required to sign and begin to ask questions. What does it mean to be an owner? What are my rights? What are my responsibilities?

    And then there are the “married ins,” or the in-laws who join the family. Often, they hear about the challenges, conflicts, and perks that are associated with the family business. However, for many, they feel awkward about the connection and not sure where or how they should engage this “family member” known as the family business. 

    The sometimes-awkward dance around the family business becomes manifest in the disparity between which information is shared or omitted concerning the family business and how to communicate this information, especially pertaining to those family members not working in the business. In fact, some family members who work in the business and even perhaps own part of it, may also feel awkward about asking the types of questions that a board member or investor might ask. 

    So as roles evolve over time, it is important that family leaders recognize the changes that should happen in the engagement level that various stakeholders should take in the family business and the subsequent preparation required for appropriate involvement. Educating family members about the business, industry, roles, and responsibilities of ownership are important aspects of this preparation. (See for instance, our monograph Ownership Education). 

    Understanding the fundamentals of business management are important for all family stakeholders so they establish appropriate expectations of the family members who are working in the family business. For example:

    • What is the vision for the future of the family business? Who establishes it?

    • Does the company have a strategic plan for achieving the vision?

    • What are reasonable expectations for return on the investment (ROI) that the family has made in the business? What are industry standards for profitability, turns in inventory, revenue/employee? What reinvestment is necessary in order to continue the sustainability of the business?

    • How efficient are the processes of the company? How are they measured? Are they documented and automated?

    • How are employees recruited, selected, trained and developed? Are there effective human resource systems in place? Are there succession plans (emergency and long-term) for leadership roles in the business?

    • What are the greatest risks to the business and how are these mitigated? (regulatory, litigation, competition, obsolescence, environmental, etc.)

    • Does the business use debt effectively, including having access to a line of credit?

    • Are there appropriate financial controls in place and transparency?

    Being born into a family with businesses or assets does not mean you know about these components of business knowledge. Yet, sometimes there is a sense that one needs to oversee what is happening at the family business or cast an opinion without having a proper context to do so. This can become the source of great conflict in the family if not handled properly.

    The Annual Women in Family Business Program being conducted this month by Leslie Dashew at Miraval Resort and Spa will help participants to gain the perspective and tools to better manage the responsibilities of a family business steward. Stay tuned for further insights from this program.

     

    January Current Thinking Column

    Monday, January 30, 2017

    Life Transitions and Planning

    by Leslie Dashew


    Nowadays, we live longer and are typically healthier than our parents were at the same point in their lives. With that perspective, we have more active years in our lives than our “role models.” This creates a different, larger book in which we can write the story of our life—one for which we have very little preparation. Thus, it is useful to think of our lives in terms of “chapters” that have their own individual timeframes associated with them, rather than the fixed, prescribed stages of adolescence, career and retirement.

    I once gave a talk in Bermuda entitled “Health, Wealth and Happiness: Can We have it all?” The answer to the question is yes—we can have it all, but maybe not at the same time. Some of our goals may be sequential. With our lives being longer, marriage and children sometimes happening later, care for our elders or boomerang kids continuously transpiring, and leadership transition occurring earlier than we may like, the chapters of our lives might have all the activities we envisioned, but just at different times.

    I believe that the earlier we begin this process of documenting our dreams and clarifying our purpose, the easier we will find these transitions. Women who want a career and children need to think about their biological clocks. Men and women who want to travel and be creative, as well as have a secure lifestyle, need to think about how they picture the type of travel and what employment provides that security as they take their steps into careers. Family business leaders who want to see their business legacy continue must thoughtfully plan the preparation of successors and their own exit strategy to coordinate developmental stages and multiple generations’ dreams. 

    I know of two such men who had passions that they put aside for a while in order to develop lucrative careers. One studied painting in college, but chose a business route, running many and ultimately becoming a business advisor. In his 60s, he returned to painting as a focus of his life and blossomed in his creativity. The other man had a strong passion for helping children, and in his “spare time,” developed philanthropic initiatives for them. As he turned over the reigns of his business, he jumped in with both feet and hands to help kids. 


    Entrepreneurs, in particular, have a hard time transitioning out of an active business life. Their identities are so intertwined with their businesses that they typically lack significant engagement outside of work. Many desire to turn over the reigns of the business to a successor, but find it difficult to feel significant and fulfilled without their business leadership roles.

