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Transcript of Family Succession: Fantasy vs. Reality Chief Executive Boards International Saturday, April 16, 2005...
Family Succession:
Fantasy vs. Reality
Chief Executive Boards International
Saturday, April 16, 2005
Richard D. Geib II, C.F.S.P.
Professor O’Hara
“Before the multinational corporation, there was family business. Before the Industrial Revolution, there was family business. Before the Enlightenment of Greece and the Empire of Rome, there was family business.” The oldest present family businesses can claim to have outlasted governments, nations, cities, and certainly once-mighty corporations.
Define Family Business
Multiple family members in leadership positions
Survived several generations under family control
Sole proprietorships, farms, etc.
America’s Oldest Companies
Zildjian Cymbal Co.
1623
America’s Oldest Companies
Corning Glass
1851
America’s Oldest Companies
Levi Strauss
1853
America’s Oldest Companies
Anheuser-Busch Co.
1860
Bacardi
1862
America’s Oldest Companies
World’s Oldest Companies
Kongo Gumi
578
Hohsi Ryokan
718
World’s Oldest Companies
World’s Oldest Companies
Fabbrica D’ Armi
Pietro Beretta –
1526
World’s Oldest Companies
Kikkoman
1630
William
Clark & Sons
1739
World’s Oldest Companies
World’s Oldest Companies
Waterford
Wedgewood
1759
Rules of the Family Business
If it is not written down, it does not exist Agreements not enforced are not agreements at all A decision is not made until it is acted upon You cannot have a retirement plan in place too soon
It is important for family members to have clearly defined and separate roles within the business, community, and their own lives If an owner does not want to succeed power, MOVE ON!
Family Business vs. Family Baggage
Family business conflict can be very healthy for both the company and the family
Don’t forget the spouse
In planning, it cannot be equal, but it can be fair
Sometimes we say the wrong things for the right reasons
Family members should only be compensated and retained by performance
If it cannot be measured, it cannot be monitored
There are no secrets in the family business, but there may be a conspiracy to protect shared fears. It will grow in darkness until someone turns on the light
THE SPOUSE
Personal Growth IssuesMaslow Third Force Psychology
In our society, most basic needs are being met
You cannot grow by having these needs met additionally
“A musician must make music, and an artist must paint, a poet must write, if he is to be ultimately at peace with himself. What a man can be, he must be. This need we may call self-actualization…It refers to man’s desire for self-fulfillment, namely to the tendency for him to become actually in what he is potentially: to become everything that one is capable of becoming…
Personal Growth IssuesMaslow Third Force Psychology
Don’t be forced into a role you are not comfortable with
Members can be tested for positions, although everyone in the family already knows the answers
Don’t confuse your identity with that of the firm’s
The business is a means to an end
You can use family assets to help other family members self-actualize outside of your primary business
Maslow X-Y Theory How you view employees internally will have a direct impact on how you deal with them externally
The challenge is to build an environment and philosophy where motivated people are willing to make a maximum contribution
Our policies and procedures speak volumes regarding our assumptions about people.
Rich’s Star Employees
When It Works
Family business takes much
communication, planning and
understanding
The family business is just
one of many adventures in life
The family business can be a
very rewarding experience and help the whole family unit self-
actualize
The family business is the most gratifying of all business experiences. No other business model instills managers and employees with more commitment, passion, and sense of history in the business. When done correctly, there is no greater pleasure than watching the growth, development, and success of the family members working together.
Don Boone Once Said…
“I want to give to other family members the same opportunity to build a
business that I had.”
Family Succession:
Fantasy vs. Reality
Chief Executive Boards International
Saturday, April 16, 2005
Richard D. Geib II, C.F.S.P.