Scott Liston, Strategic Advisory Principal of MLA Companies
Unity Needs a Compelling Path Forward
Like anything else, a family owned business can either serve as the source of unity to the family, or it can lead to the devastation of whatever unity was left. Unfortunately, the business news is full of the latter and becoming the former is a matter of careful strategy, planning, and execution. Certainly, letting these issues “take care of themselves” is only asking for trouble, and not just business trouble, but relational trouble that may exist well beyond the life of your business.
One of the keys to unity is to provide the family with a compelling path forward.
The Generational Shift
The challenges noted above often first arrive when there is a transition of leadership from one executive to the next, made even more difficult when that next executive is the next generation. By moving the leadership from one generation to another, often a new relational dynamic surrounds that executive including siblings, cousins, aunts and uncles.
So not only does that new executive face the natural pressures of getting their arms around the operation, building trust among employees, and attempting to fill what are often very large shoes, they then face the scrutiny and sometimes jealousy of this new family dynamic.
Outside Board – a Solution?
An outside board of advisors or directors, especially if they have the trust of all generations, may help to smooth the waters of these often tumultuous times in a business. But a board performs best when it is responding to the path forward for the business developed by the CEO and his or her team. This responsibility cannot be turned over to the board.
Setting the Course
The beginning of unity is almost always the setting of a plan. Leaders must lead and that looks like more than saying “let’s go there.” Rather it looks like both setting the direction and then planning how to get there.
While many may think this is a given, far too often, families get caught in the middle of bickering over who is in charge rather than where they are going. CEOs often get trapped in debating where they are going for too long, rather than setting a course and then planning how they will get there. In both cases, this leaves the door open for everyone to be a critic and no one to help pull the organization in a unified direction. It too often leads to a defeated CEO, demoralized family, and a diminished business.
The old saying goes “when you don’t know where you are going, any road will take you there.” But a good leader knows that it’s not enough to just know where you are going, you must have a map, a plan, a path to get there.
The Compelling Path Forward
Here are some principles that are helpful in preparing a compelling path forward:
- Don’t let great be the enemy of good. Yes, I know most of us, as executives, want perfection. But the worse plan is a plan never executed. With execution, you will get important, necessary, and actionable feedback both from the family but more importantly from the market. Moving is better than sitting. So build as good a plan as possible and start executing, then be prepared to keep working both on and in the plan.
- Leadership creates unity. Often we are tempted to think that if we try to keep everyone happy, unity will follow. Most often, the exact opposite is true. That is not to say you should not empathetically listen to each stakeholder, but if you wait for unity, it will never come. Use the compelling path to call them to follow you.
- Involvement creates unity. You don’t have to put the plan together by yourself. Invite the input of your team to build team commitment and alignment to the plan.
- Communication creates unity. Put the plan in writing and then share it with those who need to know: the management team, the board, and the employees. Of course you will have to adjust as you go, but you will earn respect for committing to a plan and being willing to be accountable to how it’s going as you work the plan.
- Execution principles create unity. Have you ever gotten in a car and you knew the person driving didn’t know where they were going? Everyone may have agreed on where they were going, but if the driver didn’t know how to get there, you likely went just about crazy. If you merely suggest a path forward and don’t show everyone you have the map to get there, they are likely to get out of your proverbial car as quickly as they can. Use action plans that are tied to projections and budgets to align the execution of the organization to the strategy. Allow your team to own and deliver their parts of the plan.
- Paint the picture. Show your followers the benefits of your destination. It may come in profit, growth, equity liquidity, or general health of the company.
- Celebrate the journey. With a compelling path forward, you agree on where you are going, your followers have confidence you know how to get there, and you can enjoy the journey.
There is no substitute for a compelling path forward. Planning and execution are keys to family unity in business.