Family Business Dynamics Flashcards
To better understand the complexities and challenges of a family enterprise
What are the FEA Program Objectives
Family Business as a Paradox - to better understand the complexities and challenges of a family enterprise Whole-System Approach - to provide better services to your family business clients Strategies and Tools - to help families navigate the complexities they face Content Consulting and Process Consulting - to provide a clear structure. process and tools Strategic Advising - to augment our technical skills with human and social considerations related to the family enterprise Multi-Disciplinary Team Advising - to network and work with other family business advisors from a variety of different disciplines
What is the difference between “Family Business” and the “Family Enterprise”?
We often talk about “Family Business” but the reality is that families have many aspects to their “Enterprise” that fall outside of the business. Each of these needs to be seen in their distinct way relative to the role that they play for the family.
What are the components of the Family Enterprise Model?
1) Operating Business Assets 2) Financial Assets 3) Real Estate Assets 4) Philanthropic Assets 5) Heirloom Assets 6) Deferred Assets
List some challenges for Family Enterprises part 1
Lack of communication Family members’ employment in the business (Merits vs Entitlement) Business transition to the next generation Manage change in both the family and the business
List some challenges for Family Enterprises part 2
Maturing business life cycle and increasing competition Limited capital to fund both family needs and business growth needs Weak next-generation business leadership Entrepreneurial leadership’s inflexibility and resistance to change Conflicts among sibling successors Disparate Family goals, values and needs
List Characteristics of a Healthy Family Enterprise
Communications are open and clear Family has the ability to resolve conflicts High trust between family members Goals and values of the family are clear Boundaries between family and business are clear Functioning independent board of directors
Approaching Family Businesses in a Systemic Way - 5 Principals
1) The whole is the greater than the sum of the parts 2) Organizations seek homeostasis: trying to keep thinks stable or the same 3) Patterns of behaviours are predictable over generations 4) Every action creates a reaction - non-linear 5) Interfacing lifecycles imply constant changes
The Three Circle Model
1) Family
Private/Traditional/Emotional/Accepting
2) Business/Wealth
Public/Competitive/Objective/Adaptive
3) Ownership
Management/Marketability/Information/Profit
Interfacing Lifecycles Model
Gersick Model
Interfacing Lifecycles -
The Family Axis
- Young Business Family
- Entering the business
- Working together
- Passing the Baton
Interfacting Lifestyles -
The Business Axis
- Start-up
- Expansion/Formalization
- Maturity
Interfacing Lifecycles -
The Ownership Axis
- Controling Owner
- Sibling Partnership
- Cousin Consortium
Interfacing Lifecycle Model
Kets de Vries Model
The Business Circle -
What are some Business Circle Issues?
- Role clarity
- Compensation
- Business performance
- Business growth
- Functioning Board of Directors
- Inability to seperate business and personal things
- Work/Life balance
- Leadership development
- Intergenerational dynamics
- Management succession
- Risk tolerance
- Performance feedback to family members
- Common vision and goals
- Giving feedback
Family Business Lifecycle
Business change in response to markets, structure, strategy and competencies
- Courtship
- Infacny
- Go-go
- Adoledcence
- Prime
- Stable
- Aristocracy
- Early Bureaucracy
- Bureaucray
- Death
The Six Dimensions of Enterprising Families
