Stop Running Your Business - Start Understanding It
Let’s continue the series exploring the seven steps used to create and embrace …
STRUCTURED, COURAGEOUS CONVERSATIONS
In this article, we walk through a concept I call “Familiness advantage”. Did you know that your true business value includes both tangibles and intangibles? It is the intangibles that let’s you and others identify whether you have a Familiness advantage … or not.
Before describing this, here is a honest, brutal fact:
Family businesses that do not intentionally plan structured, courageous conversations, will eventually lapse into a Familiness Constraint. 100% guaranteed.
Familiness Advantage
This advantage is made up of Human, Relational and Structural components and represents about 80% of your business value. There is a check-in assessment / process I use to walk through these in more detail. I also present a visual of the three areas and what they include. For this article, here are a few questions to give a basic idea of what this looks like:
What would be lost if your business was sold?
What is your business best known for, stand for? Is it clear how you do what you do, who you serve, what impact you have?
Do you have documented principles, values that guide your business decisions? Do you have these defined – i.e. what do these look like in practice? What behaviours are involved?
Do you have a documented strategic plan in place? When is the last time it was updated?
What are the unique skills, capabilities and relationships of the business owners and family members involved in the business? How are you intentionally nurturing these?
Do the owners and managers think strategically, entrepreneurially? Is there capacity for this orientation in thinking beyond the day-to-day operations?
What processes, routines and practices do you have regarding your decisions around people, leadership?
Action # 1 How well do you feel your owners, managers, and staff are aligned on the items above? How do you know for sure?
If you are feeling tension with any of these areas, you are not alone. Many family businesses do not invest time and resources into them. Many do not intentionally protect, nurture their “Familiness Advantage”. That is ok – we can turn to our seven-step process for guidance.
Step 4: Get to know your business
You and your family members are embedded into every aspect of this business, so there might be little you don’t know. Let’s skip this step too, right?
The core challenge here is how to remain curious and open enough to invite new perspectives, especially in areas outside of your view and areas that have been in place a long time. What in your gut, do you feel you are missing? This process helps you here.
To do this well, you can work through an objective discovery process, one that includes all perspectives to help you better understand the business … its strengths, challenges, and opportunities. Inviting family and certain nonfamily leaders in this step is encouraged.
Creating an Open, Safe Space
Just like the discovery process for understanding your family, you will need an open and safe space for everyone to share their honest thoughts and ideas. Here are a few attributes that give you a sense of whether you have this space or not:
Does everyone usually speak their mind in your meetings and openly share their thoughts?
Do you sense an adequate amount of trust among the teams, department groups, and ownership team? What’s missing?
Do you feel anyone is afraid to ‘rock the boat’ so they remain quiet in meetings?
Do your meetings include an agenda, and provide information ahead of time for those invited to the meeting?
Does everyone see mistakes as opportunities to learn?
Do your meetings generally stay on track, or quickly go off the rails and uncomfortable emotions emerge?
Action # 2: When you review these attributes, how confident are you that you can create this open space? What might be making you uncomfortable here? What might be one small step you can take to reduce the gap?
Just like in Step 3 when understanding your family better, when you invite an independent, objective person to interview each key member of the family business (i.e. family members involved in business, sometimes their spouses, key nonfamily employees), you get a broader, more comprehensive understanding of your business, its core strengths and opportunities – both internally and externally.
Successful outcomes
Identical to the outcomes in Step 3 when you purposefully begin a discovery process to understand your business, you will experience the following
Power shifts slightly, members feels seen and heard – they open up, share
Competing priorities are identified
Hidden expectations, assumptions and biases are questioned
Strengths of each family member are identified and allowed a space to grow
Fears and uncertainties about the future Family, Business and Ownership circles are discussed openly
Options are created, their pros and cons are discussed
The tensions with legacy and innovation are clarified
Your professional advisors are invited in to bring detail, limits and next steps to the options.
Step 3 and Step 4 are where CLARITY surfaces.
CLARITY creates AGENCY. Clarity creates COURAGE. Clarity creates OPTIONs to build the future you want and reduce your FEARS.
In my next article, we will show how Step 3 and 4 come together and are presented to your family group during Meeting # 1. This is where the magic, mystery and breakthroughs occur, priorities are identified, timelines created and responsibilities assigned.
This is where you build progress, one meeting at a time.
We will also head into Step 5 – “Build upon what you are already doing”. You are further along that you may think – 100% guaranteed!