Balancing interests of family members, staff and advisers reduces stalled decisions and outcomes and enhances relationships. The result is families that can agree and/or constructively disagree. When advisers and staff adapt to supporting family interests and agreed outcomes, relationships are likely to endure across generations.
Pain points that indicate a need for balancing interests:
- Family members and their advisers are not on the same page.
- Owner’s or CEO interests are not being heard.
- Family members can’t respond to their advisers. Among family, staff and advisers, there is no agreed purpose.
A four-generation family owns a digital technology company with annual revenues in the high six figures. It is presently under the control of the second generation (G2). The (G2) CEO wants to assure a successful transition of the business to the third generation (G3), yet the younger generation’s advisers believe it would be easiest to sell the business and give the adult children cash. The CEO could not respond to this advice, as preserving the business was of paramount importance to him.
The CEO was uncertain of how to move forward and G3, the adult children were divided between G2’s intention and advisers’ recommendations. The transition was in danger of stalling out. Thus the CEO reached out to Privatus CI3O for an independent, neutral voice.
How we helped the owner to achieve his objective of a successful transition of the business to the third generation of family, (G3).
Generational owners have their own priorities and values. This section provides answers to the challenges and family priorities and values.
To achieve consensus and move toward family driven values, Privatus CI3O puts on specialty consensus-building workshops: “Owning Our Values,” “The Relevancy Factor,” “Legacy versus Liquidity.”
The family-centric aspects to a successful transition of the business
- Held two 1-day workshops on owning values and the relevance of “importance” to family relationships and consensus building.
- Identified the super values of individuals with the adult majority determining those that form an initial set of family values to build upon.
- Privatus CI3O jointly identified the values to serve relationships, the business and future transitions of the business.
The non-traditional business aspects to a successful transition of the business Privatus CI3O
- Facilitated strategic planning of the business transition and leadership succession, along with defining end goals and establishing a vision of what success would look like.
- Cultivated strategic thinking amongst the new leadership. Monitored value drivers and risks during and post-transition to assure no blips in revenue or value occurred.
- Reshaped purpose of the board, governance and risk management practices.
- Recommended annual strategic planning to keep business and family vision in focus and goals on target.
- Reshaped the business strategy to resolve more complex business issues of today.
How we helped them to achieve more
- Promote more cohesive and robust thinking, addressing both the technical and strategic aspects of the business.
- Facilitate a smooth business transition without a blip in returns or performance.
- Enhance decision-making by providing the family with multiple inputs and options.
- Position the business to leverage capital and the new leadership with purpose, strategic planning, and strategy to execute.
- (G2) CEO became a Steward working on the business and as Chairman of the new board.
- Two (G3) family members became the new leaders and equity stakeholders. One (G3) member elected to be a voting shareholder. All were bonded by the family purpose and values.
The result of our efforts
We add value and when appropriate, contribute to a client or family business bottom line. This was evident here as this owner and family acknowledged “our transition to G3 is assured with full awareness of our options, longer-term outcomes as well as what a vision of success would look like. Our family, our values and our business remain intact. We are so grateful for the language and tools needed that Robin and her team provided.”
For an owner, family and their advisers, we are a facilitator, a keeper of confidences, a mentor and an independent, trusted voice.
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