High Performance Business Family Teams
PDF VersionTable of Contents
- Business Family Shared Future
- Creating the High Performance Family Company
- Teamwork the Key to Long-Term Success
- Team Building in the Family Firm
- The Family Team Effectiveness Critique
- Personal Values Exercise
- What It Takes To Make A Family Team
- Exercise
- Late Night Thoughts: on Work, Role and Delegation
- A Comparison of Professional and Entrepreneurial Management
- About the Author
Business Family Shared Future
Creating the High Performance Family Company
General Comments
The fundamental premise underlying The High Performance Family Company is competence - family employees possess the ability and the desire to do what needs to be done - that is, the necessary talents and motivations for productive effort. They bring this basic human competence with them every day and will use it in their work to the extent that the organizational conditions permit its expression. The right organizational environment, therefore, is critical to individual and collective potential being expressed in a productive way. Competence will only become the norm in the family owned entrepreneurial business if conditions that encourage collaboration, commitment and creativity are allowed to flourish.
Conditions in support of collaboration ensure the involvement of people in making work-related decisions. Policies and authority relationships that reflect a belief in employee capabilities and respect for their desire to contribute lay the foundation for management and co-workers to join together in a collaborative effort. A support structure for involvement ensures access of people to the problems of work, as well as to one another, needed resources, policy supports and the solution itself, thus putting "teeth" in the invitation to collaborate. Finally, trustworthy and credible management, by family, owners and other key individuals alike, verifies the collaborative intent. The result is more resources for addressing problems and a sense of shared ownership and partnership among the people involved, especially in inter-generational, sibling and sibling-cousin/family work relationships.
Conditions in support of commitment empower people to act on their best judgements at the point of impact - where the work is being done. Meaningful work is emphasized and the relevance of people's efforts to both organizational and personal goals is well established. Teamwork and a sense of community are stressed as cultural norms. The result is widespread commitment to and coordinated effort for the organization.
Conditions in support of creativity free people to look for better ways of doing their work. The task environment is designed to facilitate rather than obstruct productive effort. Norms governing social relationships encourage candour, spontaneity and even fun in the workplace. In addition, creative problem solving processes, not precedence and conformity with the status quo, are rewarded. The result is a free-flowing, freethinking approach to work and the creative solution of perennial and costly problems.
Collaboration triggers competence. Commitment supplies the energy. Creativity ensures an outlet for people's innovative and ingenious talents to be expressed in their performance. The only caveat is that workers have little control over such conditions. The owners of the business, therefore, determine organizational productivity because they create, or fail to create, the environmental support conditions for productivity. With a strategic and sustaining management system and process in place, a performance-based reward system, such as the institution of profit sharing or an ESOP (employee stock ownership plan), becomes part of the organizational shift to a more productive and participative work environment where, to use the term [read: jargon] familiar to us, everyone acts like an owner.
The High Performance Plan
Essentially, based on your long-term corporate initiatives, you would perform a management talent assessment and then develop a learning program to support the organizational changes that are part of the new company culture. The learning sessions would be divided into inter-related segments. The first of these would provide for improvements in the area of communications. You would then proceed to the leadership skills area and the clarification of roles. From the information gathered through these first three phases, you would design a strategic and sustaining management system and process and ultimately a performance management system.
Teamwork the Key to Long-Term Success
Teams are often a foreign concept in family businesses. After all, founders usually do whatever they please and the next generation learns at their feet.
Basically, the question of leadership differentiates business family teams from generic ones. Who will be the leader and can the others truly be followers?
In some situations feelings that go back to early childhood can make team play virtually impossible. Collaboration carries implications of consorting with the enemy. In these situations, it's difficult to learn new habits.
But in families that work well together, collaboration may almost seem to be psychic. In cases where the family has had to learn to work as a team, it's always necessary to first put aside rivalries and labels.
Team play doesn't require everyone to like each other, only that they get their job done reliably, while respecting the contribution and dignity of others.
Successful family teams share certain common characteristics:
- A shared future, creed or mission statement. To work as a team, the family needs a shared ambition. Set up a family meeting to discuss values, goals and objectives that are clear and mutually agreeable. This discussion works best with an agenda and an outside facilitator.
- Open flow of ideas. In companies that act like teams, members of the upcoming generation must feel that their opinions are heard.
- Means for expressing and resolving conflict. Families in business together often avoid openly discussing differences. This natural fear of discord is where family and business issues get entangled, since attempts to evade business conflicts usually produce the very discord they sought to avoid.
