family succession: fantasy vs. reality chief executive boards international saturday, april 16, 2005...

Family Succession:

Fantasy vs. Reality

Chief Executive Boards International

Saturday, April 16, 2005

Richard D. Geib II, C.F.S.P.

Professor O’Hara

“Before the multinational corporation, there was family business. Before the Industrial Revolution, there was family business. Before the Enlightenment of Greece and the Empire of Rome, there was family business.” The oldest present family businesses can claim to have outlasted governments, nations, cities, and certainly once-mighty corporations.

Define Family Business

Multiple family members in leadership positions

Survived several generations under family control

Sole proprietorships, farms, etc.

America’s Oldest Companies

Zildjian Cymbal Co.

1623

America’s Oldest Companies

Corning Glass

1851

America’s Oldest Companies

Levi Strauss

1853

America’s Oldest Companies

Anheuser-Busch Co.

1860

Bacardi

1862

America’s Oldest Companies

World’s Oldest Companies

Kongo Gumi

578

Hohsi Ryokan

718

World’s Oldest Companies

World’s Oldest Companies

Fabbrica D’ Armi

Pietro Beretta –

1526

World’s Oldest Companies

Kikkoman

1630

William

Clark & Sons

1739

World’s Oldest Companies

World’s Oldest Companies

Waterford

Wedgewood

1759

Rules of the Family Business

If it is not written down, it does not exist Agreements not enforced are not agreements at all A decision is not made until it is acted upon You cannot have a retirement plan in place too soon

It is important for family members to have clearly defined and separate roles within the business, community, and their own lives If an owner does not want to succeed power, MOVE ON!

Family Business vs. Family Baggage

Family business conflict can be very healthy for both the company and the family

Don’t forget the spouse

In planning, it cannot be equal, but it can be fair

Sometimes we say the wrong things for the right reasons

Family members should only be compensated and retained by performance

If it cannot be measured, it cannot be monitored

There are no secrets in the family business, but there may be a conspiracy to protect shared fears. It will grow in darkness until someone turns on the light

THE SPOUSE

Personal Growth IssuesMaslow Third Force Psychology

In our society, most basic needs are being met

You cannot grow by having these needs met additionally

“A musician must make music, and an artist must paint, a poet must write, if he is to be ultimately at peace with himself. What a man can be, he must be. This need we may call self-actualization…It refers to man’s desire for self-fulfillment, namely to the tendency for him to become actually in what he is potentially: to become everything that one is capable of becoming…

Personal Growth IssuesMaslow Third Force Psychology

Don’t be forced into a role you are not comfortable with

Members can be tested for positions, although everyone in the family already knows the answers

Don’t confuse your identity with that of the firm’s

The business is a means to an end

You can use family assets to help other family members self-actualize outside of your primary business

Maslow X-Y Theory How you view employees internally will have a direct impact on how you deal with them externally

The challenge is to build an environment and philosophy where motivated people are willing to make a maximum contribution

Our policies and procedures speak volumes regarding our assumptions about people.

Rich’s Star Employees

When It Works

Family business takes much

communication, planning and

understanding

The family business is just

one of many adventures in life

The family business can be a

very rewarding experience and help the whole family unit self-

actualize

The family business is the most gratifying of all business experiences. No other business model instills managers and employees with more commitment, passion, and sense of history in the business. When done correctly, there is no greater pleasure than watching the growth, development, and success of the family members working together.

Don Boone Once Said…

“I want to give to other family members the same opportunity to build a

business that I had.”

Family Succession:

Fantasy vs. Reality

Chief Executive Boards International

Saturday, April 16, 2005

Richard D. Geib II, C.F.S.P.