Family Business Tipping Points

When the Magic Happens – By Bill Seelig

A Prologue to Bill’s Upcoming Book

This informative publication describes real world successful family business experiences. Bill explores both the family and business sides of these outstanding family businesses. He explores both the family and the business sides of the coin. A virtual tour of what successful business leaders have done to overcome the many challenges involved. The following excerpts share a few core components.

The Family Side of the Enterprise

Successful family businesses are unique in their ability to handle the interplay of family system issues and business system challenges. Healthy families pay close attention to both sides of the coin. They strike a balance between the development of healthy family relationships and rigorous business practices. Dysfunction in one frequently runs the risk of problems in both.

Sustaining and/or restoring health in family relationships is critical to the long-term growth and sustained success of any family business. Exploring the family’s ability to communicate effectively, build a winning culture of support, weather the essential developmental stages and eventually – ……letting go. The latter includes the complex business succession process or when appropriate, the sale of the company. Lets examine two tools in our family business toolkit.

Healthy communication amongst key family members is critical. The ability to interact respectfully and directly regarding a range of issues is fundamental. Family members bring their own unique style to the group process. Together they form a family dance, with predictable patters of interaction. We help them recognize their dance and their individual roles in the process – highlighting both strengths and areas of healthy collaboration. We also explore dysfunctional styles and disruptive patterns and assist them in taking corrective action. This often includes the exploration of family baggage from earlier generations.

We frequently use a family genogram (below) to further understand the complexity of families and potential areas of conflict that may be impacting business operations.

Genogram

This example: two spouses each previously married; wife had two children, husband had none; current couple cohabiting without marriage and has jointly one child (all female children).

Respect for Boundaries We also utilize a Three Circle Model to explore what family members are in what circle (below) and the roles they play in each. Some have roles in all three circles; others might be active in two and others only one. Maintaining the boundaries between the circles and the different roles required for each person are important. Those families that don’t manage the interface and respect the boundaries are often at the root of family/business problems. We help them Map their family to build clarity, understand each other’s roles and the importance of respecting their role and the roles of others. *Source: Renato Tagiuri & John Davis

The Business Side of the Enterprise

The other important component of our work is helping leaders build robust business systems and, where appropriate, simultaneously integrate their family and business systems together. This involves thoughtful strategic/entrepreneurial thinking, a strong leadership team, operating systems that really work and the use of peer groups and seasoned family/business coaches. One of our core tools is the EOS operating system.

Operating Systems that Really Work The need for a comprehensive, practice-based business model is important. Many companies gerrymander different systems together, over the years, ending up with a confusing mix of systems and processes. Along the way they often Hit the Ceiling, a perfectly normal phenomenon for growing the business side of the family firm. Most need focus on essential problems, clarity to get everyone on the same page and simplicity to execute consistently well by following a handful of rules.

We utilize Geno Wickman’s Entrepreneurial Operating System RE in collaboration with our family business model. I was certified in EOS and have helped many companies successfully implement this system with tools that substantially improve their overall business performance. Very powerful! Let’s let the owners speak for themselves:

The EOS Model™

A visual illustration of the Six Key Components of any business that must be managed and strengthened to be a great business. This model applies to big and small businesses alike, in any industry, to simplify the way you see your organization.

The Challenge

Family Business/Risky Business Successful family business leaders have a unique blend of compassion for family and a strong entrepreneurial spirit for running a healthy business enterprise. Both family life and business life are filled with opportunities for learning and growth. Those who work their way through the trials and tribulations of both can be rewarded both personally and financially. Their ability to think inter-generationally, to plan for the long haul and simultaneously stay focused on the present are unique qualities in our 21st century, short-term world. As David Bork predicted years ago, Family Business is a Risky Business. Those who have a passion and the tenacity for the journey do quite well.

When the Magic Happens As I’ve observed these families over the years I’ve been struck by their ability to take on both business and family problems. Many are of a developmental nature and others are due to crises of one form or another. While these issues often look insurmountable, these families have the ability to put them on the table, with or without help, and work it out. They create a positive Tipping Point in their journey toward family business success. This is often followed by a period of calm, appreciation and pride. That’s when the Magic Happens!