- Shared leadership. The founder - or controlling generation - must be prepared to transfer authority for different aspects of the business to the next generation. The founder must also be prepared to train the children in the operational, financial and legal aspects of the business.
- Formal systems. Founders seldom stop long enough to recognize that they are running a company from scraps of paper in their pocket or purse. They resist formal systems, partly because they have found success without it.
But others cannot learn solely by a process of osmosis. Unless the founder and the family lay out an organization and structure, no one else can act with certainty or exercise any measure of control. A formal structure can provide mechanisms for conflict resolution, shared leadership and transition from one generation to the next. - Communications. Sometimes, openness and honesty between family members are less important than maintaining harmony. It is possible to maintain family harmony while being open and honest, but if the family has never communicated this way, it is likely to lead to hostilities.
For parents, talking things through with their children in a way that separates the person and the issue is good practice for the business world. Siblings and cousins also need to realize that a lack of true communication has an impact on the business - everyone should at least get an equal opportunity to participate in discussions. - Problem-solving and decision-making systems. Families in business need to agree on an approach to solving problems and making decisions that leaves behind the traditional parent-child relationship, which only frustrates and obstructs successful continuity of the business into the next generation.
Team Building in the Family Firm
Family is one thing, business another. The family enterprise is neither - it can be the best of all possible worlds or a nightmare. The choice is strictly personal.
A family business has all the right ingredients to make up a winning team: a defined leader; a sense of commitment to a goal; a small, tightly knit group; some measure of creativity; a sense of spirit and an awareness that cooperation is necessary in order to produce a "whole that is greater than the sum of its parts".
But often family members in business together aren't able to become a fully functioning team simply because they are a family! When family values come into opposition with business priorities it often creates cracks in the foundation of team development. Building an effective team within a family firm requires attention to both family and business matters in the context of what factors contribute to an active and competent team.
Shared Goals and Objectives
The founder of an enterprise likely has as an overarching goal that the business will be continued by the next generation. While the vision of a multigenerational enterprise may exist, all too often the founder articulates it only in general terms. The specifics of how the family as a team will reach that goal is often not stated or shared with successors - "father" or "mother" may not be used to sharing "adult" concerns with children.
Complications can also arise when successors have their own vision of what the business could be - and what role, if any, they will play in the business. Their vision may well be in opposition to the founder's, but usually remains unstated for a variety of reasons including fear of the founder's reaction to any opposing view, a lack of self-confidence or a desire to preserve family harmony.
Like any other team, the family must examine its values to ensure that values, goals and objectives are clearly understood and mutually agreeable. In effect, the family in business together needs a "family creed" - a mission statement that successfully balances personal, family and business needs.
Building a family team requires time to share and compare visions and time to plan - a family plan and a business plan. Commitment to the plan and a sense of team membership comes from involving all family members in the sharing of ideas and in being able to discuss problems which they see as relevant to reaching or not reaching certain goals.
This building process works best when the family works with an agenda and a facilitator in a retreat-style setting. The retreat provides a break from everyday family and business settings. An agenda helps keep discussions focused while the facilitator can encourage communication and understanding - and channel any negative emotions that may arise.
Conflicts are inevitable - the real question is always: Will you manage the conflict or will the conflict manage you?
What should an agenda for family team building cover once the values, goals and objectives are clarified and agreed upon?
Some items will be specific to the family and its business, but there are some topics, which we believe every family must examine.
In our experience these common elements include: using resources effectively; trust and conflict resolution; sharing leadership; control and procedures; building effective inter-personal communications; and developing an approach to problem-solving and decision-making.
Using Resources Effectively
Most advisors say that parents should objectively assess their children's skills and then match skills to jobs. It may be good advice, but it's next to impossible in real life.
Parents should be asking children what their skills are and how the child sees them contributing to the business, but all too often children "grow up" in the business doing whatever tasks are required without any assessment of their skills.
From the outside, it's clear that parents can accurately assess when their child is ready for the snow shoveling/kitchen clean-up/waste management (garbage night) assignment and justify their decision on the grounds that the child is a member of the family - s/he is a team member.
Business is different. In our experience, parents don't objectively ask the right questions or assess their children's skills with cool rationality. It isn't that they don't want to; it's just the natural difficulty of being objective about your own children.
Family enterprises can make objective decisions about children's contributions to the business and accurately assess and match skills with jobs, we've found, when the family has learned to work as a business team.
We've seen that the family's effectiveness as a team in business is further enhanced when the children feel that their opinions are heard and considered, and when the founder, in particular, has created an atmosphere where successors can voice their opinions without fear of negative family or business consequences.
