The Growth Team

06/08/2020

The Passage In-Between

Below is the letter I sent to my graduating seniors at Baruch College’s Zicklin School of Business in New York City, where I’ve taught Family Business Management and Entrepreneurship for the past 10 years.

As I was acknowledging the students' accomplishments and, upon graduation, their facing a transition into the unknown, I thought of parallels to family businesses I have known. They too managed transitions. Both the graduating students and the family businesses have come to that place where one door closes and another has yet to open. For the family business, this is where the parent, as the incumbent generation, and the adult child, as the rising generation, reflect on past accomplishments and encounter a sense of an uncertain future.

For family businesses, these are times of opposing life stages, where the parent’s tolerance for risk decreases and the child’s desire to bring change increases. Here the parent is transitioning from 'doing' the work of the business to being a 'memory holder.' At the same time, the child is transitioning from a supportive role to one of leadership — to being held accountable for the future of the business, the family, and the positive continuation of their legacy. As the transition occurs, there opens an 'in-between passage' wherein the role changes are not yet recognized or feel correct. This is a 'liminal space'—a place of both uncertainty and opportunity.

Here is my letter to my graduating class:

Congratulations to those of you graduating.

I expect when you first started college, you could not envision how your graduation would be. You may have had, upon starting college, a feeling of entering unknown territory – a liminal space – an in-between place where one door has closed and before another opens.

Then over time and after hard work, you settled in, moving forward and upward in seniority among college students. Suddenly the time has come, and another liminal space appears.

2020 continues to be a year unlike any other any of us have experienced prior. Anticipations and expectations evaporated in front of our eyes, replaced with ambiguities, uncertainties, and even, perhaps, chaos. And the year is not over yet.

As entrepreneurs, we need to be able to accept the ambiguity within liminal space. It is the space where normal and familiar activities cease. It is the threshold if not substance upon which creativity and innovation thrive.

Trite as it is, the future is yours. And remember; as you embark on your new 'you,' you may fail at times. It’s what we do. Remember then the imperative truism of entrepreneurship — that the creative process succeeds for those willing to fail fast and fail often, for creativity is a cyclical and spiral process that can require constant re-invention. If there is any lesson to take away, this may be it.

04/27/2020

Shifting Sands

I’m now going into my second month of ‘sequestering,’ a term I like better than ‘staying-at-home,’ or ‘social distancing’ (a misnomer because my social interaction has zoomed along with Zoom).

Thinking through topics for this week’s blog I settled on the quality of empathy among leaders in times of uncertainty and stress. Writers on business leadership in times of crisis call attention to their being proactive, keeping their team members safe, and providing them the same amenities they want for themselves: the ability to work remotely and the tools to do so. They also stress the importance of communication and transparency regarding plans for employee lay-offs.

The stressors in family businesses are more complex. They are the products of the interconnection and interplay among the family, the business and the equity members—their conflicting needs and demands. Essentially there are three teams that need taking care of instead of one. Here, honest communication is key. It’s important to clearly share among all concerned what you know; what you don’t know; what actions are being considered, and decisions as to which will be implemented. And it’s particularly important these days to communicate with an emphasis on empathy.

Our understanding of COVID-19 is changing daily. We continue to travel into uncertain terrain, trying to figure it out as we go. In my conversations with family businesses undergoing stress in these unprecedented times I have reminded them of their shared values and asked that they exercise empathy. I advise them to give each other slack—so as to remain balanced—as they travel together in our present landscape of shifting sands.

04/14/2020

COVID-19: Responding to the waiting game

As the COVID-19 pandemic sweeps across the world and America, I’ve felt that I could not post a blog without addressing this unprecedented-in-our lifetime pandemic.

While waiting to see how the coronavirus pandemic and sheltering-in-place will play out, and grappling with my own anxiety and uncertainty, I paused my blog and newsletter for a while. I wanted to prepare a response that’s reflective of my own experience; and not to offer an interpretation of the information that’s changing as a fast as it’s being presented.

Professionally I’m a resource and advocate for family businesses. I teach best-management practices of multi-generational family enterprises; work with family members on improving family dynamics; advise on business growth and entrepreneurial leadership. Personally, I’m a husband; father; believer in higher purpose in our lives.

