INTRODUCTION

Life is full of challenges. When we decided to incorporate our company, and work exclusively with family businesses, we wanted a name that truly described what we do. “Challenges” was the name that immediately came to the minds of our daughters, Jennifer and Julie. We liked it but began to second guess it. Webster defines challenge as confrontation and, while that may be a fit for many families in business, we did not think that described exactly what we did.

We decided to do a little more research. While a contest, competition, dispute and confrontation are some of the definitions associated with challenges, and present in all family businesses, we found that the meaning went deeper. A test of ability and skill, taking on something new and different which requires change, effort and determination—all added together, brought us closer to the definition we were looking for. This deeper meaning included a conscious commitment to change, to try new things, even when they stretch an individual’s abilities. We knew we had found our name.

We then decided to use the name as an acronym. First, to identify the steps of our process, and next to identify, for ourselves, how each would tie to our biblical principles. C.H.A.L.L.E.N.G.E.S., Inc. was born.

Our family business C.H.A.L.L.E.N.G.E.S. process is identified in the titles of chapters two through eleven. Each process offers lessons learned from working with families in business.

Lessons shared by true stories can be effective teachers for each member of a family business. The family business stories in this book cover a variety of C.H.A.L.L.E.N.G.E.S. while offering practical, objective solutions

to the challenges each family business faces. Names and descriptions of the families and businesses identified in this book have been changed to maintain their privacy.

 

Transforming Family Businesses is an accumulation of stories, based on actual events of families who work together. Each story is a representation of a step in our C.H.A.L.L.E.N.G.E.S. process. We have written it for four major reasons.

The first is our passion, our mission, to help more families in business survive from generation to generation by implementing a process that has proven to be successful. A process and passion that we believe is our charge in life to pass on to others. A process and passion that is guided by

our practice of our Christian values and our responsibility to demonstrate those values to others, by our attitude, words and actions. The second is our desire to teach families in business how to better understand the importance of dealing with the individual emotions of family members. Emotions that will have a major impact on relationships, longevity and the success of the family business.

The third reason is to introduce families in business into the FAMILY FIRST process and coach them how best to make use of it. Our fourth reason is to help stop the erosion of family businesses. The Family Firm Institute and other publications have stated that two-thirds of family businesses do not make it past the second generation. This is unacceptable, and we want to help lengthen the life of family businesses.

For families in business to survive a transformation must take place, changing the majority of families in business who believe that dysfunctional is normal. In the years I have been dealing with families in business I have yet to meet one that, in some way, doesn’t view their family business as dysfunctional.

One family business we worked with described family businesses as “tricky.” The relationships between working family members can be easily stretched, and even broken, because of unaddressed emotional issues. Tricky when the business is being run by family rules instead of business policies and procedures. Tricky  when there is disrespect, dictatorships, conflict, overblown egos, and distrust. Tricky because many emotional and operational dysfunctions of the family are described as “normal” by most family businesses. The tricky and dysfunctional issues are addressed in each chapter of this book through the true stories described. If family businesses are to lower the failure rate and beat the odds of being another statistic, they must transform from the dysfunctional to the extraordinary.

In working with families in business we have learned that the commitment of each family member to the success of one another—what we call FAMILY FIRST—reduces the risk of family business failure. Learning the process of how to discuss and commit to FAMILY FIRST within a family business, while implementing its principles, has proven to draw families closer together, and help businesses be more successful. The process and its principles are developed for you in the pages ahead.

Loving parents, even loving families, when dealing with the emotions brought out by working together can at some level always be called dysfunctional in the way their challenges are addressed and dealt with. Dysfunctional in the way they communicate and interact with one another. Dysfunctional when it comes to fairness, trust and loyalty. This book will show you how to transform from the dysfunctional to the extraordinary. Each chapter of this book includes a story that identifies challenges a specific family in business is dealing with. Each story offers suggestions on the “how to’s” that can help the family improve relationships and the business be more successful. Each chapter identifies what the family decided and the impact of their decision—or lack of one—on the family and the business.

