Good News From NPR?

NPR radio is producing something called “StoryCorps” in which they feature stories of every day people. This week they chose the story of a funeral director and his story that casts all of us in a pretty good light. Odd for this to be featured on the usually contentious NPR but it’s uplifting and sometimes we need a good story. click on the link:

nprlogo_138x46 Following in the Family Footsteps

 

When It’s Time To Gracefully Exit

The ownership role of any entity is a cycle: Learning, leading, mentoring and, finally, leaving. This essay offers interesting insights on when one should leave gracefully.

Screen Shot 2013-07-16 at 10.39.12 AMPerhaps such criticism is warranted. But Peter Drucker would say that Pincus, so far, has at least done the right thing in stepping aside. “As a new venture develops and grows, the rules and relationships of the original entrepreneurs inexorably change,” he wrote in Innovation and Entrepreneurship. “If the founders refuse to accept this, they will stunt the business and may even destroy it.”…More at When to Share Your Baby | The Drucker Exchange | Daily Blog by

Is your heir killing your business??

This is an interesting blog for our profession.  Most times family succession works out..in a way… but sometimes it backfires. This blog from Harvard Business review sheds some light on impact and sometimes unpleasant actions.  Just remember it works both ways. Sometimes the Successor needs to address issues with parents or uncles too.

hbrAs the eldest son of the family patriarch, Denis went directly from university into the family business. During his entire career, he worked in his father’s span of control, reporting directly to his dad within six years of joining the business.

Denis has always been the presumptive heir apparent for the CEO position. The apple of his father’s eye, Denis could do no wrong, including doubling a sales force while halving sales and running a new cosmetic division into the ground. Each of these career steps led to more and more responsibility befitting a rising—not a failing—executive.

Non-family employees, knowing that someday Denis would be their boss, kept their mouths shut—or exited the organization, leading to a drain on talent.

Ultimately, however, the other family owners of the business had to end this dangerous game of “chicken.” Denis’s had risen high enough in the organization that underperformance was becoming a threat to the health of the overall business.  Read more

Are You A Problem Patriarch In Your Business

By all accounts family businesses are complicated. In my practice I often find myself exposing the “Elephant In The Room.” The colors of the elephant vary and this article deals with one that is particularly difficult. There are many factors that cause good people to become problem patriarchs (or matriarchs). By the time they are in that place the causative factors are less important than stopping the negative impact they are having.

This is an interesting diagnostic article. Read it and see if the shoe fits.

 

hbrBut there was a darker side to Carl’s success.

Although his first act was one of the best ever, he became a “problem patriarch,” a very hard-driving alpha leader who hired superb talent within the family and the business — and then consistently undermined that talent.

He drove his sister out of the company by placing her in a succession of dead-end jobs. His uncle resigned from the board saying that he wouldn’t be part of a “paper board,” in which Carl effectively made all the key decisions. Carl responded by maneuvering to buy most of his uncle’s shares. In the process, he created a leadership vacuum that threatened the very legacy he had worked so hard to build.

When he had a heart attack at 64, Carl’s doctors cautioned him to slow down. Worried both about his health — and about the prospects for the company — family members strongly advised Carl to step aside. Not surprisingly, he selected a relatively inexperienced CEO he knew he could control. People in the organization had no doubt about where the buck really stopped.

More Reading

 

Family Business Infighting

Current literature abounds with research revealing that, despite added issues, family businesses tend to be sustainable longer than non family businesses.  Why is that?

hbrIt’s one of life’s sad ironies that folks who love one another can end up having far more acrimonious business relations than people who are unrelated.

And yet in our experience, conflict actually occurs less frequently in family businesses than non-family businesses. It’s just that when it does break out, the fighting tends to be more intense.

Why is that? The answer is devilishly simple. Fights in family businesses break out because they can. In non-family businesses, there are barriers to keep things from escalating. Owning the business removes many of these barriers. Once a conflict starts, it can easily spiral out of control.

It isn’t that the causes of conflict are any different in family and non-family businesses. In all types of companies, people disagree about issues related to strategy, money, status, and authority. No organization is immune to narcissistic leaders or difficult relationships between employees. But there is a fundamental difference in the two types of companies in what stops conflicts. The difference, in a word, is boundaries.

More Reading

Family Business On the Couch

Screen Shot 2013-04-08 at 8.34.07 AMFamily business, as we all know, has greater dynamics to deal with than non-family business. Here is an interesting video interview with the author of a new book: “Family Business on the Couch”. Some really good insights for family owned funeral homes.

Waiting To Sell Your Business Might Backfire

I hate it.  Telling someone who has worked and sacrificed 40 years that their business is worth as much today as it ever will be.  Worse is telling them it is worth less today than it was last year.   The fact that this Wall Street Journal article underscores we are not alone is no solace.

“The average business coming to market has lower earnings [than] it did in 2007-2008, therefore the prices are lower,” says Barry Evans, partner at Acquisition Services Group, a business brokerage in San Diego. “If a business has lost 20% of its earning power in the past few years, it will sell for at least 30% less today.”

Andy Birol, a small-business consultant in Pittsburgh, says many of his older clients are at a crossroads: “They either have to sell for far less than they need or deserve to get out, or they have to muster up the energy to recommit themselves to the business,” he says. “They’re conflicted.”  Read More: The Economy Stole My Retirement

What I Would Do:

Funeral Home owners have 80-90% of their personal wealth locked up in their business.  If you are over 50 you need to start working on future plans now.  (This is self serving but this is what I do for a living)  I am encountering too many people who have worked, taken risks, and sacrificed only to find at the end of their career they have little to show for it.

I don’t expect too many funeral homes to go into bankruptcy but I do expect a lot of owners to simply turn out the lights one night and go home…for good.  I absolutely cringe when I hear:  

“I didn’t expect it to turn out this way”

But it doesn’t have to “BE” this way.  For most of you there is time to make the changes you need.  For others you have enough value to get out with your reputation intact.

So, what I would do…and I will try not to do this too often… is call ME.  919.926.0688