    Clarity of Purpose, Vision and Values


    As we go through the chapters of life, our purpose, vision and values may adjust with our experience, accomplishments and growth. For example, an individual who grows up without financial security may value financial security and work to create that in his/her career. In fact, we have often heard men say that their purpose in life is to “provide for their family.” But what happens when you accomplish that financial security and your kids are doing well on their own? Then, what is your purpose? Is your greatest value still financial security or is it now free time to explore the world and/or to help others? 

    Those of you who have read my work in the past may recall that I have written about the importance of purpose and vision. These define why we are here (purpose) and where we are headed (vision). How we go about that journey is described by our values (saving, because we value security, spending on art, if we value aesthetics, skydiving if we value adventure and thrills, etc.). 

    As I reflect on my mission (My mission in life is to help people utilize, develop and appreciate their capabilities and those of the people whose lives they touch), it has been pretty stable from youth through now. My vision of life has adjusted with time as have some of my values. Not too long ago I created a new vision statement for this stage of my life and it is pulling me into a future as an “elder.” This vision statement helps remind me of the chapter of life I am moving into rather than the one I am leaving behind. My vision statement is:

    To be a financially secure, physically fit, respected elder advisor who is centered at home with my healthy husband, working when I want, taking pictures, writing and publishing books with photos, poems and wisdom, hanging out in my garden, traveling for fun, visiting my family and friends, supporting causes on an ad hoc basis both financially and with advice, and having gatherings of friends, colleagues and clients. 

    There are aspects of this which are coming along nicely and others, like being centered at home and not traveling as much for business, which I have not attained! But it is still a work in progress. Vision statements should be aspirational, not something already attained. 

    We now know from neuroscience, that the clearer our images are of what we wish to attain, the greater the probability it is that we will do so. As such, at whatever stage in life you find yourself, consider the following questions in helping to clarify your personal purpose (mission), values and vision: 

    1. Purpose/Mission: Why do you believe you were born and what are you supposed to accomplish in this lifetime? What would really disappoint you if you didn’t personally accomplish it? (Hint: think of a verb—e.g. to create, to help, to foster, to make). Consider what others would say at your funeral if they said you died contently with what you had accomplished. 

    2. Values: What is important to you about how you live your life? (Hint: think adverbs and adjectives, as well). A value is that which is important to you (e.g. not being wasteful, being helpful, having fun).

    3. Vision: What are your aspirations for the next chapter of your life (to be…, to do…, to create…, to have…) that would be truly fulfilling to you? This is a great time to brainstorm and not censor yourself. Write down whatever comes to you. Then think: “If I completed this chapter of my life and I haven’t done x, y or z, I would be really disappointed.” What are those thoughts? If you have many, prioritize them. For some people, it might be to have children. For others, it would be to change occupations; for still others, it may be to see the South Pacific. If it isn’t in your vision statement, it may be off of your radar screen and thus, not as likely to be accomplished. 

    Whose life is it, anyway?


    Many people find themselves initially saying “this is not what is expected of me.” Some people feel it is difficult to dream. I recall one woman who came to my “Women in Family Business” program. When we would do visioning exercises, she would say “I can’t dream.” Finally, one day, she realized that a dream of hers was to hike in the Pyrenees Mountains. She wrote it down and described what she envisioned the experience to be like if it were ideal. Several years later, she sent me photos of herself on that hike! She said “I can dream!!” For most of her life, she reacted to what others expected of her in her roles as daughter, wife, mother, sister or employee. Because those roles were so consuming, she didn’t allow herself the luxury to dream. Many of us have obstacles to dreaming as well.

    But whose life is it? When do you get the chance to move proactively into the next chapter? Each of our transitions in life is easier and more fulfilling if we have given ourselves the opportunity to put ourselves on the pages of the chapter. It may not all happen on the timetable we would desire, but we enhance the probability of actualizing the dream when we give ourselves permission and opportunities to define it. 

    Dream on! 

