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Key Concepts and Best Practices in the Family Owned Business

Key Concepts and Best Practices in the Family Owned Business. Dr. Orenia Yanai AMI – Family Business Consulting Israel. Is the Family Good for the Business?. Several recent studies find that family businesses financially outperform non-family businesses, especially in the 1 st generation

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Key Concepts and Best Practices in the Family Owned Business

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  1. Key Concepts and Best Practicesin the Family Owned Business Dr. Orenia Yanai AMI – Family Business Consulting Israel

  2. Is the Family Good for the Business? Several recent studies find that family businesses financially outperform non-family businesses, especially in the 1st generation (e.g. Anderson & Reeb, 2003, Villalonga & Amit, 2006) •In the second generation, FB’s are valued lower than non FB companies Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  3. MANAGEMENT FAMILY VISION & leadership INDIVIDUAL The four-circle model The family-owned business FAMILY OWNERSHIP MANAGEMENT INDIVIDUAL OWNERSHIP INDIVIDUAL MANAGEMENT FAMILY MANAGMENT INDIVIDUAL OWNERSHIP

  4. Partnerships as Key Success Factors in FB • Corponerism • Brothers as founders • Partners who bring their children into the business. • 2nd generation siblinsg partnership • Parent-children partnership • Cousins’ group Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  5. What is Needed for a Partnership to Work? • Couple Partnership • Complementary identity • Ability to derive satisfaction via the “other” • Motivation to develop communication • Ability to cope with competition • Desire to “do it together” Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  6. What is Needed for a Partnership to work? • Siblings Partnership • Positive childhood experiences together (Play, trips, mischiefs, etc.) • Family history (DNA) of positive siblings relations. • Parents who respect siblings’ relations, and let them be. • Distinction between parents relations and siblings’ relations. • Siblings complement each other in capabilities, style and personality. • Siblings can cope with competition • Mutual trust and respect Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  7. What is Needed for a Partnership to work? • Inter-generation Partnership • Responsible and dynamic parenthood • Parents’ ability to make the shift from authoritative leadership to a participative one. • Mutual trust and respect • Desire to improve communication • Parents’ need to pass the legacy on to the next generation Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  8. Conflicts and Fights • Cnflicts are an indication for a wealth of opinions. • There are different types of conflicts. • When the conflict has no resolution, it becomes a fight Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  9. Types of Fights • A fight that continues from a previous generation. • A fight over roles and procedures, disguised as fight over emotions. • A fight over emotions, disguised as a fights over roles & procedures. • A fight that rings the bells, because softer warnings were not listened to. Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  10. Types of Fights (Cont’d) • A fight in which one “sacrifies” himself for the others. • A fight that protects against a bigger/deeper fight. • A fight that keeps the relation alive. • A sibling fight caused by parental preferences. • A fight that builds/strengthens the relations Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  11. Conflict Solving Mechanisms • Do not deny the fight – It will haunt you. • Adopt a panoramic, multi-level, multi dimentional view. • Try to understand before you try to solve. • Do not get scared. • Learn to appreciate other points of view (even if you do not agree with them). • Get into your rival’s “shoes” and think like him/her • Treat the fight as an opportunity for change. Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  12. Continuity:Best Practices • A clear choice of successor, by the parents. • The successor leaves the family and the business, for a period of time. • A carefully planned career path. • Mentoring by a respected figure within or outside the business. • Open communication on financial issues. • Clear rules regarding the rights & responsibilities of successors who want to leave the business. • Shared and communicated values and vision, for the family and the business Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  13. Necessary Conditions for a Successful FB • Love is not enough. Trust & Respect are essential. • Rules, Boundaries & Procedures – Family Agreements. • Commitment to Personal & company Growth Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  14. How Do We Go About It?The Consultation Process • Panoramic mapping – Discover family DNA, strengths, challenges and values. • Creating a Road-Map • Prepare for succession through inter-generation collaborations. • Define values and vision • Create personal development and career plans • Introduce problem solving mechanisms • Set up Boards of Directors • Enable safe communication • Family agreements • Follow-up Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  15. The Benefit Families that own a business are committed to growing together as people Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

  16. Thank you. Tel: 972-9-9519512info@ami-fb.comoffice@ami-fb.com

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