by David Bork
I have just returned from Brussels and the Annual Global Conference of The Family Firm Institute. This is an organization of diverse professionals who are serving the needs of family enterprise. As part of the conference the members make presentations about cases, researchers discuss studies that are completed or underway and there is a host of informal exchange among those in attendance
One of the continuing themes in all the discussion is the importance of dialogue and interaction among family members. In one session, a group of researchers discussed the question, “Family Constitutions – do they really help the family?” Their study was very clear: the constitutions made a powerful impact on the way the family interacted over the business, but MOST important were the discussions that family members had around creating the constitution.
In Spain and in other European countries there has been a heavy emphasis on creation of a protocol for the family business. Protocol and constitution are similar in that they define the ground rules for the governance of the enterprise. On the way to this emphasis, these countries have found that now they must go back and focus on the interpersonal relationships and the communications between and among family members for it is in those communications and relationships that the real success of the family enterprise resides.
Think of any relationship you might have. That relationship has a “bank,” meaning that you must make deposits in your relationship bank so when the time comes and there is a stress in the relationship, you have a reserve in your relationship account upon which you can draw. With this understanding, it makes sense for a family to find as many ways as possible to build and enhance the relationships within the system. One way to do this is for multiple family members to attend conferences and workshops on family business – much like the daylong conference offered by Capital Magazine and scheduled for November 19, 2012. When multiple family members attend such a conference, they hear the presenter put forward ideas that may be new and different. Then they have the task of discussing the ideas and determining what, if any impact or usefulness they might have for the family.
The Family Business Network, FBN, is an organization by and for family-owned enterprise. They have been in existence for some time and recently more than 800 members gathered in London for their annual summit meeting. At this meeting there were presentations and virtually unlimited opportunity to network with other families. A chapter of FBN has been recently formed in Turkey.
In Spain, the tax laws were such that they had a strong negative impact on family business when the time came to transfer ownership. This lead to the creation of the Instituto de la Empressa Familiares, the Institute for Family Business, essentially a lobbying group to work in the political arena. There are chapters of this group all over Spain. They banded together and go the onerous tax laws changed. Today they continue to meet to educate and inform members about how best to operate their business to assure both a strong family and a strong business.
You may ask, “What kinds of courses should we attend and where are they offered?” Here are some ideas:
Families need to talk about money and they need a common language to do so. Several business schools in Istanbul offer a course titled “Financial Management for Non-financial Managers.” This basic course puts forth the fundamentals, the mechanics of record-keeping and management of such matters as cash flow. If several family members take the course at the same time, they will develop a communication base, a foundation for interaction on the finances of the family business.
We all know that communications are critical to success of a family business. Communications training of many types are offered by many schools in Istanbul. If two or more family members take the course together, they learn the same package of skills, which they can take back to the extended family. The value lies in learning together and then bringing it back to the family.
If a family is willing to learn new things, then it is highly likely that they will be successful in the business. This is because they are constantly looking for ways to improve and enhance the
operation of their enterprise. They try new methods of operation and they stay on top of developments in their sector or industry.
This is in contrast to those that become static, stuck in the old ways, “We have always done it this way…” Soon these businesses become obsolete and the competition has stolen their market.
Nearly 25 years ago I identified the ten qualities of families who remain positively connected and in business. One of them was this: “Willingness to learn and grow.”
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