     

    December Current Thinking Column

    Wednesday, December 28, 2016

    Professional Satisfaction: Not a Footnote to a Career

    by William Roberts

    Have you received a compliment lately that was unexpected and reflected well on your abilities and professionalism?  This is a season when we often exchange pleasantries, whether it be a “Merry Christmas” or “Happy Holidays,” that share our good feelings about the season or year we have almost completed.  Then, along comes a comment that is anything but ordinary or mundane—a sincere, thoughtful, from the heart expression that stops the world for a moment and causes a pause for reflection.  Just such an event recently occurred not once, but three times all within the last month. Clients, some of 20 years, took the time to express appreciation for the work their advisors have done resulting in two successful G-2 to G-3 transitions and a third that is well on its way to a plan of transition to G-2.

    The stories behind these successful transitions or planning processes are as varied as the families that created them, yet there are success principles/lessons that run through all three and are instructive to us.  A bit of background will help put the challenges these families faced into perspective and lay to rest any thoughts that these were easily arrived upon transition results.  In fact, quite the opposite, there were facts and strong opinions that could have easily flipped the switch to a completely different result devoid of the principles and values that followed during the planning process.

    Each of these families began their planning process knowing that there were likely going to be next-gens in G-3 who were employed in the business and some who would not be employed.  Among those employed, there was a wide variety of skills and dedication to their work.  There was compensation, family employment, and in some cases, entitlement issues to be dealt with.  In one case, there was not a clear-cut "leader" that had emerged and a real question about whether the next-gen had the unique skills necessary to be CEO of the family business.

    Despite the plethora of challenges and potential landmines, there was also foundational pillars upon which we could build the plan for the continuation of the family business.  The first and foremost was deep-seated values that had been passed down from generations before.  Two of the families had deep spiritual beliefs and respect for one another that was critical as we moved through the planning process.  

    Each of these situations shared the following values: strong family ties, respect for one another (even during disagreement), a desire to maintain family connection and to deepen the ties to one another, a passion to maintain the business the family had passed to them and to pass it along stronger and better for the next generation.  

    Passion for education as it related to developing better management skills, and other talents valued in the family business were evident and important to the success of the transition as well.

    Interestingly, what the families refused to allow—obstacles to destroy their connectivity to one another or to damage what had been passed to them—revealed additional family values. One such was the cancer of "entitlement,” another was the destruction that can occur from the impact of a forced sale of assets due to estate taxes levied on the value of the family business.  A third was jealousies or rivalries/conflicts caused by the employment of certain next-gens over others. Another was life choices made by some of the next-gens that could have been destructive to the family and ultimately the success of the planning process.  Each of the families dealt with these challenges in unique paths, but all referred back to their values to deal with them in non-destructive ways.

    The lessons learned from these three families hopefully will be instructive to your family path, ultimately lending hope when times are difficult, as often they are. Hopefully, if these principles are followed, a successful outcome will ensue.  In looking back over the years of work with these families, their commitment to putting family first was inspiring.  They were not going to let the challenges or difficulties get in the way of their relationships.  There were times of constructive conflict when actions were challenged that were counter to the families values, but it was done with a goal of inclusion instead of exclusion.

    In each of the families we dealt with the "equal versus equitable" philosophy surrounding the ownership of stock and participation in the family business.  Each family has dealt with this issue in its own unique way, but with common values exhibited. Those values are the owners of the stock control the decisions regarding the business.  However, the design of their plans focuses on exhibiting fairness to the non-active shareholders.  There are control mechanisms in place to protect the business (the goose that is laying the golden eggs) from distributions that could be damaging to its health and future while still providing benefits from the ownership of the stock in the family's business.

    All the families have developed a “Shared Vision” statement that incorporates their values and principles.  This vision statement is prominent in family meetings and evident in the decision-making of the family and the business.  We like to think of it as the "lighthouse on the hill" as it provides guidance when the family is working through difficult issues or evaluating opportunities that are presented.  If the strategies or opportunities are outside of the family's vision of where they want to go, it is discarded and time is only spent on those strategies consistent with the Shared Vision.  

    It also allows the family to identify obstacles that lie between their current situation and where the Shared Vision would have them.  They have not shied away from dealing with those obstacles. Rather, they have aggressively sought the advice or advisors necessary to creating a solution.