In my virtual-video conversations with clients I see people grappling with uncertainty, yet plowing ahead. And I see others for whom the pandemic is overwhelming, if not paralyzing. I understand both reactions.

Settling into our new reality, my internal strategy for maintaining a practical, emotional grip on the situation has become, “I can do only what I have control of: washing hands, social distancing, and doing all I can to keep my family safe and healthy.”

As I write this, there appears to be a glimmer of light. The number of new cases is stabilizing in major cities around the world. Still there remain precautionary statements that the disease might return. We should not let our guard down too soon.

I’m grateful to and appreciative of the many first responders and healthcare providers who continue to put their lives on the line for us. And I appreciate and support those businesses that provide essential goods and services we all need to in order to survive.

We are all human. We are all striving to keep our families safe, sane and healthy. I am striving to remember all the lessons I’m being taught by this pandemic. An axiom pertaining to family businesses transitions comes to mind: “respect the past and keep an eye on the future.”

11/26/2019

Understanding Values, Vision and Mission In Family Business



Many businesses write their vision and mission statement so they read similarly, just with different words. This shows a lack of understanding of these two important guiding business principles. They may also be missing a clear statement of their values; the bedrock upon which a sustainable business is built. Once clearly articulated a vision and mission statement can be crafted.

It's important to make distinction between a vision and a mission. I hold that values are what’s fundamentally important — to an individual, a family, and as an extension, to their business. A vision is what the family aspires to build. Mission is a statement of how the family and the business will impact and share with the larger community. Together they clarify intention and facilitate trust within the family, leading to profitability and success across generations.

Remember Joan of Arc’s famous battle cry: “free France” (libérer la France). She states her mission as an action. The action is the fulfillment of her vision, “a free France.” Her driving value: freedom. Built on these, her strategy was to enroll the farmers. Her tactic, to cut the British supply lines. She succeeded because her mission was larger than herself.

One way to understand the larger purpose of your business' mission is to ask yourself whether you would share it with your stakeholders (i.e. employees, client, customers, the public, etc.)

As an illustration: A bodega owner selling foods from his home country within his New York community stated his mission was to open two more stores. Asked if he would put that on the wall behind the check-out register, he demurred. He realized that more stores in and of themselves would not add value to his customers' lives.

After considering the distinction he recognized that his mission, larger-than-himself, was to provide his New York community with the foods they remembered and enjoyed in their home country. In making the distinction he was enrolling his customers in his mission.

11/04/2019

Generosity And Connection

Sitting down to write today’s blog piece I was thinking about several concepts related to family business. Among these, the difficulty of choosing the right successor, the significance of shared family values, the importance of stewardship (the passing on of family assets—wealth, reputation, emotional well-being, spirituality—in better condition than when you received them.)

As I do at times, I turned to others for ideas. In this case I found what I was looking for in a blog by Seth Godin.

Godin’s article Bread and Book, is not intended to be a comment on family businesses. But it’s one of the best—and more tragic—stories I’ve seen of succession, family values and stewardship https://seths.blog/2019/10/bread-and-books/. It’s a story of world-famous baker Lionel Poilâne and how Godin and Poilâne met and became friends.

Describing what he learned from his time with Poilâne, Godin wrote: “Ideas, bread and books are all the same–they’re better when they’re shared. The posture of generosity and connection replaces a mindset of scarcity, and Lionel modeled this philosophy every day.” From his friendship with Poilâne Godin learned about the magical intersection between generosity and idiosyncrasy.

Tragically, Lionel Poilâne and his wife were killed in a helicopter crash, leaving behind two teenage daughters. It’s here that the story enters the realm of family business.

The elder daughter, Apollonia, immediately stepped up and took over the running of the bakery. She’s made a success of it, with no diminution of quality. And she’s recently published a book.

In Poilâne: The Secrets of the World-Famous Bread Bakery, Apollonia relates her family’s story. It begins with her grandfather and now flows to the fourth generation. She writes: “The seeds of this book were planted by my father and mother in my sister and me. They are seeds of passion, determination, and love for our craft. My sister, Athena, helped me germinate those seeds, and with the birth of her son, we now have another generation with whom to share our family story.”

