Family Legacy Consultant Group

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The Non-active Family Member in the Family Business
How to Help All Members of the Family Flourish

Grant D Goodvin J.D.

© Grant D Goodvin

In the classic three circle design of the family enterprise system, there usually are members of the family who are not employed by the family business or foundation and who are not owners.  This collection of family members, no lesser part of the family enterprise system, has legitimate perspectives that impact the unity of the family.  These family members are crucial to the family enterprise system; how they are treated and listened to becomes a benchmark of how the family engages in fair processes.
One of the hallmarks of a healthy family in business or in wealth transition is how non-active family members are involved in the family.  The goal is how to help these family members that are non-active in the family business flourish in their chosen pursuits in life.  How to empower all family members in their chosen paths is also a universal goal for the family in business.  This strategy avoids the sense that family members are locked into an exclusive future with the family business or foundation.  Family members whose only goal is remaining in the family business easily become mired in deadly turf battles with other family members.
I often ask younger generation members, “If the family business or foundation wasn’t here, what would you be doing?”  This question is designed to help family members think beyond the business into the realm of increasing their personal marketability.  This process achieves two results:  First, his/her future is not exclusively tied to the family business; and second, adding skill sets and capabilities will help them optimize their roles, whether they are active in the family business or not.
There are several scenarios in which some family members do not participate actively in the family business or foundation.  Some families specifically determine that a limited number of younger generation members will be allowed to be employed by the family business.  Some families elect to require specific educational achievement for participation.  Occasionally families determine that there are incompatibilities among younger generation members that would undermine family unity.  Finally, a younger generation member decides he or she does not want to enter the family business, having elected to pursue another career.  These scenarios can be unifying or destructive.  Regardless, the family in business needs to be aware of the legitimate perspectives of all family members with a view to helping all family members flourish in their chosen fields.
The same scenarios are true in the ownership circle of a family in business or with a foundation.  Family members may function as owners of the business or trustees of the foundation, though they are not employed by either the business or foundation.  Other families elect to not allow ownership unless a family member is employed by the family business.
Each of the above scenarios has its strengths and weaknesses.   Certain families operate from legal documents from previous generations that direct who may be employed by the family business or foundation and who may be an owner or trustee.
I have listed these scenarios alerting families to exercise diligence in how guidelines and legal documents affect family members.  Having previously practiced law for over 10 years, I am fully aware of the difficulty of the best laid legal documents to operate successfully within a family that is not unified in their vision or values.  Regardless of the ironclad nature of these documents, family members who conclude they are not being treated fairly, whether that conclusion is warranted or not, can cause incredible destruction via a lawsuit.  The results of the lawsuit do not reflect the potential of irreparable harm done to the family, the business or the foundation.
One crucial approach for the family is to not give disproportionate attention to the careers of a limited number of family members.  One vision I recommend for a family in business or with a foundation is to desire and work towards the flourishing of all family members.  This does not preclude setting requirements for specific employment in the family enterprise.  If the requirements are clearly stated and available, family members can make the unilateral decision to comply or not.  Regardless of their decisions, the family can take proactive steps to help them in their chosen fields with guidance from family vision and values.
Senior generations are critical to this process.  In utilizing family wisdom and guidance, no family member is permanently tied to employment in the family business.  Often, I speak to family members who believe they have no options.  There are always options.  The senior generation members must lead the family to an optimized conclusion that squelches the emergence of distrust and favoritism within the family.
Families in business should pursue fair processes rather than dictated decisions.  Fair processes treat the legitimate perspective of each family member with respect and dignity.  The results achieved through fair processes provide the best approach to promoting family unity and harmony while allowing each family member to have a measure of control, i.e. doing what they choose to do.
This is an article of encouragement to families who are struggling with discomfort over how to help all family members.  As stated above, even families who believe they are locked in situations in which members who are not actively involved are distrustful have options to redirect the family in a course of harmony.  Keep everlastingly at it.
 

Family Legacy Consultant GroupFamily Legacy Consultant Group
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Narrative and Story in the Family Business
How a Family Narrative Provides Stability for the Present and Structure for the Future

Grant D. Goodvin J.D.

