Shared Vision

by Leslie Dashew

In my many years of specializing in work with family businesses and families of wealth, I have found that the single most important indicator of success for these families is a shared vision. When a family shares a clearly articulated picture of the future, they have the foundation for making decisions about the use of resources, for selecting members to carry out responsibilities and for creating guidelines on how the family will function.

When members of a family understand that they are all trying to achieve the same objectives and they recognize their interdependence, they take better care of their relationships. This process is especially important for families who share ownership of active or passive assets and/or when overall leadership is shared by more than one person. More…

Business Continuity is the Prize of Succession (Part I)

Baylor
Legacies Newsletter
by Ernesto J. Poza

Three brothers run a retail chain catering to a well-defined market niche. The business is people intensive, and customer service is very important. Competition is fierce in their industry. As a rule, profit margins are low. New products and product/service combinations do offer opportunities for healthier profit margins. The brothers have grown the business four-fold in their twenty years of leadership and are now preparing for the transition to a third generation of owner-managers.

The next generation is better educated and has worked outside the family business in well-regarded Fortune 500 companies. Motivation to professionalize the firm, update its managerial practices and ramp-up the growth curve is high. The third generation is ready to use organizational and human resource systems to support increased teamwork, delegation with accountability as well as a more strategic approach to the business’ market niche.

The family is now larger. Each of the brothers has three children, expanding the potential pool of successors to nine. To prune the owning family tree, the brothers entered into a buy-sell agreement funded by life insurance. It specifically states that next generation family members need to be full-time employee/managers to qualify for ownership. This is, briefly, the business and family context in which succession is presently taking place in many family-owned businesses. More…