    This leads me to another best practice observed in these families: a relentless dedication to the effort necessary to work through their planning with their advisors.  Each of the families has spent countless hours with a variety of advisors to assist them in crafting the solutions we celebrated with them this month.  Millions of dollars of tax-saving strategies were implemented to avoid the demolition of the business due to estate taxes.   Specialist advisors were brought in to address unique problems that family members faced.  Testing and evaluations to determine skill sets and compatibility were used appropriately.  Mentoring, education, and training were a hallmark of each situation resulting in the next-gens preparedness to accept the mantle of leadership.

    Consistent with the dedication to planning was a loyalty to the advisors who knew and understood the history of the family, which contributed to suggestions that were in line with the family's values.  They were also aware of where "bodies were buried" so as to not step on long-buried landmines. While not afraid to bring in specialists when needed, the loyalty to existing advisors allowed the planning to proceed with an eye to the past as well as the future.

    Inherent in all the above was a dedication to follow through.  Meetings ended with action plans, timetables, and leadership responsibilities.  Accountability was maintained among advisors, which raised performance levels and kept projects from languishing due to procrastination.  This ultimately led to completion and implementation of agreed upon strategies and to the success we see today.

    Lastly, in all of the families, there was a real concern and compassion for the employees, many of whom had been with these companies for years.  There was a respect for their opinions and skill sets and an overall recognition that the business was highly dependent on their high-level performance.  The family was not only concerned about employee work performance, but also the families of their employees. They exhibited this caring in tangible and generous ways specific to the needs expressed.  I have found this to be a consistent value not only among these three companies, but also in many others over the years.

    It is always heartwarming to see successful transitions of family businesses.  What we have learned is that transition is not easy or automatic, but rather a result of thoughtful leadership, strong values, consistency and dedication to the goal of transition and a commitment to the process.  Hopefully you will find the same principles in your family business and will develop your own success story to share with your advisors and peers.

     

    November Current Thinking Column

    Sunday, December 04, 2016

    Consilience

    by Joe Paul

    Last July, the Aspen Family Business Group put on a conference called Consilience, which in Latin translates to “jumping in together.”  It was a learning intensive for non-clinical professionals who wanted to be comfortable working with families in business or those who manage other significant assets. An international affair, our conference limited participation to 20 people from all over the world, each bringing a unique perspective. In this blog, I am discussing some ideas left over from the conference that are somewhat off the beaten path for most consultants. The questions that underlie these issues are the psychological and social effects of the geometric evolution of technology.

    How can we help prepare our clients for the flood of “game changing” technologies that are already coming down the digital pike? For example:

    Driverless cars and trucks

    Contact lenses with embedded facial recognition and search engine software

     3-D copy machines

    Nano-robots the size of red blood cells that can cross the blood/brain barrier 


    This blog will only be a brief introduction to two futurists, Ray Kurzweil and Ross Dawson. You will find links to video of both people among their quotations below.

    It is staggering to think about the amount of knowledge on planet earth that is being created and managed every second of every day. There are oceans of data, unending amounts of information, all of the knowledge we have and the depth of the wisdom we have acquired being continuously created, integrated, improved and preserved. This includes every corporation, city, medical specialty, army, universities, and science discipline.

    How does one plan for their business and their family in the hyper-interconnectivity of the planet?

    Will the earth become a meta-life form in this stage of evolution?

    The following excerpt from Ross Dawson begins to answer these questions. His book, Living Networks, attempts to answer many of the challenges we face as we approach an increasingly connected and technologically-integrated society. 

    How Connectivity is Bringing Our World to Life

    “We who are privileged to be alive today are participating in the birth of a new life form: the global networks. All the talk of the ‘new economy’ in the late 1990s reflected many of the changes at play in our world. In truth, they may well have underestimated the importance of the juncture we are at, which represents a complete change in the nature of society and business. Since the dawn of humanity people have been the dominant force on our planet, for better and—sometimes—for worse. Now individuals are being transcended by a higher-order life-form, which is connecting and merging most of the people and all the digital devices on the planet into a single entity.”

    “In some ways we have been moving towards this point for millennia. Just as amoeba or other single-celled organisms flowed and interacted in the primordial soup long before eventually coming together to form multi-celled organisms, individuals have been developing increasingly rich interaction over the years. The pace has accelerated, and now we are finally reaching the stage at which we must think of ourselves and the networks that connect us as an entity in its own right. This is happening on two levels. First, integrating humanity and the flow of information and ideas so closely it becomes as a single ‘global brain.’ And second, the computing and communication technologies themselves are forming a system with all the characteristics of life. As we shall see, these two concepts overlap strongly, as people and technology increasingly merge.”

