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Family Firms and Independent Boards

There is something about those of us who prefer freedom to security, and who build businesses with freedom to enjoy our work as a foundation stone. We don’t want folks looking over our shoulders, and we often translate that to mean we don’t want boards, and we certainly don’t want independent board members. It’s not uncommon to hear privately held company owners and CEOs talk about the painful experiences of trying to put advisory or governing boards together or to realize the benefit. What is uncommon is for those same owners and CEOs to recognize the problem may just have been centered in their inadequate recruitment, preparation and participation.

A highlight of this year’s CEO Summit at Convene, was a presentation by David C. Bentall, who shared the painful story of a substantial, family-owned business empire torn apart by the very people who grew it, blind to their own deficits until it was too late. Bentall has now devoted himself to helping other family-owned businesses manage their succession with greater aplomb. His book, Leaving a Legacy: Navigating Family Business SUCCESSion, is an excellent guiding resource, especially for family businesses moving into a second generation of leadership and beyond.

A centerpiece to it working well, according to Bentall, is a compensated, governing, well-prepared and independent board. This is very different than recruiting cronies and family members exclusively.  And…when such a board is in place, regular and high-priority meetings among family members, and their spouses, are also a must.

Pushing for this often brings the rolling of eyes and verbal protests. And yet, the burden of proof rests on the protestor. In lieu of following these best practices, how are they living as a steward of the company they are building? How can they claim to be so wise when they keep foregoing the laying of the long-term foundation to guide a company beyond their leadership?

Heat up or chill out

A recent conversation with a colleague ended with the comparison of these two commonly used phrases, and an “Aha!” type of insight.

HEAT UP – What we want to happen when we are enacting strategy.

CHILL OUT – What we want to happen when we are figuring out mission, vision, values and goals that lead to those strategies.

It is not a good idea to get them confused!

Heating up adds fuel, combusts, gives warmth, attracts a crowd.

Chilling out — condenses, reduces, solidifies, and slows.

Another way to understand this is to consider fog. Fog isn’t warm enough to evaporate and it isn’t cold enough to solidify. It is in between. When we face a tough and confusing issue in business, we may feel foggy. What to do?

We do well to chill out first, and then begin to heat up.

If we start acting before we’ve reduced a critical issue to its essence, people end app working frantically, and not from a common understanding. In such a case, heat leads to destructive forms of conflict, regrettable actions and/or reduced profit margins.

Chilling out is a way to get to the:

  • WHY are we working at this?

  • WHO will work at this, WHO supervises them, WHO needs to be consulted, WHO holds decision power over this, and WHO is funding this?

  • What is the criteria for our success?

  • WHEN must the work be completed?

  • WHERE will the work be done?

  • HOW will we proceed from here and in what order of steps?

Chilling out in this way helps all the key players collect the fuel needed to heat up and to do it together, from a common point of reference. Heating up happens far more efficiently that way.

Yes, it probably feels silly to ask, “Should we chill out or heat up?” when faced with a big one. But before completely rejecting this idea, you might ask yourself what question you are asking (or not asking) in its place.

The Only Legacy That Really Matters

2016 is a banner year for me – it is the year I technically become a senior citizen – at least in the eyes of the government. I have to admit that I’ve enjoyed the “senior discounts” for quite some time at movie theaters and other venues – but I still cringe when I ask for it. Putting my vanity issue aside, I have begun to think about what it means to reach this milestone. I have been asking myself, “Does wisdom really come with age? Do I deserve more respect as my hair thins and turns gray? How should my priorities change – if at all? And of course – is it appropriate for me to buy slim-style jeans?

But the most important question I’m asking is, “What is the legacy that I’m leaving?” It’s funny, I never really thought about that question when I was in my 30s or 40s – but sometime around my late 50s I started to think about it. Now I’m wondering why it took me so long. I think that if I had asked that question earlier I would have made some major adjustments in my portfolios when it was easier and when it might have made a bigger difference.

You are probably thinking that I’m speaking primarily about finances – that’s what most people think about when we talk portfolios and legacies. But actually I’ve come to realize that there are many portfolios that make up our legacy – and financial is not the one that makes the biggest difference.

