Welcome to all our valued members. From everyone involved in FABASA we would like to wish you a prosperous and profitable 2012. May this be your best year ever! While browsing the internet the other day, I stumbled upon a wonderful article by Annie Galvin Teich in which she shares ten valuable thoughts which may be just as applicable to your personal life as to your family business.  I would like to share them with you.

Reinventing yourself and your family business

• People don’t do business with companies. They do business with people they like. You can and will be surprised by how much support you’ll find in your personal circle, business colleagues, industry acquaintances and, of course, friends and family.
• It’s all about connections. Your definition of success will morph and change as you meet and learn from others. The opportunities that appear along the way are usually a function of who you know.
• We are stronger than we think we are. When you have passion, conviction and determination, you can bounce back off the mat. Sometimes all it takes is a hot bath, a cup of tea or a nap and you’re ready to go another round.
• People are kinder than we think they are. Don’t make assumptions about people. Sometimes they are just waiting to be asked to help. Be nice.
• You don’t have to imagine your future in detail to create it. Many of us stop ourselves from taking a gamble because we don’t have what we think we need to be successful. It really is okay to move forward without these things as long as you understand that the destination can change.
• Getting up every day to work hard at moving forward creates its own momentum. It is impossible to work 10-12 hours a day for 6 months or 2 years without getting somewhere. You may end up somewhere you didn’t plan, but that is usually okay.
• Friends keep you honest. They know you; they love you; they support you; they pick you up when you’re discouraged; and they keep your ego in check.
• If you think you understand how much work is involved, triple it. Click your heels together three times and repeat after me!
• Backing up to go forward is often a wise thing. Sometimes you find that you’ve gone off on a tangent that, as compelling as it was, is not taking you in the right direction. Part of this new learning is realizing that you are not always going to make the right decisions. As the GPS navigators say, “recalculate.”
• Being able to laugh in general and at yourself in particular is good medicine. This new landscape you’re creating is exhilarating and scary. But you have to keep it in cosmic perspective. Laughter is good for you. Don’t take yourself or your learning moments so seriously that you cannot have a good chuckle. Life is too short.

Lesson 1: Establish Job Descriptions

Clearly defined descriptions are absolutely vital in any business, whether large or small, family run or publicly traded. Carefully thought-out job and well-written descriptions ensure that all aspects of the business are being tended to. Additionally, they help management make better hiring decisions and give employees a roadmap to success.

The lack of clarity in roles can be especially troublesome for senior executives and ultimately can lead to friction and deep rivalry among them. With everyone trying to stake out their own piece of the pie, people will inevitably be vying for the same piece.

Lesson 2: Establish Performance Measures

With no clear job descriptions, there are no clear ways to evaluate an employee’s performance. Take the time to create a measurement tool that you can use to judge each employee’s performance. This is your mechanism for holding people accountable. It will also help resolve any suspect of favoritism from non-family employees.

Lesson 3: Strong Leadership from Non-Family Members is Essential

Many family business owners maintain an open door policy for family members, offering anyone who would like to work for the business a job. These jobs are often management positions. As a result, many business owners are unable to hold family members and non-family members to the same standards and many employees become resentful of what they view as favoritism amongst the family. It is extremely important that some members of the management team be non-family members and that some of the day-to-day decisions fall on their plate.

Lesson 4: Profits First, Family Second

With no job descriptions, no performance measures, and too many family members clamoring for power, it’s easy to see how family tension can mount. In fact, owners can become so consumed with maintaining family accord that the business literally falls apart underneath them.

Every minute of time that is spent dealing with a family-related issue is a minute that could have been spent adding to the bottom line. And during work hours, the bottom line has to come before all else, including personal relationships.

As a manager, you can’t waste down time dealing with the business of family. You want to concentrate on the business of business. You want to concentrate on making a profit.

