Resistance to change in any business is common. Often the family system of advice and solutions is informal. Change happens, whether planned or not. Enhancing this system will reduce the key pain points, resulting in higher returns and more cohesive working relationships.
Among the key pain points that indicate a need for enhancing the family system of advice and solutions include:
- Lack of direction: There is no clear explanation as to where the company is heading, the reasoning behind the new direction, what success will look like.
- Inconsistent communications: Advice is unclear or conflicted, and does not support the overall business plan.
- Poor execution: Plans are not followed as discussed -- or not implemented at all.
- Indifferent employees: When changes are introduced -- or just suggested -- there is no effort to explain how it will benefit the people involved.
A 2nd generation CEO has run his family’s manufacturing company for 25 years, generating half billion in annual revenues. He’s tired and unsure of what else he wants, can or should do to improve revenues and the participation from key staff, the board, advisers and family member stakeholders. He reached out to Privatus CI30 to help him think this through and design a path forward.
How we helped the owner to achieve his objective for higher revenues and the participation of diverse perspectives of key staff and family members.
The family-centric aspects
To reinvigorate the family-centric aspects of a family business Privatus CI3O:
- Codified a set of family values to drive decisions, choices and outcomes.
- Held dedicated workshops to promote consensus-building and move toward family-driven values:
Balanced the views of the family with the board and advisory interests to build consensus.
- “Owning Our Values”
- “The Relevancy Factor”
The non-traditional aspects
To reinvigorate the non-traditional aspects of a family business, Privatus CI3O recommended and executed on:
- Creating a time frame and end goals to improve both revenues and growth in value.
- Updating the business’ mission statement to align it with family values. Identifying and measuring the value drivers and risks as a baseline for higher returns.
- Providing the specialty skills to leverage financial capital and people skills with active risk management in order to achieve higher returns.
- Implementing a conceptual framework for supporting diverse perspectives. Reviewing business governance for oversight of both business and family values.
- Holding annual strategic planning sessions so the CEO and his board, would know what to do, how, when, and by whom.
- Providing the CEO with a three-year succession plan to ensure continuity while moving the company forward -- a future focus.
How we helped them to achieve more
- Promote more cohesive and robust thinking, addressing both the technical and strategic aspects of the business.
- Cultivate a new competitive edge for the business and its defined objectives.
- Arm the family with knowledge and essential tools to facilitate more informed decision-making.
- Decide what a preferred approach to a future leadership transition looks like.
- Bond family members together by their vision or purpose regardless of their roles.
The end results
We add value and when appropriate, contribute to a client or family business bottom line, evidenced here as the CEO acknowledged: “Privatus CI3O created clarity from uncertainty. Now we have more time for what matters, thanks to the know-how, insights and professional kindness that Robin and Carl offered.”
In 12 to 36 months, revenues grew by 2.5x to $1.5billion. The business grew more than 4x to 2.1billion. This was the result of leveraging a chosen team of internal and external advisers along with active risk management.
To match the new size of the business, the c-suite and board adopted a multi-diversified framework including seats for family centric, strategic, value creation and active risk management and an external enterprise board for cultural governance, succession planning, transaction and transition planning.
For an owner, family and their advisers, we are a facilitator, a keeper of confidences, a mentor and an independent and trusted voice.
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