    “You might find this idea ridiculous, intriguing, far-fetched, amusing, perhaps all of these. I will argue in this book that once we adjust our understanding of life to the new world that we find ourselves in, that it is simply a fact. However this book is primarily a business book—it is intended for people who are managing organizations, working for themselves or others, trying to make a difference in the world, doing what it takes to achieve success in any domain. I certainly hope that as you read this book you come to believe and understand that we are living within networks that are themselves living. That isn’t important, however—in any case you will see how it is useful to think of the networks as being alive, and the very practical business implications of a world in which information and ideas are flowing vastly faster, more broadly, and more richly than ever before. As such it is an examination of the apotheosis of the information economy.”

    The Superorganism

    “The idea of humanity as a whole being considered as a living entity is by no means a new one. Some of the early proponents include the nineteenth century evolutionary biologist Herbert Spencer, who coined the phrase ‘survival of the fittest’ before Darwin used it, and science fiction writer H.G. Wells, who wrote a book World Brain outlining his vision for human minds coming together as one. The revolutionary mystic Pierre Teilhard de Chardin brought into our language the word noösphere, which means the global domain of mind. Over the last decade the ‘global brain’ movement has gained momentum, however primarily as a discussion between academics on the social implications of the birth of a higher-order entity”.

    “The word ‘superorganism’ means an organism that is itself composed of other organisms. Plants and animals are made up of many living cells, however those cells cannot survive on their own. In contrast, beehives and ant colonies are prime examples of superorganisms. Each insect has an independent existence, but often can only survive as part of the larger societies of which they are part. The behaviors of bee swarms or ant colonies emerge at the level of those societies, and cannot be predicted from studying the individual insects”

    “The idea of a superorganism is that it can be considered as an integrated whole. It is clear that a multi-celled organism such as a tree or a cat is an integral whole—messages and responses flow through the entire organism in a coordinated fashion. However while an ant colony consists of many ants that are alive in their own right, it can be thought of as an entity because of the complex signaling that enables distribution of labor and coordinated actions. These signals can be considered to be the nervous system of the life form, whether they are within a single multi-celled organism, or between the individual living entities that make up a superorganism.”

    The Business Implications of Living Networks

    “So what are the implications of the birth of the living networks? What does it mean for the organizations and individuals that are meshed into a life form far greater than themselves? Those are the issues we will explore throughout this book, seeking wherever possible to find practical approaches to the key business drivers we confront every day. How does it affect the way we manage people and processes in organizations? How should we develop valuable relationships inside and outside our organizations? What is the impact of intellectual property issues on our life within the networks? What organizational strategies will be successful? As individuals, how can we live richer and more fulfilling lives?”

    “The first thing we must understand is that the living networks form a whole. There are no true boundaries within the living networks—the flow of information and ideas that is at their heart respects no artificial borders, be it across nations or organizations. Most managers think at the level of the organization, about their company and how it interacts with its environment. This is dangerous, almost delusional. We must think first on the level of the flows of information and ideas, the flows of value, the global nature of the networks that in which we participate. Only from that perspective can we understand how our firms can create and extract value by integrating and combining with these rich flows. The way we approach all of our business relationships, including working with customers and suppliers, outsourcing, alliances, and collaboration, determine the success of the organization.”

    “Information and ideas—and the relationships through which they flow—are all that matter in the economy today. To take just one flow of value in the economy, whether you are mining and refining copper, transporting it around the world, building and selling products from copper, or trading copper futures in the financial markets, the effectiveness of your business decisions is based on the relevance, accuracy, and timeliness of the information you have, and the quality of the ideas you apply to your processes. The critical importance of information and ideas in the economy is by no means new. However it is now predominant.”

    “The only truly sustainable competitive advantage in a world of free flow of information and ideas is the ability to create and implement valuable new ideas, in other words to innovate. However the dynamics of innovation are changing dramatically. As technology becomes increasingly advanced, and thus specialized, no organization can claim to have the full spectrum of expertise required to innovate. We have no choice but to collaborate in order to keep ahead. And this creates a whole minefield of intellectual property issues. The concept of the living networks gives us powerful insights on both how we create intellectual property.” 