 

© Grant D Goodvin

Most of us think we are self-made individuals, but our narrative includes people, places and time. We can never escape outside influences when we evaluate our lives. This doesn’t mean we are fatally bound to these outside influences. We are, however, shaped by these outside forces in ways we may not always acknowledge.
What is the narrative of your family? Where does it fit within the larger community narrative? The idea of story and history weaves the events of our lives and those of our families and communities, into rich tapestries of beauty. It is important to see ourselves as part of a larger story. How families communicate the narrative through the generations is vital in the family’s self-concept. This explains in part the phenomenal success of the 1970’s TV miniseries “Roots”. We best see ourselves as part of a family, part of a community, rather than as an island isolated from the past with no understanding of how our actions transfer values and vision.
Many times parents/founders/senior generations are concerned about how younger generations will survive the influences of their culture. A relatively recent illustration of this is the generation that encountered the Great Depression followed by World War II. The experiences of that generation greatly impacted their view of work, possessions, family and community. Compare that example to the generation that viewed life through the social unrest of the Viet Nam war era. All generations are compelled to balance irresistible outside forces with values that transcend generational thinking. Generations carry the inevitable concern for future generations: How will younger members acquire an appreciation for work and responsibility, contributing to the narrative of perpetual value?
Academia is beginning to research how family values have traction in management, operations and company responsibilities, not only in privately held family businesses but also in publicly held corporations. Family values are put to the test in publicly held corporations the moment changes occur, be it new personnel, supervisors, or a new CEO. Each person brings his/her narrative to the
table and co-workers invest significant time determining the values that drive relationships and decisions.
A powerful way to guide younger generations as they navigate current views of work, wealth, privilege and responsibility is to help them see their place in the family’s narrative spanning generations and a wide variety of baseline cultural needs. Most articles concerning families in business and wealth transition discuss the failure and destruction of the family, its business and possible dissolution of wealth. The primary aim of this article is to identify how the family heritage in business and wealth transition can be taught and demonstrated in the context of adding value to family, business and wealth. Patterning a dynamic and illustrative narrative of family heritage and family/community building values provides a clear roadmap for future generations.
Shared meals, vacations, discussions and family markers provide distinct conduits of information and, more importantly, perspective on how to interpret the family’s role in life. Founders/senior generation members sometimes struggle with the privilege of control, not converting that control into leadership that teaches rather than dictates. A family narrative helps develop a sense of leading the clan into realms of perpetual stability, competently handling the responsibilities of ownership. Founders/senior generations that tenaciously demonstrate good stewardship continue to write compelling chapters in the family narrative.
Family narratives also help founders/senior generation members attach their identities to the transmission of core values rather than to titles, positions, wealth or business. The narrative emphasizes family wisdom versus family possessions. The evidence and result of greed in government and corporations vividly display how families in business and wealth transition guided by narratives can counteract this destructive force. The narratives inspire and create a passionate desire to bring value to all elements that rub shoulders with the family. Families operating from a narrative-inspired vision infuse their family members, enterprises, co-workers and communities with perpetual values.

Narratives help define and implement legal documents necessary for the continuation of family entities. Without the narrative and the portal it provides, families too often turn to legal technicians to interpret how ownership and stewardship will be managed and implemented. The narrative establishes processes to accommodate legitimate but differing perspectives of family members applied to specific issues and challenges. Processes the family develops are integrated into the narrative as additional evidence of family values and visions superseding individual gains at the expense of destroyed value.
Succession planning sounds sterile and fraught with dangers. Succession planning--in the context of continuing the narrative--places all generations on notice that a vision exceeding all their expectations can occur. The values repeated and refined in the family narrative transform each family member’s fear into the energy required to work toward a common goal. Founders/senior generations lose their fear of giving up identity. Future generations lose their fear of depending on the shifting sands of someone else dictating what will happen. Future generations gain the initiative by welcoming non-family member assessments of skill-sets and performance. These non-family assessments help family members strengthen marketable skills, providing each member with an independent outlook not tied solely to the family enterprise. The family embarks on a courageous journey exploring the options guided by the family narrative.
Narratives also instill gratitude for the opportunities available due to cultural challenges met by previous generations. Thankfulness replaces a demanding spirit and generates hope that in the middle of the arena, when the collective dust of greed, envy and arrogance from all quarters settles, the family will stand together providing a shining light for the family, enterprise and community. Philanthropy built upon the foundation of a family narrative necessitates involvement rather than a mere transfer of funds. Generosity is expanded to adding value because the family, through the guidance of the family narrative, brings opportunities to others.

