Stress and Conflict Reveals what one Sibling Really Values

I know of a family owned business whose three owners – all siblings – are in their late sixties. They present themselves to the outside world and to themselves as a tight-knight, loving family.

Their business is in crisis. For years, they have lacked a true leader to guide their business. Their father was more of an angry, my-way-or-the-highway drill sergeant, but he wasn’t a leader, so they didn’t learn any leadership skills from him. Plus, they have lacked any serious accounting talent. Their bookkeeper has done her best, but it’s clear that their lack of adequate leadership and accounting has resulted in their business being on the brink of bankruptcy.

I’m part of a team that was brought in to help them turn-around their business. When they started implementing our recommendations, significant stress and hidden conflict surfaced first on how they managed finances and then on what roles each sibling was fulfilling in the business.

It didn’t help that one of the extended family members had loaned the business a significant sum of money to keep it going and now was facing the prospect that he might not be paid in the time frame he was requesting. He and his wife (one of the owners) were nice as long as they thought they would be paid back within an artificial time-frame that he had arbitrarily set. But when it became apparent that his timeframe wasn’t going to be met, he threw a temper tantrum, stormed out of the office and never returned.

His wife, one of the owners, suddenly cut off all family communication. She even dis-invited her two siblings to a significant family celebration for her. When stress was low – before the recommendations were implemented – she would say that she’d like to be paid back, but that she knew it would take time. She was accommodating and nice. But when the stress became high, she became a different person. She and her husband were so angry that they moved out-of-state – permanently.

And there we had it: the truth. The truth was that they were willing to sacrifice family relationships – permanently – over money. Money was more important than family.

In my experience, when families tell me how loving and tight-knit they are, I usually wonder who’s not being honest with themselves. It’s not that tight-knit families don’t exist – they do. But those that are tight-knit rarely have a need to tell others how tight-knit they are. They just do it without thinking and you can see it in their interactions. It never occurs to them to tell others they are tight-knit because they don’t know of another way of living.

We usually find out who is not being honest with themselves when the really tough parts of a business turn-around are placed squarely on the shoulders of the family/business owners. Under stress, I’m able to see and hear the real truth of how solid and stable the relationships are within the ownership group. Moreover, I hear the real truth of what individual owners are really thinking.

On a global scale, here is what you can look for when stress increases in a family business.

Money is often more important to people than family or business relationships. I’ve seen this born out in a number of situations, both when I owned my own therapy practice and now as an advisor to family owned businesses. It’s sad, but true. Most people value money more than most other things and people in life. So they do things like cutting off and threatening to move to another state. Money becomes more important than family.

Our values are forced to the surface when stress hits our lives. I’ve seen people live out their stated values under stress. For example, I’ve seen people who are financially stressed still give to others because they really do value giving and philanthropy. The stress didn’t surface hidden values. But I’ve also seen people who valued their relationships jettison them at the first hint that their wealth was being injured through those relationships. Unfortunately for this ownership group, one of the owners values money more than her family relationships. This will be a truth the other two owners will need to keep in mind as they move forward.

Many justify otherwise unacceptable behavior because money is involved and “you just don’t mess with my money”. The sister who dis-invited her siblings to her celebration would have never thought to have done this under normal circumstances. But when she faced the (perceived) prospect of not being paid within the arbitrary time-table set by her husband, she chose to show her anger by cutting off from her family – hence the other owners in her business. This is clearly unacceptable behavior, but because money is involved, her behavior is somehow justified – at least in her and her husband’s mind.

Unfortunately, we often don’t see what people really value until they are under significant stress. This can be highly enlightening (and perhaps disheartening) when it is a family member. But if you agree with one of my undeniable truths of business ownership: “the truth is never the problem”, then you’ll come to see that learning the truth can only help you in your relationships and business ownership as you move forward, even if you learn that the truth is ugly and you had to learn it under stressful circumstances.

Bill English, MA, LP, MDiv is a family business advisor with the Platinum Group in Minnetonka, Minnesota. He assists families with conflict resolution and positive successions of their business as well as performing interim CEO work for family businesses in transition. You can contact Bill at bill. english @ theplatinumgrp.com or call 952-259-3217.

US Faces Another Debt Crisis

Congress and our President is planning to raise the debt ceiling again (here and many other stories). Debt continues to be a huge bondage to our country that we ourselves don’t appreciate or recognize. This is a huge issue, in our opinion here at Bible and Business.

As of September 1, the national debt is 19,844,621,643,528.62. $5.4T is intergovernmental debt, so the Federal Government’s debt to outside parties is ~$14.4T. Using the lower figure, our national debt translates into ~$45K/person in America. Our total economy (GDP – Gross Domestic Product, which is the sum total of our national output of goods and services) is $18.6T for 2016 (in 2009 chained dollars, the GDP is $16.7T – “Chained dollars” is adjusted for inflation in 2009 dollars.)

