WHY HAVE FAMILY MEETINGS?
Succession planning for family businesses remains challenging for many reasons: the relationships between family members are complex, emotions run high, ownership is concentrated, non-economic family values conflict with traditional capitalistic business values, the strategies pursued are often unconventional, and it can be both financially and emotionally difficult to exit from an ownership position.
To overcome the inherent challenges of succession planning, there are many things families need to do to ensure the transition is a success, but the top-3 that I wish to highlight are the importance of:
1) Regular Family Meetings
2) Formalized Strategic Planning
3) Board of Directors with Independent Members
This article will focus on the first of the top three points above: family meetings. Why? Because mutual collaboration among the family ownership group is critical to the welfare of the business. Without a foundation of strong family alignment, strategic planning becomes nearly impossible if family members have competing visions, which would leave a group of independent board members confused over what direction the family wishes to take their business.
There are many benefits to family meetings, but among them is the ability to combat the "dark side issues” prevalent in many family businesses. Things like exclusion/secrecy behaviour, divide and conquer mentalities, and false assumptions as a result of information learned “through the grapevine” can be avoided by ensuring there is a forum for regular, open and honest communication involving the entire family, and where all members have a voice. When there is a transparent process in place for family meetings confusion and chaos within the family enterprise is reduced, and procrastination is overcome, resulting in family members that are engaged because they have “bought-in” to the vision they’ve had input in constructing (and will implement together).
WHAT ARE FAMILY MEETINGS, HOW DO THEY WORK AND WHAT COULD I EXPECT?
Family meetings involve gathering all members of the family, whether active in the business or not, at an off-site meeting place where the ground is neutral and where no underlying power structures are present (i.e.: not in the company’s boardroom, or in the patriarch/matriarch’s home). An agenda is prepared and distributed in advance, and the meeting is best facilitated by someone the entire family knows well and trusts. Meetings typically last 3-5 hours.
Activities at family meetings are designed to range from being educational to building stronger relationships and increasing trust. The purpose of family meetings is to get members talking and listening to each other. It is here that cellphones remain off while everyone gathers to share stories, helping younger generations to learn about their family's history, understand how the business was started, learn about some of the obstacles that previous generations needed to overcome (or obstacles that the current generation still needs to overcome!) and the work that went in to keeping the family ties strong, so the business could grow to what it is today. Often, stories of “what went wrong” and “we want to be sure this never happens in our family” are shared and discussed openly with all generations present. These types of conversations are what lead to shared family values, and an open dialogue on family members’ goals, ideas and perspectives, which helps to build the plan for the future, while simultaneously educating future leaders and building their capacity to make good decisions when their time comes in the future.
WHEN IS THE RIGHT TIME TO INTRODUCE FAMILY MEETINGS?
All too often, succession planning falls into the category the late Steven Covey referred to as “important, but not urgent”. Given the importance of open communication and transparent decision making to the succession planning process, the best time to start was yesterday, making an immediate start the next best thing. They key is to begin the process so that there is open communication and the process is transparent before critical and emotionally volatile decisions are made.
If you wish to learn more about conducting effective family meetings, I highly recommend an article titled “The Ins and Outs of Family Meetings”, written by John L. Ward, Co-Founder of the Family Business Consulting Group http://www.thefbcg.com/The-Ins-and-Outs-of-Family-Meetings/?CategoryId=286, since it provides examples of how to integrate family members that have historically been from the “IN group” and the “OUT group". I would also welcome the opportunity to connect with you directly by phone (204-515-6023) or via email (email@example.com).