Anticipating the First Family Meeting
Perspective: Rick, the 2nd Generation CEO
Just what I was hoping for – another meeting, and this time it’s a meeting with family members where the group might have to make a decision on something more important than what they want for lunch!
Oh, and then there’s my irascible brother-in-law who wants to tell me how to run the business and is convinced I’m overpaid. Sure business is flat compared to last year, but we’ve done really well given the market conditions. After he’s done criticizing me he’ll probably want to spend the rest of the time talking about how to get money out of the company.
I can’t wait!
Perspective: Ann, the Mom
When my husband, Richard, and I founded the business we could make ownership related decisions around the dinner table or on our drive to work. Now, with my three kids and their spouses involved as employees, owners or beneficiaries, there are more points of view, different goals, poor communication, misunderstandings and hurt feelings.
So I think it’s great we’re getting together to talk about the business and learn how to be a better ownership group. But I’m nervous about my daughters because Susan resents that her younger sister, Stephanie, works for the company and makes a pretty good salary. And my son, Rick, may be criticized for company performance over the last year or two. I think he has done a good job running the business even though growth seems to have slowed a bit.
For family get-togethers I’ve asked the kids not to talk about the business so we can enjoy our time together. So I guess the time has come for us to have family meetings where the purpose is to talk business.
I just hope the kids don’t fight with each other. I’d hate to have a family squabble ruin their father’s upcoming 70th birthday.
Perspective: Susan, the Older Sister
I’m really looking forward to the upcoming family meeting. I’ve got a lot to say.
For example, even though I own as much of the company as my brother and sister, they seem to be getting all the benefits – good paying jobs, company cars, interesting travel, etc. I enjoy being a teacher, but it bugs me when they show off their new company provided iPads.
And Mom and Dad, of course I love them, but they draw compensation from the company as “consultants.” Really? I don’t think my brother ever talks to them about the business.
But maybe he should. Dad said the business has been struggling to grow. Perhaps he should get back in there and help out. I know my husband, Bill, has a lot of good ideas to improve the performance of the company. He’s very entrepreneurial and now has his MBA. He’s not making much from a salary standpoint but someday we’ll make some make some good money when he sells some of his ventures. Maybe if my parents, brother and sister took less out of the company in compensation the value of my shares would be higher when we sell (which I hope we do soon).
In the meantime, if I could get some money out of the company like everybody else it would sure help with the bills and my husband could invest more in his businesses. I’m looking forward to getting this all figured out at the meeting.
Perspective: Richard, the Dad
I’ll admit I haven’t really spent a lot of time on this family stuff. I felt pretty good that I built a nice business with my wife, Ann, and that we had something we could pass along to our kids. My CPA suggested we do some estate planning, so the kids each own 25% of the business, with my wife and I holding on to the rest. Based on the latest appraisal, that’s a nice little nest egg for them.
So my focus was on the business. I just assumed the kids would appreciate what Ann and I created for them. With my son now running the business and my youngest, Stephanie, working as the sales manager, that’s a Lucky Strike extra. They work hard and I think the business has done pretty well in a tough environment. But I’m a little out of the loop now with my wife and I spending more time at our place in Arizona and finally doing the traveling we’ve always wanted to do. But I call my son once in a while to see how things are going and offer some free advice. Maybe I shouldn’t say it’s free advice since I do get a quarterly consulting fee!
Anyway, I think Stephanie is right in recommending we have a meeting to talk about the business. My wife is quite strict in enforcing her “no business talk” rule at family gatherings, so a lot of issues or questions bubble under the surface. For example, Stephanie mentioned to me it bothers her that her older sister doesn’t think it’s fair that she works for the company and gets a salary, benefits, etc. Stephanie would like to use the meeting to hopefully clear the air by discussing her compensation and how she has earned it. As she likes to remind her brother, she turned down a higher offer at another company to come to work for our family business.
I’m just glad Stephanie didn’t ask me to run the meeting. The family business consultant my son retained seems pretty good. At a minimum I hope he can be objective and help surface issues and concerns without the meeting getting too emotional. I’m not really interested in a lot of hugging or crying. Then we’ll need his advice on how to address these issues in a productive way.
My understanding is that the purpose of the meeting is for the family to begin learning how to own this business successfully. It’s more complicated than I expected. I think if we can just clarify what we need to do as a group of responsible owners and get agreement on our goals and expectations for the business, then it’ll be less likely we’ll have family misunderstandings and squabbles that could negatively impact the business.
By the way, to make things even more interesting, I just heard that Rick and Stephanie decided to invite spouses (of course my wife was already included). I think in general it’s a good idea to be inclusive, but I just hope Susan’s husband doesn’t take over the meeting! I like Bill, after all he is my son-in-law, but sometimes he comes on a little too strong.
So I’m a little uncomfortable about this first meeting, but I think my kids were right to push for it. We’ll see.
Next blog: the perspectives of Stephanie, the Youngest Sibling; Bill, the Opinionated In-Law; and Jim, the Family Business Consultant