(Source: American Management Services Inc)

A family business consultant can serve a number of different roles in their work with family businesses of various sizes and stages of development. In my experience working with family businesses over the last twenty plus years, the most important step for a family business consultant is to become a trusted business advisor. Trust is important in all relationships, but in the relationship that exists between a family business consultant and client, trust takes on additional importance. Why? Most importantly, the family business consultant typically is not advising just on business issues, but also regarding a whole series of interpersonal challenges and conflicts that exist between and within generations of the family. In order to be effective in that role, the family business consultant must develop a relationship of credibility and trust with the family members. Without such a relationship, it’s very tough for a family business consultant to add much value, particularly in the realm of the family, which in a family business, in my experience, is usually more than half the game.

It’s important to understand that family businesses are complex. As if the family system and business system were not complex and challenging enough on their own, when you overlay one with the other, complexity goes through the roof. You move from the realm of “just” trying to solve business challenges, to trying to solve them in the context of relationships amongst and between generations of the family business owners. The family business consultant often steps into the proverbial “hornet’s nest,” where the business is experiencing challenges, in no small part brought on by ineffective communications processes and protocols amongst the family members. In such cases, the family business consultant must help all key stakeholders maintain perspective and get everyone “rowing the boat in the same direction”. Sometimes this is more easily said than done, particularly when feelings have been hurt and major philosophical differences exist about where to lead the company and often, who should be doing the leading.

So now that we’ve established a bit of context for the environment in which a family business consultant provides their services, let’s talk about some of the specifics, in terms of the roles and activities the consultant often undertakes. The following list is by no means exhaustive, however, it does provide you with a sense of some of the common areas where a family business consultant has an opportunity to provide value. I have broken the list into four categories: Relationships, Governance, Strategic Planning, and Succession Planning. Some activities can, and often do, fall into multiple categories, but for description purposes they are included in just one category below.

Relationships

• Resolve conflicts between generations and branches of the family
• Resolve conflicts within generations of the family
• Develop a Code of Communication
• Develop policy of who can and cannot work in the business, and under what circumstances, often called Family Member Involvement or Participation Policy
• Help navigate through crisis management, not just at the business level, but very often at the relationship level

Governance

• Assist in development of Mission/Vision/Values Statement
• Develop Board of Directors guidelines, including whether outside board members permitted
• Develop a Conflict of Interest policy
• Define roles of family member shareholders, family council, individual company boards (if a group), and other governance entities
• Develop policy regarding involvement and participation of non-family member executives

Strategic Planning

• Conduct strategic planning and “family meeting” retreats
• Facilitate development and implementation of the strategic plan
• Develop goals and strategic initiatives consistent with Mission/Vision/Values of family
• Ensure system in place for assigning responsibility and monitoring progress toward goals
• Develop advisory board, if necessary and desired, distinct and separate from Board of Directors
• Scenario planning
• Review and assess all growth and exit options

Succession Planning

• Develop a formal Succession Plan
• Ensure appropriate Buy-Sell Agreements are in place
• Coach, train and mentor successor generation family members
• Formulate leadership development and training program
• Develop a leadership succession plan that is fair and sensible

As discussed, this list of family business consultant roles is not all-inclusive. I could tell you some stories about some of the interesting roles we’ve been asked to serve on behalf of family business clients. The bottom line is that trust is everything in a family business environment. As long as a family business consultant is competent, once trust exists, the family business owners will seek the consultant’s assistance with issues from the mundane to the critically important. There’s a comfort level that comes from having a trusted advisor on hand, particularly when you are trying to manage and lead in the often highly-emotionally-charged context of a family business. It creates an environment where the family business consultant can provide an enormous amount of value for the family and the family business system that has been created, and hopefully, nurtured, over time.

THE FAMILY BUSINESS CONSULTANT SHORT LEARNING PROGRAMME

The NMMU Family Business Unit takes great pleasure in announcing that it will be running it’s flag ship short learning programme offering, entitled, “The Family Business Consultant”.

The Family Business Consultant Short Learning Programme is meant for individuals who have been, or who may become part of a family business, or who are already consultants or professionals who will be/are working with clients who own and manage family businesses.

THE FAMILY BUSINESS CONSULTANT