Trust and Conflict Resolution
When the founder says the children aren't ready to take over the business, it usually means that the founder isn't ready to give up control.
Conflicts are inevitable in any team situation. In fact, the real question is always: Will the team manage the conflict or will the conflict manage the family?
Families in business together will often avoid openly discussing conflicts for fear that there might be a split in the family. This all too natural fear of family discord is where family and business issues get particularly entangled - since attempts to evade business conflicts usually produce the very discord and hard feelings they sought to avoid.
In a family business, conflict can be intensified by intergenerational disagreements and sibling rivalry. In many cases emotional, interpersonal family issues are much more difficult to resolve than issues which arise in the strictly business context since all too often family members tend to focus on personality and emotion rather than on the business issue.
To work as an effective team, individual feelings and difficulties that come up between family members and non-family employees must be dealt with.
An outsider who has skills in family firm management or family therapy can be helpful in resolving the more contentious issues, but to be useful, the outsider must be seen to be neutral and unprejudiced.
Shared Leadership
Development and cohesion of a family business team occurs only when there is a feeling of shared leadership - just as participatory leadership creates successful non-family companies. Participatory leadership, however, is a totally foreign concept in the family where parents, not children, are considered the only "leaders" in a family.
To understand why this is probably one of the most difficult issues in family business just consider the changing leadership dynamics - and stresses - of parents, adult children, teenage and pre-teenage grandchildren sharing a cottage.
Our experience shows that the founder or controlling generation must be prepared to transfer authority as well as responsibility for different aspects of the business to the successors. This transfer of authority and responsibility has to include both operational and interpersonal functions to be successful.
It also has to be accomplished gracefully - and without "second guessing" once done. It is a difficult task, particularly for founders, but in reality probably no more difficult than other parenting tasks.
If the children are to carry on the business it is crucial that the founder involve them in managing the business. But when the founder thinks that the children aren't "ready", it's often because s/he is not ready to give up control.
The founder must also be prepared to train the children in the operational aspects of the business as well as the financial and legal aspects. One way we have found is to draw up a contract between the founder and the successors for X numbers of hours of training over a period of time with a detailed plan as to which areas need attention, when and how.
Control and Procedures
More and more activities are added as a family business grows, but little thought is given to regulating these activities. Founders, in particular, seldom stop long enough to recognize that s/he is running the company from scraps of paper in their pocket or purse.
Founders with the entrepreneurial spirit also tend to resist formalizing the way things are done - day-to-day management becomes a matter of "we've always done it this way" or "you should have known how I wanted it done".
While it is possible to successfully learn through osmosis, we believe that unless the founder and the family have established their values and goals the business will likely lack the clear organization and structure needed for the smooth transfer of the business.
Both founders and successors we've worked with have found that an organizational structure with clearly stated goals and procedures isn't as restrictive or bureaucratic as they first feared.
In our experience, what they have discovered is that there is a liberating value beyond the documentation since a formal structure can provide mechanisms for conflict resolution, shared leadership and transition from one generation to the next.
Establishing management and operational procedures doesn't happen overnight, but without some guidelines chaos becomes the norm, the frustration level rises, morale drops and business difficulties turn into family discord.
Effective Communications
Successful team development also depends on the ability of team members to communicate in an open and honest manner. Sometimes, however, openness and honesty between family members is less important than maintaining harmony - "If you can't say anything nice..."
It is possible to maintain family harmony while being open and honest, but if this type of communication has not been developed in the family it will become a critical issue in the family business. However, if parents have been in the habit of listening to their children with courtesy and talking things through with them in a way that separates person and issue, then the transition to business matters will be much easier.
Siblings are probably not used to listening to each other, but have long memories for each other's follies and misdemeanors. It needs some awareness on their part to regulate themselves, ensuring that all team members, including the sibling with the family reputation for not being able to walk and chew gum at the same time, have an equal opportunity to participate in discussions. The real need is for siblings to realize that their lack of effective communication has an impact on the business.
Problems and Decisions
Solving problems and making decisions are two critical team functions. The standard family approach to problem-solving and decision-making is totally at odds with the business approach. In the family, problems are usually solved and decisions made by parents - made in isolation without consulting children.
Most successful businesses, however, are based on participatory management with a group/task force/consensus approach to problem-solving and decision-making.
Families in business need to agree on an approach to solving problems and making decisions that leaves the traditional "parent/child" relationship at home.
Our experience indicates that families in business need to learn and follow the generally accepted, step-by-step procedures for problem-solving and decision-making in business. Because in the long term, we believe, taking the "parent at home" approach will only frustrate and obstruct successful transfer of the business to the next generation.