All of the above mentioned components that interface in family, business and wealth are transferrable to the public corporation. Successful, enduring public corporations integrate narratives demonstrating added value to the services and/or commodities provided to consumers and their communities. Boards governing public corporations begin to act like trustees with true fiduciary responsibilities. CEO’s are provided with an effective barrier to prevent acquiring god-like status. Co-workers are instilled with an expressed acknowledgement of the importance of their contribution toward bringing value to business, customers and community. All associates are reassured that profits are used to strengthen the enterprise in order to survive the inevitable economic challenges of the future.
What is the narrative of your family? Where does it fit within the larger community narrative? What are you contributing to your generation’s chapter? Hopefully, you will start a narrative inventory of your family. Family vision statements combined with family enterprise mission statements and similar documents are crafted as the family practices and communicates perpetual and worthy values. Connecting the soul of the family with the identity of perpetual values and vision builds a pathway to humbly lead future generations, practicing values in business and wealth transition that flourish for the benefit of others.

 

Family Legacy Consultant Group
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Favoritism and Family Businesses

by

Grant D. Goodvin, J.D.

 © Grant D Goodvin

Favoritism has long been a devastating characteristic in families.  In the case of family businesses, the damaging effects of favoritism become magnified.  There needs to be a careful distinction between treating future generations according to legitimate needs differences in a family context versus favoritism resulting in a non-meritorious reward or inequality in a family or business context.  In a parental context, the founder(s) can find themselves being characterized by their children and future generations as showing favorites when they have taken great pains to avoid such a dilemma.  The animosity and guilt arising from such dynamics too frequently find their way into the family business with catastrophic effects.

Traditionally, the favoritism issue manifested itself when 2 or more sons competed for positions in the business.  The founders would be unsure how to define and assign roles that would be viewed as fair.  Further, the founders were faced with a moving definition of fairness depending on which son defined it or, worse, trying to handle the guilt of not knowing whether each son was treated fairly.

Today, the issue has expanded to include daughters and spouses in the equality equation.  Further, our longevity adds to the pressure on the founders because they are faced with treating not only their children, but also grandchildren, with equality.

Finally, the family business risks alienating and losing valued non-family employees if blatant favoritism is displayed in business decisions.

How can families in business deal with the dynamic of favoritism?  Here are 3 suggestions:

  1. Both parents/founders should establish and participate in a specific amount of time devoted only to the family. The business should not be favored over the children especially when the children are young. This presents challenges when the business is struggling to get off the ground. The founders are first and foremost parents regardless of the existence of the family business.
  2. Each child, as a teenager or young adult, can benefit from a non-family member’s analysis of his/her work. This separates the parents/founders from being the only source of affirmation for work-product performance. The question of “What would my children do if we didn’t have the family business?” is a critical exercise to help clarify plans, providing a foundation for success at work for each child that doesn’t depend on the family business.
  3. Focusing only on the outcomes or results of decisions that involve multi-generational participants is generally not sufficient to avoid the emergence of feelings of inequality or favoritism. Outcomes are viewed from each participant's perspective, typically with widely divergent conclusions. A more effective approach is to focus on the process of how the decisions are made and implemented.  If a process is developed with the involvement of relevant parties, the family will view the process as fair and open book. Feelings of favoritism are more likely to be dismantled and replaced with a desire for the decision to be implemented successfully.

Families in business have many opportunities to strengthen family ties.  Those opportunities must be cultivated and cared for to prevent the inevitable growth of favoritism that will choke family unity and the future of the business.  The presence of an experienced family business consultant can help develop the process which constantly and effectively allows a free flow of information among all the family to keep the favoritism wolf at bay.
 

