Successful Family Meetings: A Critical Foundation for Business Longevity

Successful Family Meetings:Northeastern University
A Critical Foundation for Business Longevity

Family Business Quarterly

One of the best ways for keeping family members committed to their companies, as well as dealing with the inevitable conflicts that get in the way of long-term success, is to hold regular family meetings, argued Drew S. Mendoza, Program Director of the Family Business Center at Loyola University, Chicago.

Mendoza recently traveled to Boston to lead a Half-Day Forum on “Holding Family Meetings: The Whys and the Wherefores” for NUCFB members. Through presentations and small-group discussions, he provided guidelines for “winning at family meetings” to enhance the family spirit that he termed “critical” to keeping the business alive across generations.

He distinguished family meetings from meetings of boards of directors, which he also deemed important for continually evaluating a business’ strategic direction. Family meetings, he said, should be designed to “build enough trust to make hard decisions” on such subjects as estate planning, succession timing and wealth management. “Life is made easier if we talk about transitions before they happen,” he noted.

Mendoza offered a formal definition of family meetings found in Family Meetings by John Ward and Craig Aronoff. They define family meetings as “a regular assemblage of family to educate, communicate and reach consensus on the purpose and responsibilities of the family to itself and its stakeholders and to plan activities which reflect our purpose and responsibilities.”

Following are guidelines he offered for successful meetings.

  • Include everyone.A key question for family members wanting to eventually involve their children in the business is, “How can we make this look like fun for our kids?” Mendoza said. For that reason, he advocated inviting spouses and in-laws to family meetings to enhance their commitment to a business that was not originally theirs. This is especially crucial, he said, when family members are complaining about specific problems at work involving siblings or cousins, but don’t express their positive feelings about the family firm. Spouses need a broader perspective to keep their own positive attitude, especially so that they don’t inadvertently pass unfounded negative opinions to their offspring, he noted. 
  • Set ground rules. Resolve to prevent family meetings from becoming gripe sessions, arenas for personal attacks or therapy for “needy” members. Establish realistic meeting times and durations, and stick to them. 
  • Use meetings for family education and communication.Family members can educate themselves on a range of issues, including conflict resolution, listening skills, the history of the family and the business, the role of the board, and strategic planning and business valuation techniques. There can also be close communication on a variety of personal and business topics–from individual and family values and dreams to dreaded “what if?” topics (the disposition of stocks if there is a divorce, the consequences of a family member’s breaking the law, etc.). Goals in choosing topics for discussion should be to enhance family members’ ability to work together and to achieve consensus on critical business issues before disasters force hasty and unwise decisions. 
  • Be patient.“Habits and patterns of families tend to be about five generations old and take time to change,” Mendoza noted. Family members may require long periods of time just to enhance their listening skills so that they can improve overall communication. If too many negative habits impede progress, find an outside facilitator whom the family will trust, and who will prevent irrelevant hidden agendas from destroying original meeting objectives. 
  • Change the lens and reach for a vision. Use family meetings to focus members on their responsibilities, rather than their rights, he said. Ask yourselves what you want your family to look like in 20 years, how you want siblings to relate to one another, and what you’ll need to do to interest your children in furthering the business’ future. Ultimately, this discussion should give your business a competitive advantage and contribute to its continued success from generation to generation.