    To read and learn more information about Ross Dawson’s entire book, Living Networks, click here.

    The next concept I want us to be thinking about is singularity. In The Singularity Is Near: When Humans Transcend Biology, Ray Kurzweil presents the next stage of his compelling view of the future: the merging of humans and machines. This ultimate merger between man and machine is what Kurzweil refers to as “the singularity.”

    Upon a mere cursory Google of Ray Kurzweil and the accelerating speed of technological change, you can see his description of the singularity. It describes a future period during which the pace of technological change will be so rapid, its impact so deep, that human life will be irreversibly transformed. Kurzweil further postulates that we are already in the very early stages of this transition, and that within just a few decades, life as we know it will be completely different. He writes,

    “The singularity will represent the culmination of the merger of our biological thinking and existence with our technology, resulting in a world that is still human but that transcends our biological roots. There will be no distinction, post-singularity, between human and machine nor between physical and virtual reality. If you wonder what will remain unequivocally human in such a world, it’s simply this quality — ours is the species that inherently seeks to extend its physical and mental reach beyond current limitations.” 

    For more information about Ray Kurzweil, click here

    The accelerating pace of the evolution of technology cannot be maintained with traditional means.  Some of our clients will be on the cutting edge of this change. One way we can help them is by using techniques for making their tacit knowledge more explicit.  We can answer questions like: What is the knowledge that differentiates your business? Where and how is that knowledge preserved and protected? We can also find out where the flow of knowledge is blocked. 

    Within the next few decades, there will be a large percentage of companies that do not survive this acceleration. Often the conflict between family members is the greatest liability for the company. These relationships will prevent the family from adapting to the changes required in the transforming marketplace. We can help with that.

    I welcome you to get in touch if you would like to compare notes on this multifaceted topic. I encourage you to message us here

     

    October Current Thinking Column

    Saturday, October 29, 2016

    Exploring the “Troisieme”

    by Leslie Dashew


    As I find myself in the “troisieme,” or the last third of my own life, I find that I am trending along with the majority demographics right now. That is, I am a “baby boomer” and my peers are exploring how to find meaning and impact during our longer lives. 

    Why is this important? If we hold on to our leadership roles and do not work on transitioning, we keep the next generation from having their chance to lead during their generative years. As an example, I recently saw a production of a play entitled Charles III about the supposed death of Queen Elizabeth and the succession of her son, Charles. However, that transition happened when Charles was an “old man,” and the next generation (his kids) were of the age at which they thought they should be ascending to the throne. Charles waited to have his chance, only to be seen as out of touch with the realities of the current political environment. 

    Since it is likely that many of us will live well into our nineties, even exceeding 100 years of age, it is important that we plan not only for our financial security and medical needs, but also for a life of meaning. Erik Erickson, the noted developmental psychologist, told us that each age of our lives has a unique challenge to resolve. In the elder years, the dilemma is “integrity vs. despair.” If we can look at our lives and feel we are living in accordance with our values and using our waning energy toward those values, then we experience the joy and peace that comes with integrity. On the other hand, if we only look at our losses and what we can no longer accomplish, we despair. The ability to accommodate the evolving reality that we are experiencing with an attitude of acceptance and appreciation, while supporting the following generations with our wisdom and love allows us to gracefully age. 

    Angeles Arrien, a cultural anthropologist who died early in her elderhood (just a few years ago), did a seminar on the second half of life that I attended some years ago. She pointed to some of the touchstones and opportunities that our later years provide for us. Some of her comments that resonated with me are the following: 

    Before I explore meaning, I have to explore authenticity. Allegiance to honesty and integrity is greater than stubbornness and pride.

    I see the stubbornness and pride in some elders who feel that holding on to power and control is the only way to continue to have impact and meaning. Having the courage to honestly look at the world today and authentically and openly recognize our own abilities/limitations allows us to stay connected to younger generations and our peers in very significant ways. 

    The mark of wisdom is a person in the second half of life who is committed to being a unifying force, creative and solution-oriented. Wisdom is not age-bound. Every culture (except ours), respects elders. We need to develop intergenerational, multi-disciplinary, and multi-cultural councils to solve problems. 

