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Spring 2013

August 2013 Column

Wednesday, August 07, 2013

Welcome to the New Aspen Family Business Group Website

Both our work and team have evolved and after 25 years it was time for us to refresh our image and update our website. We hope that you will find it easier to access us as well as our knowledge and that you will enjoy exploring our library of ideas. 

Among the changes is a new column entitled, “The Aspen Current Thinking Column.” Here, the AFBG partners and guests will periodically share new ideas and reflections with you. If you sign up for the column, we will let you know when we have posted a new paper!

We are also expanding our reach by collaborating with select colleagues around the world. Our newest associate, Burak Kocer, PhD, will work with us from his base in Istanbul, Turkey, to provide services in the Balkans, the Middle East and Central Asia. Burak has an impressive background in governance, as a professor, an independent director on several boards and as a consultant. Burak is using his prodigious linguistic abilities to help us develop new books in Turkish and English. He is also translating our existing books and newsletters into Turkish.

DIFFERENTIATION:

Are your family relationships the biggest liability that you are facing in your family business?

“The lower the level of differentiation, the more likely the family, when stressed, will regress to selfish, aggressive, and avoidance behaviors; [and] cohesiveness, altruism, and cooperativeness will break down.”  

-  Murray Bowen

In our annual AFBG Spring meetings, we invite a small group of colleagues to share new ideas and expand our thinking. In this year’s Spring meeting, we explored the topic of differentiation. The term “differentiation” describes the complex interaction of two forces in life: centrifugal force and gravitational force. Centrifugal force pushes things apart, while gravity holds things together.

Human behavior, emotions and thought processes emerge from the interaction of these two forces along a continuum that spans from enmeshed group thinking to rigid emotional cut off from those around you. Enmeshed families, where the gravitational pull is too great, have trouble allowing space in relationships and restrict independent action. Disengaged families are pushed apart by the centrifugal force and have little interaction among members. This is manifested in lack of communication, trust and collaboration.

Differentiation is also a very useful concept when applied to the study of subsystems in family businesses. We look at the family business both as a group of individuals striving for self-definition, and as a larger system composed of sub-systems (e.g. the Board of Directors, the shareholders, the successor generation, the in-laws, the employees, the management team, etc).

Differentiation relies on boundaries. An individual or sub-system that is well-differentiated is one with healthy boundaries. While functional boundaries may be permeable (i.e. allow for input from others), they are not so open that they are overwhelmed by the opinions, personalities or anxieties of others.

You are a well-differentiated individual if you:

  • Have a clear sense of purpose

  • Can separate your ideas from your emotions 

  • Do not have an excessive need for approval

  • Are able to manage your emotional state, i.e. be responsive, not emotionally reactive

  • Can stay calm and think clearly during a crisis

  • Have well-defined values and principles, which are consistently maintained in word and deed

  • Are a reflective decision-maker; thoughtful in consideration of others without caving to relationship pressures

  • Have the ability to maintain objectivity 

  • Can stay connected and civil even in disagreement 

  • Can make autonomous decisions and accept accountability for results 

  • Balance the rights and responsibilities of self and others

  • Possess the courage to make unpopular decisions for the sake of the greater good of the family and business

A well-differentiated system (or sub-system) is characterized by:

  • Clarity of boundaries, agreements (e.g. shareholder agreements), consequences, roles, authorities, goals, mission/vision and ownership of assets

  • Maintaining boundaries flexible enough to allow for the inflow of information, ideas, skills, etc.

  • The ability to be independent and stay connected to the rest of the system (communication processes, clarity of information flow)

  • High trust/low anxiety/open communication and sharing of knowledge, creativity and appropriate level of risk

  • An awareness of and adaptation to the environment (e.g. anticipating marketplace/outside forces) 

  • The ability to incorporate increasing complexity and internal specialization in response to organizational growth

The process of development of individuals progresses from undifferentiated to differentiated. As we mature, we move from being part of our mothers, to dependent upon our mothers and families, to being able to be more independent and ultimately, interdependent. Given adequate support, individuals can become better “differentiated.”

Similarly, business systems typically emerge from the mind of a creator (think entrepreneur) and as it grows, it can become more differentiated with effective structure, clearer organizational boundaries, job descriptions, etc. We see these kinds of processes in families, businesses, trusts and partnerships. Understanding the concept of differentiation helps us grasp the complexity of family businesses and provides a foundation for facilitating their growth.

The work of the Aspen Family Business Group is about helping families to learn how to become better differentiated through:

  • Clarification of individual, family and business purpose

  • Identification of core values

  • Creation of organizational structures, boundaries and processes

  • Facilitation of communication and constructive conflict resolution

In future columns, we will show you more about how to make your families an asset rather than a liability.

Welcome to the newly defined and designed Aspen Family Business Group Website!

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