““I don’t like the word ‘dynasty,’ but that’s what it is. It’s not just a business. There’s a lot going on in the background.””
Family Business Planning
Two-thirds of U.S. businesses are family-owned. They both benefit and suffer from the complexities of mixing familial bonds and rivalries with profit-driven enterprise. Each decision in a family business is more complicated than in a traditional business because the decision has four possible outcomes: good for the business and bad for the family; good for the family and bad for the business; good for both; or bad for both.
Less than 30% of family businesses survive beyond the founder’s tenure as leader and only eight percent make it to the third generation. Why? Because family dynamics and business dynamics each is extremely complex. The mix of owners, non-owner family members, and the business itself can cube the complexity. That is, if we assign a complexity level of 10 for running a business, then adding family dynamics and ownership dynamics to the equation results in a level of 1,000.
““Tradition is like a bow. The more we stretch the bowstring, the farther we can throw the arrows of modernity and innovation.” ”
The better we can help families make decisions that are best for both the family AND the business, the more likelihood of success and happiness. Doing so requires structures and mechanisms unique to family businesses, including the following:
A Family Council, which includes owner and non-owner family members who establish the vision, values, and ground rules for the business, as well as a dispute resolution process, including confidential mediation options. The Family Council might meet several times in the first year of its existence, but then typically meets only annually.
An independent facilitator or coach, at least as to Family Council meetings and major or controversial matters.
A traditional Board of Directors with at least one independent director (i.e., not an owner, family member, or employee).
A family employment and compensation policy.
A succession plan.
Tax and estate plan and legal documentation.
Buy-sell agreements among owners.
Partners in Thought® family business coaching helps with all of these (with some, like tax and estate planning, in collaboration with your legal and financial professionals), with a balance of behavioral insights, business acumen, independent and ethical coaching, and facilitation tools. Head coach, Jeff Schneider, has been advising and coaching family businesses for 25 years and arbitrating disputes for nearly as long and is primarily responsible for establishing the Partners in Thought® interactive workshop on Family Business Planning.
Family business coaching can involve most, if not all, of the Partners in Thought® client objectives, as well as our branding development, and many of the Partners in Thought® processes applicable to CEOs, executives, and entrepreneurs apply to family businesses, as well. Additionally, not only can we facilitate your family or business meetings and retreats, but in the inevitable case of a family or business dispute, Partners in Thought® dispute resolution support services can facilitate an amicable, confidential, flexible, and efficient resolution.