In Conclusion
A team's development can be measured by assessing its ability to get things done - its effectiveness and the degree to which it is cohesive. A cohesive team gives individuals a strong sense of belonging, a commitment to common goals and each other.
It takes time, effort and patience to develop a family business team with its higher level of commitment to the enterprise; ability to respond more quickly to changing market conditions; wider range of committed resources for managing difficult and complex situations; and irreplaceable support system.
Acting as a team, the family in business together benefits as a business, benefits as a family and benefits as individual family members.
The Family Team Effectiveness Critique
Instructions: Indicate on the scales that follow your assessment of your family team and the way it functions by circling the number on each scale that you feel is most descriptive of your team.
- Goals and Objectives
- Utilization of Resources
- Trust and Conflict
- Leadership
- Control and Procedures
- Interpersonal Communications
- Problem Solving/Decision Making
- Experimentation/Creativity
- Evaluation
Personal Values Exercise
Please rank from "1" to "10"
1 = Most important to you personally
10 = Least important to you personally
| Getting along with colleagues |  |
| Professional reputation | |
| Achievement of business goals | |
| Excitement | |
| Leisure time for family or fun | |
| Material wealth | |
| Respect of peers | |
| Contribution to society | |
| Pleasing others | |
| Accomplishing personal goals | |
What It Takes To Make A Family Team
Many thanks to SourceLine Inc. for the use of this information
Trust
Absence Of Trust
- Conceal mistakes & weakness from others
- Hesitate to ask for help or provide constructive feedback
- Hesitate to offer help outside areas of own responsibility
- Jump to conclusions about intentions & aptitudes of others without trying to clarify them
- Fail to recognize & tap into one another's skills & experience
- Hold grudges
- Dread meetings & find reasons to avoid spending time together
Trusting Relationships
- Admit weakness & mistakes
- Ask for help
- Accept questions & input about their areas of responsibility
- Give one another the benefit of the doubt before arriving at a negative conclusion
- Take risks offering feedback & assistance
- Appreciate & tap into one another's skills & experiences
- Focus time & energy on important issues not politics
- Offer & accept apologies without hesitation
- Look for ward to meetings & other opportunities to work as a group
Conflict
Fearing Conflict
- Have boring meetings
- Create environments where back-channel politics & personal attacks thrive
- Ignore controversial topics that are crucial to team success
- Fail to tap into the opinions & perspectives of team members
- Waste time & energy with posturing & interpersonal risk management
Engaging in Conflict
- Have lively, interesting meetings
- Extract & exploit the ideas of team members
- Solve real problems quickly
- Minimize politics
- Put critical topics on the table for discussion
Commitment
Failing to Commit
- Creates ambiguity among the team about direction & priorities
- Watches windows of opportunity close due to excessive analysis & unnecessary delay
- Breeds lack of confidence & fear of failure
- Revisits discussions & decisions again & again
- Encourages second guessing among team members
Committing
- Creates clarity around direction & priorities
- Aligns the entire team around common objectives
- Develops an ability to learn from mistakes
- Moves forward without hesitation
- Changes direction without hesitation or guilt
Accountability
Avoiding Accountability
- Creates resentment among team members who have different standards of performance
- Encourages mediocrity
- Misses deadlines & key deliverables
- Places an undue burden on the team leader as the sole source of discipline
Being Accountable
- Ensures that poor performers feel pressure to improve
- Identifies potential problems quickly by questioning one another's approaches without hesitation
- Establishes respect among team members who are held to the same high standards
- Avoids excessive bureaucracy around performance management & corrective actions
Focused
If Not Focused On Results
- Stagnates/fails to grow
- Rarely defeats competitors
- Loses achievement oriented employees
- Encourages team members to focus on their own careers & individual goals
- Is easily distracted
If Focused
- Retains achievement oriented employees
- Minimizes individualistic behaviour
- Enjoys success & suffers failure acutely
- Benefits from individuals who subjugate their own goals/interests for the good of the team
- Avoids distractions
Exercise
Using the simple definition that a "shared future is a family partnership that thrives", kindly list a few strategies that you feel would help accomplish this outcome.
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Late Night Thoughts: on Work, Role and Delegation
Some late night thoughts, while listening to jazz, and some management theory by Elliot Jaques and other philosophy that could be helpful:
- Delegation is not abdication - therefore, it helps to remain in touch with the pulse of the market and your business. This would require the co-leaders to constantly gather market intelligence, decipher its meaning alone and with others and enact strategies that drive the business in a manner that complements your established culture.
