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Key Ideas Newsletter . April . 2004 

 
Key Ideas for Family Businesses & Their Advisors
Brought to You by Jane Hilburt-Davis & Key Resources

At the beginning of this spring season, Key Ideas brings more resources for family businesses and their advisors.

In this issue…



Keys to Success
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.

Read the Full Article >


Tips & Tools
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'.

Read the Full Article >


What 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 contact@familybusinessconsulting.com, 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 to contact us with feedback, questions or comments.

Until next time,

Jane Hilburt-Davis

CONTACT US:

Key Resources
40 Middleby Road
Lexington, MA 02421

Phone: 781-861-0586
Fax: 781-862-3499
E-mail: contact@familybusinessconsulting.com
Web: www.FamilyBusinessConsulting.com

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