Family values, succession, stewardship. It’s all there for the learning.

Twenty years ago, I met the most famous baker in the world. I was in Paris for a speech, and visited Poilane, a bakery much smaller than its reputation would lead you to believe. I was hoping to ta…

01/29/2019

Competition—It's Not All Win-Lose

Competition between siblings can be one of the fiercest dynamics in a family business. Unbridled competition between parents and children can be one of most devastating. But seen from a constructive point of view, inter-family competition can be one of the greatest advantages of family business.

I have been bewildered by stories of cultures that play games in which no one wins. I am equally perplexed by the attitudes of those who see winning or losing as a measure of their prowess and superiority over others.

I like to compete as much as anyone else, and thus found myself in a self-imposed paradox until I considered a perspective of competition that supports winning by all the parties involved. Consider tennis players who appreciate playing against skilled opponents. Both players win by testing themselves and by learning from each other’s game. Don’t get me wrong, I’m not opposed to sports events declaring a winner, rather I recede from intentions of proving inherent superiority by winning.

In family business, I imagine a scenario similar to a sporting activity involving an older and younger sibling. The older, more skilled and stronger, can easily beat the younger in a way that demonstrates superiority, and plays to win accordingly. In a win-win scenario the older sibling derives gratification when the younger achieves increased ability and skill, even to the point where the younger often comes out the victor. Inside the family, strength has been added to strength. By the same token, when a child becomes able to perform a task better than their parent, the parent recognizes a job well done. The family wins too, because new capability has been added.

Family businesses can benefit by understanding that internal competition is not all win-lose. They can learn much by watching its outcomes, becoming aware of the growing strengths within the family that competition showcases.

01/14/2019

Family Business And Organizational Culture

The Questions Every Entrepreneur Must Answer, by Amar Bhide, published in the December 1996 issue of Harvard Business Review is one of my perennial favorite articles to use in teaching my class on entrepreneurism at Baruch College, City University of New York.
Rereading the article recently, several thoughts came to mind as being significant when reframed in the context of family enterprises.

Speaking of entrepreneurs the author writes: “To secure the resources demanded by an ambitious strategy, they must manage the perceptions of the resource providers: potential customers, employees, and investors.” Further into the article he adds that “… the entrepreneur must design the organization’s structure and system, and mold its culture and character.” and that “When entrepreneurs neglect to articulate organizational norms..., their organizations develop a culture by chance rather than by design.”

Successful multi-generational family businesses come about more by design than by chance. Considering the article in this context one might view the founder or current head of the family business as ‘the entrepreneur.’ And continuing the simile, family members might be viewed as resources—for the family or the business or both, and managed accordingly. The perceptions of family members have impact regardless of their roles in the business. They help to articulate and establish organizational norms. When these are appreciated and employed as a resource to be developed, a culture arises by choice from within the family.

The perceptions of stakeholders are not the only issue the head of a family business should be alert to, but it is important one when seeking to create a multi-generational legacy.

10/09/2018

What’s Important At Thanksgiving Dinner

I recently had a conversation with a potential client that would eventually involve her husband, elderly parents and two siblings. The issue, as brought to me, involved transitioning the management of the family business from her parents to her husband. I learned that among the family members there are differing thoughts regarding the value of the business. There is also some resentment about her husband’s ambitions for the business. Moreover, her two siblings believe that their sister and her husband are taking advantage of their parents.

This situation is complex, yet not unheard of. In the course of our conversation we discussed how developing a clear statement of individual and family values will lay important groundwork for its resolution. We spoke as well of the importance of educating the family members about the systems that underpin the workings of family businesses, and helping them understand best practices employed by successful multi-generational family businesses. Most important though, in our conversation, was the question of how to convince the family members to undertake this education with the help of an outside advisor.

What is fundamentally important here? I suggest it’s family harmony. Will this family be able to sit down together for Thanksgiving dinner next year and enjoy the company of everyone there? If not, the business and everything and everyone associated with it are left in peril.

If you are concerned about the harmony in your family business and the fate of future Thanksgiving dinners, email me at [email protected] or call 212-777-0083 for a conversation.

07/30/2018

Defining Productivity For Family Business

In a recent blog post, entitled Business/busyness https://seths.blog/2018/07/busyness/ Seth Godin states that what matters in business is the question: “did I spend my day producing enough benefit for all the time invested?”

