Are You A Family Business Or A Business Family?

 

Please Answer Yes or No To The Following Questions.

 

1. It is imperative that the business be kept intact and handed over to the children.
2. Family members are careful to avoid discussing family matters at work.
3. Family members are paid equally.
4. Children live apart from the family for an extended number of years prior to their entry into the business.
5. The business will hire a better qualified outsider before it will employ a family member.
6. The business is a tool that helps keep the family together.
7. Jobs and roles are assigned to family members working in the business without regard to gender.
8. The activities and happenings of the business are a constant subject of attention and/or conversation throughout the family.
9. Many of the ideas and solutions that are used to improve the business and/or solve problems come from the children.
10. Everyone is evaluated and rewarded strictly on their job performance.
11. Family members engage in behaviors that would not be tolerated in any other company.
12. The children working in the business are able to(and do) make decisions without hesitation.
13. The best interests of the business always takes precedence over family members’ desires.
14. It’s important for the business that family members get along and allow problems to resolve themselves over time.
15. In-laws and spouses(i.e. non-blood family members) are involved in business matters.
16. “Only family members have the commitment we need to make our business a success.
17. People in the business have clearly defined roles, accompanied with full and proper authority.
18. Prospective successors are deliberately involved in development activities outside of the company to help strengthen their skills.
19. There are multiple generations of  family members actively involved in the business and the oldest generation is firmly calling the shots.
20. The business owner ignores the possible impact upon family members when making decisions.
21. It’s assumed that the children will come work for the business.
22. Loyalty to the family is considered a critical trait among senior managers.
23. Children having a history of deep seated conflict will be/have been brought into the business and/or given ownership.
24. Business advisors tend to be old friends of the family.
25. Family members only receive jobs for which they are qualified.
26. Everyone working in the business is held strictly accountable for their job performance.
27. Birth order is not a factor in determining job assignments and roles.
28. The senior managers have been employed for many, many years by the company and the team has been in place for a long time.
29. The children are(were) encouraged to pursue careers outside of the business.
30. Family members are used as administrators/trustees of the family’s estate.
31. Clear boundaries are not drawn around people marrying into the family regarding their involvement/participation in the family’s business.
32. Family members are careful to avoid relating to each other as family members while at work.
33. The children working in the family’s business spent several years working for other companies.
34. Everyone working in the business is paid prevailing market wages and perks for the work they perform.
35. The owners are prepared to sell the business if they don’t believe family members can effectively run it in their absence.

  

             REASONS FOR FAMILY MEETINGS

1. Build a stronger family.
2. Build a stronger business.
3. Plan family participation in the business.
4. Help children manage inherited wealth.
5. Open up the succession process.
6. Preserve family values, traditions and history.
7. Professionalize the business.
8. Recognize and resolve conflict.
9. Plan for future ownership of the business.
10. Develop ways to teach family values in future generations.
11. How should the family manage its role in society, including philanthropy, civic activities, and politics?
12. Determine if the family’s contribution to society be focused, and/or visible. How should it be determined and organized?
13. Determine how family members are to be attracted to the business without threatening their right for self determination.
14. Determine how to share the benefits of family traditions with those who are not shareholders.
15. Determine how to balance expectations of family members, employees, shareholders, customers, and the community.
16. Determine how to preserve rich traditions while assuring flexibility and change.
17. Determine how to retire family shareholders from time to time through the generations to help assure continuity.
18. Determine how to help needy family members.
19. Determine how to deal with unequal circumstances.
20. Determine how to teach responsibilities of ownership to next generation.
21. Determine how to identify and support family members’ goals and hopes.
22. Determine what skills such as communication, conflict resolution, public speaking, media relations, etc, are needed to develop and strengthen the family.
23. Determine how to keep alive the vision of family business continuity.
24. Determine ways to organize and plan the family’s future.
25. Determine how the family supports other family members’ goals and objectives.

Kent Lutz

President/Founder

Institute for Family Business

Assistant Professor, Business

Entrepreneurship/Family Business/Finance

University of Cincinnati

Blue Ash College

513-314-7561

                              Institute for Family Business

                                  Generation2Generation

                            Critical Issues For a Family’s Future

SUCCESSION

How do we assure our ownership generation lifelong financial security?

What non-business interests will keep the ownership generation fulfilled during retirement?

How do we pick the next company president?

When does the presidential transition take place?

How do we decide that?

How do we evaluate the next president’s performance and consider his or her replacement?

PARTICIPATION

How do we decide which family members can join the family business?

What preparation if any is required?

How do we determine titles and authority?

What if a family member employee doesn’t work out?

What if a family member chooses to leave the business?

Do we permit spouses or other nonblood relatives to work full or part time in the business?

Do we allow the next generation’s children to enter the business?

Under what circumstances?

COMPENSATION AND OWNERSHIP

How do we evaluate and pay family members?

Who participates and how much in the financial growth or future of the business?

Who can own stock in the business?

What rewards and returns do shareholders get?

HARMONY

How do we deal with conflicts between generations?

How do we deal with sibling conflict?

How do we teach in laws the business and our family traditions?

Who will lead the family activities and customs into the next generation?

How do we make future family decisions?

RESPONSIBILITY

How do we help family members in financial and/or career need?

What responsibilities does one family member have to another?

What if there is a divorce?

What if a family member breaks the law or acts in a seriously irresponsible way?

How much financial information do we share with whom?

How do we protect the contributions of good non-family employees?

How do we support family members new business venture ideas?

How do we cope with public visibility and the public’s expectations of successful families?

What responsibility do we have to the community?

How do we handle our charitable giving desires and strategies?

ADDITIONAL KEY QUESTIONS

What are the central values of our family?

How can family values strengthen the business strategy?

How can family values be taught, preserved, and institutionalized for future generations in the business and the family?

What should be the family’s role in society, including philanthropy, civic activities, and politics?

How is responsibility of ownership taught to the next generation?

Should our contribution to society be focused? Visible? How should we determine and organize it?

How do we cope with our visibility in the public domain?  What publicity is best for us?

How do we attract family members to work in the business without threatening their right to self determination?

How do we provide fair and acceptable outlets for family members who want freedom, without losing them from the family?

How do we share the benefits of family traditions with those who are not shareholders?

How do we balance expectations of family members, employees, shareholders, customers, and the community?

How do we assure rich traditions while assuring flexibility and change?

How do we decide whether to perpetuate family business ownership?

How do we retire family shareholders from time to time through the generations to help assure continuity?

How do we deal with the inevitability of individual family members unequal circumstances?

How do we preserve the rights and privileges of ownership for future generations without allowing the ownership to become a burden?

How do we identify and support family members goals and hopes?

What skills(such as communication, conflict resolution, public speaking, media relations etc.) do we need to develop and strengthen our family?

How do we keep alive the vision of our family business continuity?

Kent Lutz 513-314-7561 kent@thelutzinstitute.com

President/Founder  Institute for Family Business/Generation2Generation

                                    Go To Top Of Page