Ever wonder why some family businesses get the whole family together for a retreat away from the office? What do they do? What do they talk about?
"These are not business meetings, though business issues are discussed," explains Andrew Keyt, executive director of Loyola University's Family Business Center in Chicago. The purpose of these gatherings is to consider and act on issues that occur when a family is in business together.
The most effective meetings are the ones that are inclusive and not limited to family members who are owners. "Relatives who don't have stock in the company still have a stake," explains Tom Kaplan, family business consultant and assistant professor of entrepreneurial studies at Fairleigh Dickinson University in Madison, New Jersey. If they're expected to be supportive of their shareholding relatives (in some cases, spouses), these nonshareholders have to be part of the discussions and the solutions. For example, they should know how their spouses can cash in stock to pay for their children's college educations. They have to understand why their spouses will be working late for the next few months--to generate community support for a family business project. And they have to be cognizant of what must happen before their children are allowed to enter the family business.
Discussions needn't always focus on specific problems, however. "These meetings often just set the groundwork for an ongoing dialogue so that when difficulties arise, the family has a framework of trust in which to work through the problems," Kaplan says.
The agenda for family meetings varies according to the stage of the business and the issues it faces, but it should always include education, information and fun. And while the rest of this article will concentrate on specific agenda items surrounding education and information, it's important not to forget the fun segment--playing volleyball, putting on a talent show or a golf tournament, playing board games, going hiking--whatever family members like to do.
Family members also need to catch up on one another's lives, so they might set aside time before the formal meeting to share life updates. Or they might do so in a more celebratory manner by acknowledging each person's achievements during the past year at a special family dinner. "When families share positive, fun experiences," says Keyt, "they build trust that carries them through tough business discussions."
Patricia Schiff Estess writes family business histories and is the author of two books: Managing Alternative Work Arrangements (Crisp Publishing) and Money Advice for Your Successful Remarriage (Betterway Press).
What's To Talk About?
- First stages. If a family is just initiating family meetings, agenda items dealing with how the meetings will be conducted are especially useful, says Keyt. Be sure to discuss the following:
1. Who will participate in discussions? Spouses? Ex-spouses? Children older than 15? Family members in the business but without ownership interests?
2. What are the ground rules for the discussions? What happens when someone gets abusive or otherwise out of line? What agreements should be made about confidentiality?
3. Who will facilitate the meetings? Do you need an outside facilitator? Is someone within the family skilled enough for this role? Should you rotate facilitators for each meeting? Should you have co-facilitators? Will the facilitator or the group set the agenda?
4. What expenses of the family meeting will be paid for by the business? Golf fees? Personal items purchased? Travel expenses? Expenses attributed to a significant other?
- Later on. Issues that involve both family and business abound, so there shouldn't be a shortage of topics to discuss. The business' financial information will probably always be on the agenda, as will an updated report of industry trends. It's also important to re-evaluate whether members fully understand the business' mission and are living by the family's values. Beyond that, any of the following topics could be discussed and then acted on:
- a family employment policy
- issues surrounding succession
- a family compensation policy
- how to mentor the next generation
- prenuptial agreements for family members
- what to do if one family member winds up in a position of extreme financial crisis
- how to handle substance abuse among family members working in the business
Family meetings are also wonderful times to provide meaningful educational experiences, schedule training sessions to hone skills and foster family development. So you could, for example, bring in advisors to lead discussions on the roles, rights and responsibilities of shareholders; help everyone improve their negotiation skills; or lead the group in various team-building exercises.
The meetings can also serve as classrooms, providing members with an opportunity to discuss subjects that relate to the family members' well-being, such as whether to have sessions with a behavioral-health consultant to discuss healthy lifestyles, in light of a family's health history. And many families find it enriching to add the family history to the educational segment; for example, they might tell funny or moving stories about the founder's early years and later incorporate the stories into a written or videotaped family business history.
At the conclusion of a family business meeting, it helps to critique yourself. Did you accomplish what you needed to? What part of the meeting was the most useful, fun or interesting? Was there something participants didn't like or find meaningful? Also, did this meeting give rise to a topic that should be an agenda item at the next meeting? Time--and the business--will tell.
Follow The Leader
Running a family meeting successfully takes skill and training. Among other things, the facilitator makes certain the dialogue stays productive, nudges people back on track, guides the decision-making process, and defends the weakest members of the family. Rarely, if ever, should the facilitator be the head of the family or the head of the business. Whether or not that person intends it, he or she winds up being intimidating and therefore stifles open discussion.
Outside facilitators are often hired to navigate family meetings. However, many family members have the style, temperament and desire to act as facilitators. Loyola University's Family Business Center's Communications Institute in Chicago offers weekend training sessions for family business meeting facilitators. Several other university-based family business centers and individual family business advisors offer similar instruction.