Seth is asking an important question; I recommend that you read the entire blog post.

Further into the post he provides a suggestion for answering the question: “Once you know what you seek to produce (not an easy task), add up all the time you spent to create it.” While not exactly what he was writing about, I fixed-on the phrase “once you know what you seek to produce” and related it to family enterprises.

It is not uncommon for a family business to come about accidentally. One starts a business, gets married; has children. The children help out and eventually assume control of the business. If things go well the business grows and the second generation passes it on to their children, likely in the same way they received it. They in turn assume responsibilities and eventually control the business.

In this scenario the business is looked at in present time, and productivity is largely measured in the context of the business’ balance sheet. Family is important; but as an entity separate from the business itself. There is not yet generational thinking and recognition of a family-business legacy.

With each generation as they grow, family businesses become more complex. The simple mechanism of succession described above no longer works. For the business to continue now requires planning. It requires a longer view; an intention to produce a multi-generational family enterprise. “…once you know what you seek to produce” is key. Intention aligns family members, resources and practices in the direction of a shared goal.

Our time is worth something. Too often, though, we’re guilty of spending it foolishly or out of habit, or without intention… despite our lousy track record, though, it is possible to sp…

07/16/2018

Family Meetings—Rules Of Communication
In recent blog/newsletter pieces I wrote about the importance of a specific type of family meeting whose agenda is to discuss the family itself in the context of the business, but not business management or operations. Subsequently I was asked what important actions could help these meetings succeed. At the top of my list: Establish rules of communication.

In his blog piece Rules of Communication in Family Meetings, Dana Telford of the Family Business Consulting Group wrote about an experience with a family he was working with. He had asked them to suggest some actions they would take, as part of their family meetings, to ensure everybody is listening and being heard, and that meetings will be productive.

Telford includes the list of rules the family developed and adopted:
• No interruptions
• Be honest but respectful
• Seek first to understand
• Everyone has a responsibility
• Set an agenda and stick to it
• Set time limit for topics in debate
• Anyone can call a timeout
• All are equal
• Everyone is included
• The rules rule
• Notes will be kept by the secretary”[1]

Rules may differ for different families, but having established rules of communication undoubtedly “can save a family meeting from falling apart and becoming a wasted, frustrating use of time and energy.”[2]

These same rules when carried over into all family communications will support the long-term success of both the family and the business.

1] Dana Telford, Rules of Communication in Family Meetings. The Family Business Consulting Group. May 14, 2015
[2] Ibid.

07/02/2018

Fear Of Formal Family Face Time

Although the critical importance of bringing the family together for structured meetings is universally acknowledged, the idea of holding these meetings may meet with resistance among family members. Their resistance is largely based on unfounded fears.

Family members may believe that the current communication within the family is good enough. They may fear that structured meetings will stifle the informal spontaneity with which the family currently addresses issues. Some may share the misapprehension that structured meetings will provide fertile ground for difficult topics to find their way to the surface and cause harm.

Another common concern is that the democratic spirit inherent in family meetings may seem unsuitable given the natural inequality of parents and children, or the hierarchical inequality of ownership, management and staff. Some may fear that the open nature of the meetings may lead some to push to democratize the business’ management. In fact, however, family meetings in no way negate the prerogatives of ownership, leadership and experience.

It will benefit family members to address these fears and work through them. Structured family meetings have a proven record of positive outcomes that strengthen both the family and the business. The example of multi-generational family businesses worldwide proves that formal family face time is not to be feared but embraced.

06/20/2018

The “Why” Of Family-Business Meetings

Successful multi-generational family businesses recognize that family meetings are critically important to their longevity.

Family meetings create time and space for family members to discuss the family in the context of the business. In these meetings operational and management issues are not on the table. Conversations here are about issues like criteria for participation in the family business; sharing values; meeting challenges; resolving conflicts. The result: a stronger family, and thereby a stronger business.

There’s no one-size-fits-all when it comes to family meetings, but family members coming together on a regular basis ensures open lines of communication. Open communication in turn helps avoid the characteristic pitfalls that await so many family-owned businesses, threatening their survival.