 

When your family reviews each story, studies the decisions made, and learns how those decisions transformed the business, your family will become aware of new options to make your business more successful. In each chapter there are ideas for discussion (known as Kwaiserisms) that can be used to open up the communication and begin addressing your family’s C.H.A.L.L.E.N.G.E.S.

 

With our combined experience of over 60 years in working with hundreds of families in business, we have observed what works and what does not. The following pages can help your family to understand the experiences of other families in business and how they dealt with their challenges. The experiences described in these stories will also help with your objectivity as they enable you to understand the options available, how the decision were made, and what the outcome was, good or bad. Each family decision is impacted by the emotions of the family, the changing market, the type of business and the make-up of the family members. Learning from others who have gone through these challenges is the best way to adapt to each situation for the benefit of your family and business.

Many of the families we work with pray together before meetings, major decisions and when planning direction. We agree with and encourage this practice as we understand and believe in the power of prayer. We have observed what prayer can do and experienced it as well. It certainly can’t hurt!

We  have also included a list of  reference books, newsletters and websites used for material in this book.

We know that the information provided, along with the commitment of your family, can help you family identify the best, most practical way to transform your family business from dysfunctional to extraordinary. Thanks for choosing our book let us know how we can assist your family and your business.

                                                                        CHAPTER 1

                                                        JUST GET ALONG

                                           From dysfunctional to extraordinary by putting FAMILY FIRST

 

“Just get along” is what moms say to their kids. As a family business moves from one generation to the next we find that mom was right. To be successful, families in business together must find the right ways to “Just get along.” Common sense and practical experience tells us that a business, especially a family business, would be more successful, more innovative and more productive if everyone in the family just got along better.

Unfortunately, for most family businesses the mindset is, “We are normal; we’re dysfunctional.”

 

 

THE JACKSONS

Steve and Debbie Jackson worked together in the family business with their two sons, Ted and Stuart, and a daughter, Kathy. The adult children did not get along, but they hadn’t started out that way. In the beginning, all five came to work early, took their jobs seriously and stayed until the day’s priorities were accomplished. They all had their individual jobs to do, and their full schedules most days left little time for one another. The tasks, the job, and the business became priority. They did meet once a week for a business update from Steve.
 

The rest of the time Debbie, Ted, Stuart and Kathy worked under the direct supervision of Steve.

 

The Dysfunctional

Steve felt that separation of his children, in responsibility and direction, would help them avoid the conflict that he felt had destroyed the relationships and companies of other family businesses he knew. Yet, as is usually the case, the more the family members in a business avoided one another the more suspicious of the intent of one another grows.

When sales and profits began to decline, the siblings started to blame one another. They did not know how decisions were made by the others, would only place blame on the other divisions and not their own, and argued for what they felt was right for themselves instead of what was the right decision for the

company. They pulled further apart. Their families did not come together for functions other than weddings and funerals, and even then, there was little interaction.

Debbie was devastated. She always wanted a family who loved one another, protected one another, and got along even with the extended family. She wanted to see all her children and grandchildren as one close, happy family. She was ready to have Steve sell the business as it seemed to get in the way of her desire to have her family “Just get along.”

Stay tuned for the rest of the story.

 

When families make getting along better a priority by placing FAMILY FIRST, we have found that their businesses do better as well. This is because they will reach consensus on decisions faster with total family buy-in, while blending the family and the business. FAMILY FIRST adds to the understanding that the success of each family member is based on the success of everyone in the family. They then strive to assist each other in being the best they can be. You will read more about the importance of FAMILY FIRST throughout the upcoming chapters.

“Just getting along” is not as easy as it may sound. Families have curious ways of dealing with one another.

 

KWAISERISM: "IT IS NICE TO BE IMPORTANT - BUT IT IS MORE IMPORTANT TO BE NICE!"

 

When the children are young the parents  repeatedly tell them how much they are loved and shower them with hugs and kisses. Even brothers and sisters may hug each other and often tell one another that they are “best friends.” As each grows older, the times for sharing their love for

one another become few and far between. They get used to other parts

of their lives getting in the way of their family relationships. In a family business, poor communication can lead to lack of trust as well as strained and split relationships. Why do we let this happen? Let’s switch gears for an explanation.

