avoiding and resolving conflict in the family business · avoiding and resolving conflict ......
TRANSCRIPT
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Avoiding and Resolving Conflict
in the Family Business
Henry Hutcheson
President
Confidential Family Business USA
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➢ Consultants to Family and Privately-Held Businesses
➢ Objective: Preserve Wealth and Maintain Family Harmony
➢ Background in Psychology, Business, Family Business(Olan Mills)
➢ Family Business Correspondent➢ Author: Dirty Little Secrets of Family Business➢ Adjunct Professor Campbell University
Confidential Family Business USA
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• Founding• Door to Door• Studios/Demographics• Telemarketing
• Family Business• 1st to 2nd
• 2nd consolidate• 3rd (Hutcheson)
• New 3rd
Confidential Family Business USA
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Available through:Hudson BooksellersBarnes & Noble.comAmazon.com
Publisher: Greenleaf
Available: March 22, 2016
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Good Newsor
Bad News?
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“He and four siblings
are locked in legal battle
with their father.”
Pablo Alvarez of Vega Siliciawinery.
July 20, 2014 (Ian Mount)
Vega Sicilia’s wine is triumphant, but its ruling clan’s bickering has been leaving a sour taste.
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THE RIFT— a family dynasty fights
over the future of Luray Caverns
By Ken Otterbourg March 14, 2013
Worth about $20 million, it is a family business run by a family that can’t get along.
They’ve been in U.S.
District Court in
Harrisonburg, where the
three youngest siblings
sued two of their older
sisters
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Inside An $8 Billion Family Feud: Who Poisoned The Orkin Fortune?
Today RPC boasts a market cap hovering above $4.6 billion.
Kids suing Father and
Uncle
One lawyer has already
made $1 million
Forbes 9/29/2014 @ 6:00AM
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Dad Son
Conflict
Family Business USA
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Mom
Dad Son
Triangulation
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Mom
Dad Son
Triangulation
Resolution
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An attitude or behavior that you are deserving of respect and privilege beyond your skills, knowledge and experience, because of who you know or what you have, not what you have accomplished.
Can be considered dangerous as will have unfounded or overconfidence, be reluctant to hear good outside input, and will have trouble being accepted by those who earned their way.
MAKE THEM EARN IT (but don’t overdo it either)
Entitlement
Confidential Family Business USA
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Diddy Buys Son $360,000 Maybach for 16th Birthday
Talk about a sweet 16.
For his 16th birthday, Diddy gave his son Justin Dior Combs a brand-new silver Maybach (price tag: $360,000).
"I'm just ecstatic right now," Justin told UsMagazine.com at his party, which will be featured on an upcoming episode of MTV's My Super Sweet 16. "Words can't even describe how I feel. I'm so blessed and thankful for all of this.“
Diddy said his son's elaborate bash is in stark contrast to how he celebrated his 16th birthday back in the day.
"I don't think I even had a party!" Diddy told Us. "I think I had a cake -- and that was it!"
But Diddy said he was happy to open his wallet for Justin.
Diddy told Us he's so happy how his son "has grown and matured ... how well-behaved he is; how respectful of a kid he is. It just makes me proud.“
Us Weekly, January 25, 2010
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Financial
Uncontrolled spending/Trust Fund babies
Intellectual
Lack of ambition
Identity wrapped up in money
Emotional
Lack of Self-Esteem
Dependence/Entitlement/Guilt
Unintended Consequences of Wealth on children
Richard Morris, Jayne Pearl
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Handle hearing “no”
Differentiate between wants and needs
Tolerate delayed gratification
Make Tradeoffs
Develop a healthy skepticism
Five Financial ValuesMake sure your children learn to:
Richard Morris, Jayne Pearl
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Warren Buffet
“…children should be given enough money to do anything they want,
….but not so much money that they can do nothing.”
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❖ Create Your Own Family “Code of Conduct”
Family BusinessBest Practices
Confidential Family Business USA
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❖ Be on time
❖ Not globalize issues - i.e. you always, you never
❖ Not engage in personal attacks
❖ Not scream, yell, shout pound, point.
❖ Not make threats to each other.
❖ Recognize personal and business boundaries
❖ Show honor and respect for each other
❖ Actively participate in discussions
❖ Practice the “Golden Rule”
❖ Speak only for yourself and not bring others in as support for your ideas or agenda
❖ Turn OFF cell phones
❖ Practice active listening, not interrupt, hold our retorts until the other person has finished
❖ Be brief and to the point
❖ Be honest, forthright, candid
❖ Focus on problem, issue or behavior, not individual
We Agree to:
Code Of Conduct - Sample
Confidential Family Business USA
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Generations are always different
What Current Generation needs to know about Next Generation
– Constant need to have a meaningful life
- to accomplish something on their own
- You must give them opportunities, even if they fail
- No they cant just be happy with the money and the title
- They know more about technology
- know more about a lot of things
Next gen to know about current
- They built this thing, no its not perfect, but they deserve respect
- You will get your chance
- Stepping back will be hard, don’t push too hard
- Don’t push too hard on new ideas and technology
Agree with each other that you are different
Generational Conflict
Confidential Family Business USA
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Same Generation StrategiesSiblings, Cousins, In-laws
1. Put Childhood in the Past
2. Define Roles and Responsibilities
3. Establish Communication system
4. Don’t let disagreements fester
5. Agree $ and Benefits inside and out
6. Understand each other’s goals
7. Incorporate some fun
Family Business USA
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Dedicated to Improving Communication
Family BusinessBest Practices
Confidential Family Business USA
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Family Business USA
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If I heard you correctly, you said
…………………
Is that Correct?
If Yes, then great, move on
If No, clarify using active listening
Active Listening
Confidential Family Business USA
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❖ Policies And Systems – i.e. Financial, Handbook, Ethics, Vacation, etc.
❖ Agreements – Up To Date Shareholder, Buy/Sell, Family Employment policy, Written Succession
❖ Board – Independent Advisors
❖ Regular Family Business Meetings
❖ Disciplined Approach
Governance - Communication
Confidential Family Business USA
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Confidential Family Business USA
Questions?
Thank You!!!!!