    When we can connect across generations in an organized manner and share the wisdom we are harvesting, we enable future generations to consider how to apply that wisdom in arenas we have not played. The combination of wisdom of the elderly with the understanding of today’s world is magical.

    We cannot have wisdom without integrity and character. And it is never found in the extremes. Nor is it found in states of indulgence or denial. When in denial or indulgence, we normalize the abnormal, taking us out of our integrity base. It is always found trying to hold all the options and possibilities to find an elegant solution. 

    Finding the way to make connections, come to middle ground, and being a force for “and” rather than “but” is a great gift that comes from seeing the benefits of collaboration over conflict.

    Reciprocal mutuality is coded in our genetics—to help one another. In the second part of life, generativity includes passing on the family stories. We begin to harvest our journey, mend our life, and tell the stories that transmit the values and lessons learned. Young people often love to hear the stories of their ancestors and what contributed to their lives. Through this generativity, we can lead the process of healing schisms. We can encourage compassion and mutual understanding. We can demonstrate that our lives are more productive when we engage others in this mutual appreciation and complementary roles.

    We have much to do in this stage of life. It is important that we identify what it is that we wish to leave as a legacy and how we can support the next generations in their work. Since living this long is a new phenomenon, we have few role models to guide us. Rather, our exploration and travels offer paths for others to consider as they approach this age as well. 

     

    September Current Thinking Column

    Friday, September 30, 2016

    Implications of a Transition Plan on Today’s Operations:

    Redefining the Role of the Leader

    by Burak Kocer PhD

    As we work with family business leaders to plan the transition of a company, one of the main topics becomes redefining the way decisions are made and carried out. In fact, a family business leader’s transition plan would be a void letter if it had no implications on how the company is run today.  Alas, this is a change that is easier said than done and a true test of sincerity for the owner. Quoting Morpheus of the film The Matrix, “There is a difference between knowing the path and walking the path.”

    The most explicit impact of the transition plan on the way the company is run today concerns delegation. The mere fact that the founders grew a small startup operation to what it is today gives them every legitimate right to undertake all critical decisions. As the operations expand, the founders hire managers with specific executive responsibilities, yet in many cases, they work so closely with those managers that you would not necessarily call it a “delegation.”

    In this article, I would like to discuss three main problems that stem from a lack of proper delegation. Subsequently, I will suggest various ways on how to expand delegation.  

    In the absence of an effective delegation:

    The owner becomes a part of the decision.

    When the owners work closely with the managers, i.e., make decisions together, they eventually become a part of those decisions, which leaves no room for the development of accountability.

    There remains no space to grow talented managers.

    A founder, who undertakes all decisions regarding the creation of new systems, eventually leaves behind an organization that is incapable of creating anything new in his/her absence. However, this is exactly what is expected from a leader—to not only run a system effectively, but to be also capable of creating new ones.

    A leader dealing with numerous key performance indicators (KPIs) cannot see the forest for the trees.

    Unlike the number of different horizontal responsibilities that a manager assumes, the number of KPIs that he/she should focus on should decrease with the level of  increasing hierarchy. When a founder strives to manage operational responsibilities, he/she ends up focusing on a vast range of KPIs, which obscure his/her appreciation of the overall situation.

    Redefining the Founder’s Involvement in Business

    A transition plan should eventually redefine the way in which the founder is involved in business processes today. Here are some suggestions to facilitate this most challenging task for a founder:

    1. The best way to emphasize delegation is, to the extent it is possible, limit the cooperation between the founder and a manager to formally defined meetings, rather than informal discussions ad hoc.

    2. Changing the meeting frequency from weekly to biweekly or even monthly can help implement the expansion of delegation incrementally.  

    3. In order to make delegation properly work, a sound control system should be provided. When redefining the leader’s involvement in the operations, you need to make sure that internal controls are up and running. An internal control checklist is a critical instrument that requires periodic review.

    4. Although valuable as time savers, abbreviations sometimes make us forget the real meaning of the concept. For example, KPI stands for key performance indicator and has value in limited numbers. A priority matrix can be utilized to outline monthly, quarterly, and annual review periods for each KPI in order to keep the meeting agenda more concise.

    5. Tolerance intervals should be defined for the KPIs not included in the predefined review schedule and should be reported if and when there is a deviation greater than the accepted level. For example, this can be 1% for an indicator and 3% for another.

     

    rule
     


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