Below is a video we recorded for Axiom’s audience on the subject of setting boundaries within a family business. In this post I want to give you a little more behind the scenes context on this issue and how it shows up in my practice.
A lot of us work with family businesses. This isn’t so much a niche as it is a circumstance of working with small business owners. Here’s what I mean. EVERY small business needs tax compliance services. But once a business is willing to invest several thousand dollars a month in strategic planning and execution their revenues are typically over $2 million.
This is rarified air for business owners. In the two counties where most of our clients reside roughly 85% have fewer than 20 employees. Employees don’t exactly equate to revenues but it is a good gauge for the kind of work we do. Most of our clients are going to have between 20 and 200 employees. By the time you build a business that size you are no longer a spring chicken. Our typical business owner is going to be late 40’s to early 60’s. Most of them have had kids. And it is pretty natural for those kids to get involved in the family business. So by default we work with a lot of family businesses, not because we set out to, but because we can’t get away from this dynamic.
I’m not complaining. I love the family business part of what we do, but it can be a challenge. The younger generation is often given responsibilities at an earlier age than usual. Their lack of business maturity and their willingness to speak out (presumably because they perceive a great deal of job security) make for some lively meetings. Almost every first generation client I have will ask me to help them with their struggles managing the second generation.
The irony is that even though we didn’t set out to specifically help parents work well with their kids what we do with small businesses by focusing on strategic planning and execution is EXACTLY what winds up solving a lot of their challenges. And it does it in a very objective and measurable way. The planning process gets everyone on the same page by explicitly outlining what is important and what is not, from values that will never change to the specific todo items that will determine whether you had a productive week or not. And the execution of that strategic plan is what forges people into great leaders, into servant leaders.s
As baby boomers look to retirement in droves, baby boomer business owners are struggling with succession. It is not surprising that a growing army of business coaches, psychologists, counselors and freelance gurus have dubbed themselves “family business experts.” New prospects often measure our firm against these alternatives when they are looking for help. They want to grow the business, but they also know they have to solve some family issues or things aren’t going to go well. What I tell these prospects may help you as you encounter similar situations.
To the prospect who says, “We really want to get started with you, but first I think we need to go see this counselor who specializes in family business dynamics. THEN we’ll be ready.”
What is the best way to improve a relationship? Is it to sit down and talk about the relationship or is it to work through problems together. Legendary cultures were not formed by sitting around in a circle and talking about everything that is getting in the way of creating a great culture. Think of special forces units like The Green Beret’s or the Navy Seals. Their cultures are formed through shared experience that starts with a grueling vetting process and continues with exacting standards and high levels of accountability. The Johnson and Johnson that exists today was born out of the Tylenol poisoning crisis in the early 1980’s. The esprit de corps at Apple that gave birth to the iPod and later the iPhone found it’s origins in the adversity that saw Steve Jobs summarily dismissed from his own company, then reinstated and charged with turning around an organization on the verge of bankruptcy.
My point is that the best way to build culture and the relationships that form it is to work side by side with someone on something meaningful. There are occasions where sitting face to face and confronting some 800 pound gorilla in the room is necessary. That is called accountability. But if all you ever do is talk ABOUT the relationship you shouldn’t expect breakthrough results.
What I tell my prospects is this: Look, if the counselor does a REALLY good job you will both leave with a precise understanding of what the business means to you, where you are wanting it to go and how you envision your kids helping you get there. You’ll also understand what is important to your kids, where they are most gifted and what they need from you to excel. But then what? Do you know what to do with that information to start making progress, to start running into opportunities to work on the relationship. Or are you going to walk out of your fifth or sixth session with a greater self awareness and absolutely no idea what should happen Monday morning. Let’s kill two birds with one stone and solve these issues in real time, in the real world, accomplishing something that is important to both of you.
What about your clients? Do they see you as someone who can help them grow the business and bring the family closer together?