It is my spiritual portfolio that makes the biggest difference in my legacy. It drives all the rest – financial, family and social.

If we look at our legacy as the inheritance we leave to our family, friends, colleagues and business associates then it’s put in the right light. Our legacy not just what we leave behind but what others inherit from it.

The Bible has a lot to say about inheritance – some about property and possessions but a lot about eternal inheritance. When we look at the heart of all of them we see that they are built upon Jesus’ legacy to us. So ours should be built upon God’s foundations – not our own.

If I place a high priority on being a servant to others, then those people I serve inherit my legacy of kindness and helpfulness. Alternatively, if I am selfish with my time, money and devotions then others will inherit my legacy of self-centeredness and narcissism.

And what makes this so important is that what we inherit many times determines how we develop our own legacy. That alone gives us a good reason to prioritize the foundations of what we leave behind.

2016 is not just a milestone for me – it can be one for all of us. You don’t have to be turning 65 to rethink the priorities of your spiritual portfolio. In fact, do yourself, family, friends and business associates a favor – do it now. Start this year with a reassessment of your portfolios that will make up your legacy – one that will have an eternal difference for all who inherit the gifts you have been given according the the only legacy that really matters.

HOW DO WE USE THESE SHORT LIVES FOR LASTING PURPOSES?

That question is the title of chapter 12 in a  book recently co-authored by a good friend who is also a good friend of Convene.  He has recently turned 40 years of age.  I am 75 years of age—nearly twice his age—but his question resonates with me and his book has caused me to  reflect on the value of thoughtful/prayerful career planning—which I did not do properly .  In fact I have found the book to be useful as a self-diagnostic  tool but the authors do not offer a “time reversal” process to aid we older readers. At 75 I am blessed with reasonable health, a beautiful wife in our  54th  year of   marriage, a  precious family, chair responsibility for two Convene Teams and a very active corporate life.  When I consider that question each day—my response is “Thank You Lord for Keeping Me in the Game!”    “But why didn’t I do this sooner?”

The joy and opportunity I gain from our Convene Teams far surpasses  the joy and blessing I received from earlier duties  as CEO,  Chairman, Professor,  or corporate officer roles.  Building into the lives of other leaders brings  greater satisfaction than building the financial balance sheet.  Both building activities are essential and valuable— I guess it is age that allows a better appreciation of the relative value of building human capital compared to building industrial/financial capital.

Solomon raises this same question in   Ecclesiastes 1:3-- What do people gain from all their labors at which they toil under the sun?

I know the my co-author friends  answer –at his  age—is quite different, and that is what motivated him to write the book.  His writing appeals to all of us to carefully consider what God wants us to be doing next.  In careers where we practice leading and visioning—we must take time to consider or we may miss God’s better plan for us.  In fact Chapter 7 of the book is titled HOW DO YOU STOP AND REST BEFORE GOD STOPS YOU?

The authors use Ecclesiastes as the framework for guiding the reader on this clarifying journey.

Do your self a favor—put this book on your reading list—40/40-Vision-Clarifying Your Mission in Midlife—Peter Greer and Greg Lafferty.

www.publishersweekly.com/978-0-8308-4434-0

Don’t wait till your 75 to read it.

What’s Your Son’s Reputation?

Over the holidays, my 25 year old son was playing in a 3-on-3 basketball tournament with some other guys his age, as well as several men I know that are a bit older.  With two of my younger ones in tow, and with the event running late, it was time for us to leave.  As I said my goodbyes to the men I knew, all (yes…each and ever one) of them said some version of: “It was great to see you Michael.  You’re son, though…he is staying, right?” Certainly, he has an established reputation as a much better athlete (and plenty of other good traits) - and I don’t blame them at all for wanting him to stay.  I’d have asked the same thing.

It did get me thinking - when do people want me to stay?  What are the things they want me around for?  When do they not want me around?  When would they prefer someone else?  Am I ok with the answers?

Maybe those are good questions for us all.  As I reflect on them, they give me a bit clearer focus for 2016.

P.S.  As a side note, if you feel you’d like to pursue a more intentional plan for having rites of passage for your son, drop me a line (mpowers@convenenow.com) and I’ll send you a brief outline of what we did for our sons as they grew.  It might spark some ideas of your own.