 

 © Family Legacy Consulting Group     (click here for PDF file)

Family Legacy Consultant GroupYour family enterprise, your wealth, your values…

How will they be intentionally cultivated today?
How will they be transferred to your heirs?
 

* Do you have an agreed-upon process to handle the inevitable challenges in your family?

* Do you have a vision of generational transition for your family?

* Is that vision known and shared by family members?

* Are your holiday and family gatherings free from unresolved tension?

* Does everyone in the family understand their current and future roles and accept the requirements of those roles?

Family Legacy Consultant Group can help!

We are:

* Professionals with over 40 years of combined experience in working with families.

* Dedicated to helping families in business/wealth transition and post-transition phases.

* Committed to your privacy and confidentiality as a family

 

A Proven Process for Family Leadership
and Family Identity Development

Family Legacy1by Design

Definition ~ Discovery

A Private Briefing

 
 

Family Legacy2by Design

Cultivation ~ Growth

Resources and Assistance to Continue the Process

 

 

Where does our family start?

Invest in your family with

Family Legacy1by Design

Definition ~ Discovery

A Private Briefing

* Define Legacy – Vision

* Explain how Family Legacy – Vision guides family business/wealth transition

* Identify generational perspectives

* Provide assessment tools for discovery in your family

* Combine family interaction with cutting edge technological processes

* Demonstrate how we help prepare heirs

* Identify Family, Business, Foundation, Wealth issues as appropriate

* Map out action steps

Family Legacy2by Design

Cultivation ~ Growth

* Strengthening Trust and Communication

* Implementing Preparation of Heirs

* Practicing Family Legacy – Vision

* Resolving Family, Business, Foundation, Wealth issues as defined and discovered

* Map out action steps

 

How do I find out more?

Call Family Legacy Consultant Group today. You can start the purposeful effort to lead your family.

316.650.6736

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www.efamilylegacy.com

 

 

 

 

 

 

 

 

Family Legacy Consultant Group

www.efamilylegacy.com

316.650.6736
This email address is being protected from spambots. You need JavaScript enabled to view it.

 (click here for PDF file)

Families in Business in Crisis

How to Proceed

Grant D Goodvin J.D.

How did our family reach this point?

© Grant D Goodvin

Since you selected this link, we assume you are in a crisis.  First, you are not the only family to face the issues that have emerged.  We can state that with 100% certainty.  We encourage you to not allow feelings of discouragement or hopelessness dominate your approach.  Often, a family will go through blame shifting, accusations, secret meetings to try and fend off the undermining of family members' positions and roles.  A family will wonder if they can ever have a productive meeting without the source of the crisis rearing its ugly head.  We tell you with no reservations or hesitation you can.  On a temporary basis, you can observe an immediate change if one of our trained consultants is present at your next meeting.  People will act differently if an outsider is there to observe.  The change is not permanent but it does illustrate that change can begin.

Second, if you are the parents/founders/senior generation, resist the impulse to squelch the raw perspectives and emotions that have emerged by issuing all or nothing edicts in order to create an appearance of peace but does nothing to resolve the source of the problem.

Third, if the reality exists that the family cannot communicate as a group or between individuals, refrain from allowing venues that only serve to repeat the same arguments.  Usually family members repeat themselves at these meetings and listening is reduced to the prerecorded tapes they have created in their minds along with the attachment of suspicious or accusatory motives.

Fourth, call us immediately.  You can click here for our phone number.  We place a high priority on families in a crisis situation.  We can respond quickly and efficiently.  We know how to cut through the rhetoric of family members to clarify the issues at hand.  Many times, fear of judgment or loss of position or loss of income prevents the family from allowing an outsider view the rawness of the conflict the family faces.  We can help your family regain your footing.

We repeat what we stated at the beginning:  your family is not the only family to face the issues that have emerged.  You are not alone.  Let us help.

Parents-Founders/Senior Generation
How you can lead your family into processes that strengthens each member
Read More (click here)
Younger Generation - Heirs
How do you overcome the frustration that you are not in control of your life
Read More (click here)
Are you experiencing a crisis in your family business
How can we overcome being in constant crisis management in our family
Read More (click here)