Conference Notes: Building High Performance Families
Last week, the FBC hosted its first conference of 2013: Building High-Performance Families. The day’s theme challenged attendees to answer an important, and sometimes overlooked, question: what is family strategy and how do you build it? Keynote speakers and FBC Members shared stories, experience and insight, resulting in a day of mutual learning and candid conversations.
Opening Keynote: Family Strategy Overview
Joe Astrachan, a colleague of mine in the field of family business, partnered with me to deliver the opening keynote. Our job was to frame the conference and get families thinking about the day ahead. Specifically, we wanted attendees to consider the question I mentioned above: what is family strategy and how do you build it? Check out some of the highlights below:
- Ownership, unity and cohesion are the greatest advantage a family business has. What are you doing to support this?
- Research shows that building relationships and emotional connections within a family business are the driving force behind business health.
- In order to keep up with today’s rapidly increasing pace-of-change, each generation may need to reinvent the business. Keeping the family unified will help the family meet these challenges.
Rebecca Peterson (G4), Family Council Member at Sasser Family Holdings, discussed how her family business manages liquidity and the past, present and future state of the family distribution policy.
- A distribution policy should evolve as the family grows and be aligned to the family strategic plan.
- Create an appropriate growth target. This will encourage healthy and sustainable growth without incurring excessive risk.
- Performance-based distribution policies can benefit the future of a family business and its shareholders.
Building a Strategy for Governance and Decision Making
Sarah Richmond (G3), President of the Dawn Foods Foundation, shared the journey her family business has taken to create a family constitution and how it’s affected (and still is affecting) the unity and cohesion at Dawn Foods.
- A family needs strong leadership to get the process of governance planning moving
- Trying to unify everyone can be difficult, but putting things down in writing, in the form of a constitution, can be incredibly helpful.
- A family constitution is not etched in stone. Regard it as an evolving document. Remember: things that work now might have to change if they stop working in the future.
Creating Strategic Innovation
Jack Veale, author of Creating Strategic Innovation, took us step-by-step through the lifecycle of a family business, from birth to death, and provided key strategies to help save an aging business from becoming obsolete.
- When a business is at its prime, it is vision-oriented and aggressive, but also controlled and predictable.
- Loyal shareholders are nurtured through active engagement such as educational meeting, tours and classes/workshops.
- An engaged board, often found in a healthy business, is highly active; provides insight, advice and support to the CEO; and seeks outside experts to add value to the decision making process.
Creating a Communication Strategy
Susan Kolavo (G4), Director and Shareholder at Ed Miniat Inc. along with Heidi Vermeer-Quist (G3), Ownership Council Chair at Vermeer Corp, took a look at the complexities commonly found within a growing family business and how it relates directly to strategic growth.
- The goal of healthy communication is to speak the truth (your perspective) in a loving, respectful way.
- A shareholder liaison can be a helpful intermediary. This is a person who keeps shareholders and family members on the same page through effective communication.
- Keep everyone informed. Regularly scheduled conference calls, newsletters, annual meetings, along with webinars, seminars, and other family business educational opportunities, are all ways to boost engagement and connectivity among your shareholders, board of directors and advisory board members.
Building an Ownership Strategy
Lauren Tracy (G3), Business Development Manager at Dot Foods, gave us a behind the scenes look at her family business’s ownership strategy, the development of a family council and how groundwork is being laid for the next generation.
- Ownership is being part of the family. Provide a variety of outlets (family council, family foundation, annual family meetings, shareholder meetings, social events, etc.) for all family members to engage the business.
- Family councils create guidelines based on the following questions. What does the family bring to the business? What does the business bring to the family? Why do we want to work together?
- Work to create sustainable family unity and pass this on to the next generation of children.
Building a high-performing family takes time, patience and a unified vision. If you have something to add to the conversation, feel free to leave a comment below and tell us what you’re doing to invest in the integrity of your family business. We’ll focus on Building a High-Performance Business at our October 3 conference. More details will be posted in the coming weeks. In the meantime, follow us on Twitter (@LoyolaFamilyBiz), and we hope to see you at our Board Social: Cruise Chicago on June 12.