Tim, a second-generation leader of a family business, recently said to me: “It really bothers me that I have to pay a dividend to my brothers and cousins when they don’t contribute to the success of the business.” His brother, a non-active shareholder and successful dentist in Baltimore, had a different opinion: “I don’t understand why the dividends of this company are so inconsistent. Even when paid, they seem small compared to the large management bonuses paid out to my brother and our cousin.” The implied tension is a classic one facing family businesses with shareholders not actively manag ..read more

“Life is inherently risky. There is only one big risk you should avoid at all costs, and that is the risk of doing nothing.” – Denis Waitley Risk is inherent. We know this. Business is risky, interpersonal, familial relationships are filled with risks, and combining the two creates a unique risk profile with unique challenges. Likewise, we all tend to be somewhat naturally focused on growth - both members of enterprising families and advisors alike. We often come together around the core intentions of growth and development of the business system. This makes sense: growth is the default mindse ..read more

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People often view conflict as negative, but it doesn’t have to be, it can be a constructive tool in achieving alignment. To be sure, conflict is the central challenge for many families, and it can cause a great deal of pain and angst. But, a few shifts in perspective can transform conflict into a source of creativity, positive change, and improved communication. Conflict doesn’t just go away. And, if it sits unaddressed, the underlying issues will wreck relationships in the long term. But changing our relationship with conflict involves a simple change in perspective: the glass half empty to t ..read more

Over the summer I wrote about some of the big-picture things to consider when it comes to the role of in-laws. Following from ,my post on the key questions to ask before going into business with a parent, I wanted to distill the in-law consideration into a similar targeted list of the crucial considerations before hiring an in-law. If this is you, or could be you in the future, consider each of the following points below, paying particular attention to those you find difficult to answer. Why are you considering hiring an in-law? Why do they want to work for you? Are you considering hiring you ..read more

The question of whether to hire in-laws is one that most family business owners contemplate at some point in the life cycle of their firm. Answering this question may result in a simple “yes” or “no” answer, but the more complex consideration for family ownership teams is often the one that follows it. Namely: “How will we manage the influence of our in-laws?” Answering this question requires three key perspectives: the potential employee; the potential shareholder; and the stakeholder in the family firm. The Potential Employee Most of us would agree that highly qualified in-laws can be produc ..read more

In the midst of uncertain economic realities for many, I am hearing more and more young professionals seriously considering the transition into their family’s business. For some, working for their parents wasn’t something they had considered before. For others, it has simply been expedited by a changing job market and shifting values. If you are considering going to work with a parent, I encourage you to think about these 10 questions as a starting point to those discussions. 1. Are they interested in growing?: Is your parent interested in growing, or more interested in maximizing dividend? Do ..read more

Susan had a problem . . . and an opportunity. The exciting news was that she had recently been named to be her father’s successor of their growing second generation family business. The problem, however, was that Susan’s older brother, Frank, had hoped to be the successor. Certainly, as the oldest male in the family, Frank felt a certain degree of entitlement to be the next president. This fact created some tension within the family, but Susan’s father had decided some time ago to form a Board of Advisors to help him manage the leadership succession process. The Board evaluated the capabilitie ..read more

Are you thinking of partnering with your brother or sister-in-law? Before jumping into partnership with your family members, it is absolutely key to think through the parameters of your working agreement. Working with in-laws is no different, and agreements with your brother or sister-in-law requires similar considerations of family dynamics that you would contemplate when working with other direct relatives. Thinking about these questions early will only make the future of your enterprise smoother and more successful. Here is a quick guide of considerations. Clarify the Shared Vision Coming t ..read more

Following our final breakfast seminar of the 2010-11 series, one of the attendees asked, "Should we be up front and out front with customers that we are a family business?" Without knowing anything about your particular family business brand, I would say yes, that you should be promoting the fact that you are a family business. Why? Because your customers care deeply that you are a family business. Many Fortune 500 companies market the fact that are family business. At the end of each add from Johnson Wax we hear the announcer say: “S.C. Johnson, a family company.” Ford motor, Enterprise Car R ..read more