 

The Extraordinary

FAMILY FIRST is a conscious act by each member of the family to place the feelings, needs and success of other family members before their own. FAMILY FIRST should be the priority before each business decision is made. The decision-maker should consider how any decision may affect other family members, and if it will be in the best interest of the family and the business. If the decision does not benefit both, the family needs to be consulted first. FAMILY FIRST is when there is unconditional trust of the motives behind each family member’s decisions, and the understanding that no decisions are being made for personal or selfish reasons.

 

If families are going to get along better, they need to get to know one another better. Do we really know what the others believe in? Have we taken the time to find out? Spending quality time with one another, learning about the beliefs and values of each family member, helps us find common ground to “just get along.”

All family members do not think alike nor believe in the same things. They do not always have the same points of view. When they don’t acknowledge these differences, they won’t get along. When they do acknowledge these differences as well as the right of each family member to have his or her own opinions, getting along becomes easier.

Out of love for your family, you know when to “bite your tongue and taste the blood,” to move away from those areas that will keep you from getting along. Debate is okay, even arguing sometimes. But these are not okay when they rise to a level of emotional harassment that may severely strain or break the relationships.

This subject of “just getting along” caused me to think more about quality time with our families. We seem to make less time for the living and yet we will go out of our way to honor them when they are dead. I believe that “just getting along” must include spending more quality time with those we love.

 

We take time to remember those who have passed, but we need to remember how we got along with them when they were alive. The following story is offered for your consideration as an example of love, respect, honor and maybe even a little guilt for not being with a loved one when they were alive, just because the weather is bad, or the timing is not right.

 

FROM JIM KWAISER

My mother passed away in Saginaw, Michigan in December, and on the day of the funeral the weather was rain and turning to snow. Yet people came from out of state, from Northern Michigan and other distances to pay their respects, even though the driving conditions were not the best. I began to ask myself,

Why? Certainly, they loved my mom or were close enough to one of the remaining family members to come and pay their respects. But why now? Why at the funeral?

People will travel many miles for many hours to attend a funeral. But when it comes to visiting someone when they are alive, they have many excuses as to why they cannot take the time. Why do they wait?  Wouldn’t  it be better to visit people when they are alive? Not only the deceased, but the other relatives that we have not seen or visited in years—or at least since the last family funeral!

 

THE JACKSONS, PART TWO

Debbie kept at Steve to do something to bring the family together. She saw her family splitting further apart and wanted that to stop. We were contacted to discover if we could help. We found jealously, distrust and an “I am out for myself” attitude among Ted, Stuart and Kathy. Stuart was the most extreme as he felt he should be running the company and have the highest compensation package.

We asked each of the family members to commit to weekly facilitated communication meetings. The objective was to have conversations about all challenges before major decisions are made, using consensus whenever possible, and to allow no surprises for any family member. They were to be informed before actions took place. They were not to openly speak critically about another family member or allow any employee to do so. We also had them schedule one on one meetings with one another, for better understanding of each other’s wishes for the future and what they viewed as their role in it.

These techniques, along with facilitation of meetings and planning sessions, combined with a realistic view of how succession would impact each of them slowly, moved them toward mutual commitment and respect. They began to spend more time together as part of the process and found that they liked one another’s company. The most difficult part pertained to the in-laws who lived with years of negativity about the family and now were asked to let all those feelings go.

Steve, Debbie, Ted, Stuart and Kathy are getting along better. The grandchildren have adapted to renewing their relationships with their cousins. The in-laws are not quite there yet, but the rest of the family is hopeful.

 

Other Thoughts

Just taking the time to ask yourself why relationships may be strained in your family and look realistically at what role you may being playing in that strain, can move relationships to a more positive position.

 

Relationships take work and we all need to take the time to renew our relationships with friends and family. Don’t take your family relationships for granted. You can transform dysfunctional family relationships into the extraordinary by family commitment, open communication and the very strong desire to “just get along.”