Key Ideas for Family Businesses & Their
Brought to You by Jane Hilburt-Davis & Key
At the beginning of this spring season, Key Ideas brings more resources
for family businesses and their advisors.
In this issue
Developing Leadership and Choosing Successors
Last year alone
over 2000 books and articles were written about leadership, repackaging
everything and everyone from Attila the Hun to Jesus to Dorothy in
the Wizard of Oz. ("She was small, meek, and young but she took
a guy with no heart, one with no brains, and one with no courage,
and created a successful team that accomplished its mission.")
What is Leadership?
Simply put leadership is the ability to inspire others to get the
job done, whether it's increasing the bottom line, climbing Mt.
McKinley, leading a reconnaissance mission, or bringing family members
to consensus on a by-laws issue. Several ingredients are necessary
for this to be accomplished: trust between the leader and the followers,
leader's credibility, a shared vision, and plan of action.
the Full Article >
Choosing the Right Advisor for Your Family Business:
Make Sure you Ask These Questions!
Did you know that only about one third survive as family owned
businesses into the second generation and only 12% make it to the
third generation? With this in mind it is clear that they deserve
and require expert advice from uniquely qualified and trained advisors.
Freud once said that all we need for happiness is 'love and work';
both are at stake in family businesses; they have much to lose and
much to gain. Yet, surprisingly, family businesses often don't ask
the right questions before they hire an advisor or consultant and
end up with advisors not equipped to deal with the complexities
they face. As one business owner (family business, by the way) claims,
an 'educated consumer is our best customer'.
the Full Article >
Would You Suggest?
Tackle This Case and Give Us Your Solutions!
Send in your suggestions and they will be published!*
What do you think Joe, Sr. should do?
Case Study: Two Brothers**
Joe Francis, 65, is faced with a difficult dilemma. The founder
of a successful rental company, Francis Footwear, he has four children,
Mary, age 42; Joe, Jr 37; Robert, 36; and Irene, age 31. Joe and
his wife Kathleen have been married 45 years. Joe, Jr. had graduated
from business school 10 years ago; he was employed by a large 'down
town' firm for 6 years, at which point he decided that he was bored
and after having joined an Internet start up that went bust, he
wanted to return to the family business. He approached his father
with a proposition. "It's clear that we need new blood in this
company. You know I'm capable. I have an MBA and lots of outside
business experience. Let's make a deal; I'll come back in, but only
as president and a plan to buy you out. This would free you up to
do what you want. Irene and Mary have wanted to buy larger homes
for their children, your grandchildren, nearer you, and Mom wants
you to retire so you can finally have some time together before
you get too old. Rob is loyal but you know he is not a leader."
Joe considered this an attractive offer and discussed it with Robert
who reacted quickly and heatedly. "Never! I've worked too hard
in this company! I came to work for you 12 years ago when Joe, Jr.
refused. At that time, you promised me a future here. I can't believe
that you're even thinking of this!"
Joe, Sr. thinks his older son's offer is quite appealing. And,
although he knows that Joe, Jr. is very bright and creative, he
worries that he gets bored easily and has a tendency to jump from
one thing to another. Nevertheless, he thinks, his older son really
seems to have matured during the last few years. And the company's
profits have been declining. Moreover, although Robert has been
loyal to his father and the company, he may not be the dynamic leader
needed to face a future where continued success may be determined
by competition and other factors beyond his control.
What do you think Joe, Sr. should do next?
What do you recommend for the business? For the family?
What will happen if Joe, Sr. does nothing?
How would you choose the successor?
Send Your Suggestions
If you send in your suggestions, we will publish them in our next
newsletter. and you will receive a copy of a Families in Business
Magazine, "Solving Problems in Family Businesses: Five
Key Questions", by Hilburt-Davis and Dyer.
Please send your responses to firstname.lastname@example.org,
or ask us if you have any questions.
* Case is disguised and co-written by Jane Hilburt-Davis
and Richard Berner, Esq. for the Second Annual Multifamily Office
Forum, New York, Dec. 1, 2003.
** Submitted responses will be published to the
Key Resources web site; Key Resources reserves the right to edit
submissions for content and/or clarity. Not all submissions will
necessarily be published, depending on space limitations.
That's all for this edition of Key Ideas. As always, feel free
us with feedback, questions or comments.
Until next time,
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Lexington, MA 02421
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