Our total debt that is owed outside the Federal Government is approaching equality with our annual GDP. If we include the total Federal Debt and compare it to the “nominal” (think “not chained) GDP, our debt exceeds our entire economy’s output for a single year.

We are drowning in debt – literally the frog in the frying pan. Consider this:

  • The 50 states combined have a total debt of $5.1T or ~ $16K/person
  • The unfunded estimated future liabilities for Medicare parts A, B and D plus Federal Employee and Veterans benefits totals ~ $87T (here too).
  • USdebtclock.org estimates current and future Federal debt liabilities will equal $890K/taxpayer in the US.

This entire structure is unsustainable. We have no one to blame but ourselves. This isn’t a Republican or Democrat issue, it is an American issue that affects everyone equally. If we don’t start living within our means, our entire economy will collapse under the weight of this debt. This is both undeniable and unavoidable.

At some point in the future, the US will not be able to meet its’ obligations to pay debt when it comes due. Americans will miss their government checks. Direct deposits will not happen. Tax refunds will be missing. The Federal Government sends out over 80 million checks each month. We have created a government that knows how to license, regulate and redistribute wealth, but it doesn’t know how to say “no” to it’s citizens when it should.

The social unrest that will ensue when these checks stop coming will be directed, we believe, at the rich – really anyone perceived as having something someone else needs. Black markets will quickly develop and violence will erupt, IMHO. We hope we’re wrong.

When (not if) we go down, the entire world’s economy will go down with us. This just might trigger a series of intense wars as leaders try to protect their own countries and lash out at the US for being so greedy and reckless.

It will be a time for the church to be effective like never before – but only if we’re prepared and ready to give it all away to help people find Christ.

What can you do?

  1. Stop electing people to Congress who vote for budgets that increase our debt regardless of party affiliation
  2. Stop blaming others – each of us are responsible as voters for this situation
  3. Inform yourself – Concord Coalition is a good place to start
  4. Start saving hard goods that can be bartered – not precious metals – but things people will need in the areas of safety and basic needs
  5. Pray that God will bring revival to this country – unless we turn back to Him, we *will* continue down this unsustainable path
  6. Get out of debt as much as possible

Bill English

The Challenges of Succession Planning

Succession Planning. That seems to be the #1 issue people talk about when it comes to family businesses. And just about every consulting, accounting, legal and financial group claims to do it and do it well.

Talk to family business owners over 55 and they’ll tell you that “succession” is probably their highest concern and, at the same time, their most confusing concern.

Those who are on the succeeding end – their adult children – have a variety of concerns, depending on how their parents are handling their discussions around succession.

Consider some of the issues they raise:

  • Son: “I don’t think Dad is ever going to retire. What kind of a future does this leave for me?”
  • Dad: “It’s impossible for me to just let go of the company I’ve spent a lifetime building. And besides that, the next generation is not ready.”
  • Daughter: “I don’t think I’m ever going to own any stock in the family business. Why should I continue to participate in it?”
  • Siblings: “We have a succession plan; it was decided by my dad and his brother years ago. My brother and sister and our cousins don’t like it, but we don’t make the rules.”
  • Sibling: “I don’t know how I’m ever going to get along with my brothers and sisters in the business.”

Think about these five quotes for just a moment. The first quote goes to Timing on when the trigger should be pulled for the senior generation to exit the business. Just because they can continue to work in the business doesn’t mean they should continue to work in the business.

The second quote deals with Identity and Training. Thu owner’s identity is too connected to what he does. He doesn’t have a transcendent purpose in life outside of work. Moreover, he hasn’t spent time (usually years) preparing his children to take over his business. Leadership and management are two different things. Just because they know how to work in the business doesn’t mean they know how to lead a company.

What we hear in the third quote is Hopelessness. More than likely, a succession plan isn’t in place, or if it is, it’s not been communicated well and it probably isn’t being followed.

The four quote deals with feelings of not being Respected when stakeholders are not included in the development of the succession plan. When stakeholders are not included in the development of the succession plan, the plan itself is bound to be wrong. But that’s the minor point – the frustration and negativity that grows in the soil of being diminished is the major concern.

The last quote illustrates the complexity that the 2nd generation siblings must navigate. Power, control, identity, roles, purpose, employment, retirement and a host of other issues that have strong potential to create conflict and divisions if they are not managed properly. Resolving these issues doesn’t come naturally. Complexity is the issue to resolve in the second generation and they rarely can do this without outside assistance.

Timing, identity, training, hope, respect, complexity and a host of other issues are wrapped up in a succession plan. Add to that estate plans, retirement objects and plans, answering “What’s Next?” for the senior generation and the different shareholder, Board of Director, contingency and other planning efforts in which the family must engage leads one to swiftly discern why most consultants say it takes at least five years and intentional effort to successfully achieve a succession of a business from the first generation to the second.

The quotes were taken from the book Family Business Succession: The Final Test of Greatness. Aronoff, McClure, Ward; Palgrave MacMillian

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