FAMILY DYNAMICS / GOVERNANCE
It was a Sunday evening when I received the call. I heard my father’s voice, but the words were not registering. Utter disbelief and shock welled up inside me. This had to be a mistake. Sadly, it was not. My Uncle Joe, 59 years young and in seemingly great health, had passed unexpectedly.
It wasn’t supposed to happen this way. Until it did.
My father Tony and Uncle Joe were quite the team. They had recognized the challenges facing the family apparel business started by their father and pivoted. In its place, they built and ran a successful software company with a clear plan for the 3rd generation. As our fathers grew the company, my cousin and I would start at the bottom and work our way up the ladder.
And with that one call, plans changed.
Our company was 50% prepared for this life event. Tony and Joe had agreements in place to deal when it came to stock options, voting rights, ownership transition, etc., which was a huge relief.
But there were two other significant pieces we had not planned for:
• WHO was going to take over Joe’s roles and responsibilities; and how this transition was going to be managed. Looking back, we lost nearly a year of progress as we figured it out, on a daily basis, without Joe’s wisdom and insights.
• The emotional toll. Joe’s death affected all of us at the company, but no one more than my father. Joe was his brother and best friend, but he was also his business partner for the last 31 years. Without Joe there, the fun of playing the business game had diminished.
We were fortunate that Tony and Joe had the foresight to have most of the critical documents in place to ensure the business could survive. And survive we did – it just looked very different from what we all had originally envisioned. After having lived and worked through this situation, I can confidently say that without the planning they had in place, the future of our family business would have been in jeopardy.
As a business owner, you have devoted so much time and energy to building your organization. Put the same time and devotion into building an emergency management plan (EMP) that ensures the business can survive without you. Then share it with your employees, your bank, your advisors, and of course, your family. They WILL thank you.
Need some guidance in drafting an emergency management plan? Schedule a 30-minute call with me and I’ll walk you through the EMP checklist we use with our own clients.
There are two “what ifs” to consider as you plan:
What if I, the owner, die while still leading the business? Yes, this is a big one and typically what everyone thinks of first. In a family business, there are complex issues to tackle and critical decisions to make. That is why the EMP is so important.
What if the death is someone close to the owner? A spouse… a parent… a child… a key employee… or as in my personal story, a business partner? Each of these circumstances will also send shockwaves through the family business. (Scroll back and download that EMP checklist!)
The only guarantees in life are death and taxes – Benjamin Franklin
As parents, we know we should create an estate plan, will, medical directives, and powers of attorney, so that when we die, our heirs are not stuck handling the estate without a plan. Business owners, you should be doing the same work with your leadership teams and family members as it relates to your single largest asset – your business!
In a time of grief, making decisions with a clear head is extremely challenging. The fallout from ignoring the 5Ds, like death, can be catastrophic. The act of preparing actually brings peace of mind and can be strangely liberating.
Click here for a mini questionnaire to test your 5Ds readiness on this uncomfortable topic of death.
I have shared 4 different links in this blog to help you and your business prepare for this particular 5Ds of Life event – there are four more I’ll be sharing in the coming months.
If this blog has created a sense of urgency, fill out this form and will we deliver the complete 5Ds of Life ebook PDF directly to your inbox.
It is my sincere hope that everyone reading this will take advantage of these valuable resources – all of which are free. Make the time to protect the legacy you have built and the people you love.
Life comes with no guarantees. There are only the ones we create.
BLOG | PEOPLE / TALENT
The Golden 5% is the full expression of our ability, multiplied by our maximum possible effort, multiplied by our full contribution of heart. It is the performance equivalent of what we offer in a deeply loving relationship – the absolute best of ourselves. And yet, we rarely give it or reliably inspire the giving of it by others in organizations. Why?
Read MoreBLOG | FAMILY DYNAMICS / GOVERNANCE
Part of the challenge in a family business, or any business for that matter, is that the world does not stop and allow you to pursue your strategy in a nice, orderly fashion. Whether it is internal or external, issues pop up throughout the course of the day in any business. So how do you prevent issues from derailing the company’s progress? Here are a few ideas for minimizing their occurrence and how to deal with them effectively when they do happen.
Read MoreBLOG | FAMILY DYNAMICS / GOVERNANCE
In working with many families and their businesses, I’ve found that every family has its own unique DNA, behaviors, values, and traditions. Yet, there is ONE theme that made all the families seem very similar...and that is the tension, angst, and, at times, a complete unwillingness to eat a meal together due to a lack of clarity around making business decisions for the family business. How do I help families clear the air of business-related issues so they can share a meal together as a family without tension, drama and strife? Governance and routine.
Read MoreAt Compass Point, we make it easy to get insights, training, tools, and articles straight to your inbox and help family business owners and their team continue to grow, learn, and lead.