Putting family issues on the table
From the Kitchen Table to the Conference Table: Family Business Communication
By Laura Michaud
Cameo Publications,
Hilton Head Island, S.C., 2004
117 pp., $17.95
Reviewed by Barbara Spector
Family compensation, estate planning, succession, job responsibilities—whatever your family members think they’re arguing about, the root of the conflict actually is a failure to communicate, contends Laura Michaud, author of From the Kitchen Table to the Conference Table. “Regardless of the issue or challenge,” she writes, “whether it’s large and overwhelming … or small and manageable, as all family businesses routinely face, you can resolve the issue and move on, provided that you have communication in place.”
Michaud, an Elmhurst, Ill.-based family business consultant, was a third-generation owner of Beltone Electronics, a hearing aid company that her family sold in 1997. “I’ve used each of the communication techniques in this book myself,” she writes, “and have taught them to my clients with great success.”
Michaud has tailored her advice to owners of small to medium-sized companies. “It is a book that you can read during a weekend,” she writes, “so you can face Monday morning with real-life, workable, put-to-use strategies that won’t take a lot of effort yet will yield great results.”
If you aren’t familiar with personality assessments, the book may offer valuable insights into your own behavior and how your messages are received by family members and other colleagues.
Michaud devotes nearly half the book to a discussion of personality types. She presents a “family business behavioral style assessment,” which is adapted from the DiSC Personal Profile System, a tool commonly used by executive coaches. Readers complete a series of questions to determine their preferences in areas such as role in a meeting, conflict management, delegation style, risk analysis and negotiation. Total scores enable readers to categorize themselves as “drivers,” “impellers,” “careful ones” or “stabilizers.” Knowing which category best describes you and your relatives will enable you to adapt your communication strategy to the personality style of your intended recipient, Michaud contends.
Michaud’s chapter on family meetings will likely be too elementary for families with a governance structure already in place but helpful for those who are just beginning to convene meetings of directors, shareholders or family council members. She explains what she does when engaged by a family to moderate or facilitate a meeting.
The book includes exercises to help readers relate Michaud’s discussions to their own experiences. “The real secret to family business success,” she writes, “is being able to communicate effectively with anyone at any time.”
Home sweet logo
Of course, your company has a logo. But does your family? Use of a family logo on notices of family council meetings or family reunions can help rally your relatives.
A portrait of your family’s ancestral home can be a compelling family logo, notes Houston artist Jean Steinhardt. Here are some suggestions from Steinhardt on how to use the image:
• Put the logo on all correspondence leading up to the event, including reminder notices, invitations and planning memos.
• Post the image on a family website.
• Plan to present the original artwork to an honored relative.
• Print the logo on souvenirs like mugs, T-shirts or greeting cards.
A house portrait can also be used as your company logo to emphasize that it’s a family business. For more information, see www.jeansteinhardt.com.
Revise your policies to stress professionalism
Family business owners who grant themselves special privileges can undermine their company’s success, not to mention their non-family employees’ morale. Here are ten tips on running a professional operation, offered by Mark Goulston, M.D., a Los Angeles executive coach and team-building specialist who works with mid-market and larger family businesses. Goulston, a member of the Alliance for Strategic Leadership, is the author of Get Out of Your Own Way: Overcoming Self-Defeating Behavior (Perigee, 1996).
1. Work harder than non-family employees. Set a good example. Come in earlier than your staff members, stay later and pay more attention to the quality and quantity of your work.
2. Think of the company’s needs before your own. Don’t do anything you couldn’t get away with doing in a publicly owned corporation.
3. Don’t bad-mouth the company or family to outsiders. Your employees will react in the same way children do when they hear their parents argue: They’ll feel insecure, and you’ll lose credibility as a manager.
4. Hold your family members accountable—and follow through.
5. When delegating, match authority with responsibility. Make sure your staff understands that they must follow all directions given to them by non-family managers.
6. Make your job easy to understand so others can do it in your absence. Don’t assume your employees know what you do each day. Check to see that they understand by asking them questions and listening to their responses.
7. Move aside when your security needs conflict with the company’s growth needs and when fear clouds your vision. As people get older, they become more risk-averse—but taking the occasional risk is essential for a thriving business. If you wait too long to retire, you’ll give your competition an open invitation to surpass you.
8. Remove deadwood early. Don’t be afraid to remove underperforming relatives. If it’s true that 10% of your employees give you 90% of your headaches, magnify that factor several-fold when you are dealing with a recalcitrant and incompetent family member.
9. Go out of your way to demonstrate to your customers and employees that family members do not receive more than they deserve at your company.
10. Heed your advisers’ suggestions, or replace them with new consultants whom you will listen to and respect. Make sure your advisers give you objective input; don’t just hire consultants who will tell you what they think you want to hear.
For more information, contact Goulston at mgoulston@a4sl.com.
Planning for emergencies
Does your family company have a contingency and recovery plan to manage operations in a crisis? Continuity planning is essential in any organization, especially in tumultuous political and economic times, notes Jeffrey S. Davis, chairman and founder of Mage LLC, a family business consulting company in Needham, Mass.
Davis cites statistics from the National Fire Prevention Agency reporting that 43% of companies never reopen after a disaster and 29% close within three years of the event. He suggests taking the following steps to prepare your company for disaster or downtime:
People:
• Create a call list of all key employees, customers, vendors, distributors, utility providers and emergency service providers.
• Appoint an emergency response team that includes key employees from each unit.
• Develop a call tree or other notification procedures for your emergency response team, company managers and all other employees.
• Create an awareness program to teach employees what to do in an emergency.
Processes:
• Document all critical and time-sensitive business processes and ensure that there is a primary and secondary person in charge of them. Have a manual process as a backup for operations involving technology.
• Create an emergency response manual that highlights evacuation and succession procedures as well as where to turn for help, including state, local and federal agencies.
• Establish an alternative operating location that can be used if the primary site is inaccessible. Consider creating an alternative information technology (IT) operating location, as well.
• Identify alternative vendors in case your primary suppliers can’t perform.
• Store inventory at more than one location.
Technology:
• Identify all critical IT resources required to keep important business processes running.
• Identify disruption impact and allowable downtime.
• Develop and document recovery priorities and sequence.
• Identify preventative controls to minimize outages. These should include uninterruptible power supplies and backup power generators.
• Create a comprehensive backup plan. Machines that store key documents should be backed up regularly.
For more information, see www.mageusa.com.
Personal disaster planning: Appraise your valuables
Few sections of the U.S. escape weather disasters. Wildfires hit the West, tornadoes touch down in Central states and the East Coast battles coastal hurricanes and residual flooding. Plans for a weather emergency should include having your valuables appraised and appropriately insured in addition to battening down the hatches, the American Society of Appraisers urges. Too often, hurricane and flood victims discover that memories and photos of cherished objects — jewelry, family heirlooms, artwork, silverware, china, antiques and collectibles — aren’t enough to satisfy insurance companies, according to Ted Baker, ASA’s executive vice president.
Here are some tips from ASA on obtaining an independent and credible appraisal:
• Hire an independent appraiser with no stake in the outcome of the valuation. Avoid conflicts by staying away from appraisers who express interest in buying or selling your property.
• Allow approximately four to six weeks for completion of a professional appraisal. Accurate appraisals involve an initial inspection visit followed by extensive outside research.
• Look for an accredited appraiser. ASA accreditation involves years of testing, training and peer review, according to the society.
For more information, see www.appraisers.org.