- Those family patterns that have a strong tendency to inhibit and possibly sabotage each other's best business efforts must be identified and replaced.
- Your work together has one overarching accountability, that is...
To construct and oversee complex systems that complement your intentions. and there are three areas that help explain and separate how you can contribute:- Task: assignment
- Role: position
- Work: use of discretion and judgment in making decisions and in carrying out a task backed by knowledge, skills, temperament and wisdom, and driven by values.
- There are three areas to explore in describing work:
- Time Horizon for Decisions
- Complexity of Work
- Span of Control
- With respect to work, I suggest that the co-leaders be accountable for the long-term social mission; to construct and maintain the organization's culture and values, and to construct processes that help these complex systems work smoothly and effectively.
- Work capacity is defined as your cognitive power and/or your ability to produce a result. Work capacity is based on values, knowledge, skills, talent, expert systems, wisdom, and temperament.
- There are two types of organizational "work and role" relationships: task assigning and task initiating.
- Current Actual Capacity to perform work is about competence, that is, documented output, and not necessarily ability, and can be explained by this formula:
CAC = CP + Wi + S/K + Ta + V - T
Current Actual Capacity to perform work is based on
Cognitive Power, plus Wisdom, plus Skills and Knowledge
plus Talent, plus Values MINUS Temperament. - Leadership competence is a function of role competence which can be undermined (note minus temperament) if you are experiencing feelings of unworthiness, injustice or simply not having your personal needs met in a way that matches your realistic expectations.
- There must be a balance that would allow each of you to thrive in the family co-leadership, executive and leadership team models.
- One major helpful objective is to identify and test appropriate ways to work together and support each other; this activity would unearth the major challenges to sustaining a positive experience, and therefore help preserve a shared future that thrives.
And, a word on delegation from Deming, which I believe could be somewhat different from your business model in a few ways. Please let me know your thoughts on this matter.
The principle of delegation, as described by Edward Deming, is that it is the manager who decides what he or she assigns to a subordinate, including quantity, quality and targeted time of completion (QQT). The subordinate shall have no authority to vary assignments without discussion with the manager. Managerial leaders must be able to assume that the outputs associated with the tasks that they have assigned will be produced as specified unless the subordinates give advance notice to the contrary, and thus enable the manager to assess the situation and decide what action to take.
And, finally for sure, here are six requisite steps for leaders to demonstrate competency:
- Develop, confirm and passionately lead the company with a vision-driven strategy.
- Establish a requisite organization structure.
- Ensure that all appointed key staff and managers have the cognitive capacity appropriate to their roles and work, value sufficiently their managerial leadership duties and are not adversely affected by personality and temperament.
- Construct processes that allow everyone to perform, carry out or execute all the necessary practices to complete their work without having to think about it.
- Ensure that all organizational members understand, embrace and follow these processes.
- Ensure that everyone is held accountable (by procedures which you are also obliged to construct) for doing what he or she is supposed to do.
A Comparison of Professional and Entrepreneurial Management
by Eric Flamholtz (Reproduced without permission)
| Key Result Areas | Professional Management | Entrepreneurial Management |
| Profit | Profit orientation; profit is an explicit goal | Profit is seen as a byproduct |
| Planning | Formal, systematic planning: strategic planning, operational planning, contingency planning | Informal, ad hoc planning |
| Control | Formal, planned system of organizational control, including explicit objectives, targets, measures, evaluations and rewards | Partial, ad hoc control; seldom uses formal measurement |
| Management Development | Planned management development: identification of requirements design of programs | Ad hoc development, principally through on-the-job training |
| Budgeting | Management by standards and variances | Budget not explicit; no follow-up on vaiances |
| Innovation | Orientation to incremental innovations; willingness to take calculated risks | Orientation to major innovations; willingness to take major risks |
| Leadership | Consultative or participative styles | Styles may vary from very directive to laissez-faire |
| Culture | Well-defined culture | Loosely defined, family-oriented culture |
About the Author
Aron Pervin, CMC, ICD.D, TEP specializes in the resolution of complex family enterprise and ownership situations, and business family interaction. He is the Canadian leader and international pioneer in the field of family business management, organization and governance, and business family relationships.
Aron works with business founders at the retirement stage of a career and typically consults to successful second, third and fourth generation business families that require and demand results and not recommendations®. Aron has established and served on family and industry association boards and is consulted regularly by the media for his views on family business issues.
In my consulting practice, I help business family members - accidental partners - help themselves. This requires the application of craft [experience], art [insight], luck [intuition] and science [analysis] supported by an eclectic academic body of knowledge.
Print Article