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Family Succession: Fantasy vs. Reality

Family Succession: Fantasy vs. Reality. Chief Executive Boards International Saturday, April 16, 2005 Richard D. Geib II, C.F.S.P. Professor O’Hara.

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Family Succession: Fantasy vs. Reality

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  1. Family Succession: Fantasy vs. Reality Chief Executive Boards International Saturday, April 16, 2005 Richard D. Geib II, C.F.S.P.

  2. Professor O’Hara “Before the multinational corporation, there was family business. Before the Industrial Revolution, there was family business. Before the Enlightenment of Greece and the Empire of Rome, there was family business.” The oldest present family businesses can claim to have outlasted governments, nations, cities, and certainly once-mighty corporations.

  3. Define Family Business • Sole proprietorships, farms, etc. • Multiple family members in leadership positions • Survived several generations under family control

  4. America’s Oldest Companies Zildjian Cymbal Co. 1623

  5. America’s Oldest Companies Corning Glass 1851

  6. America’s Oldest Companies Levi Strauss 1853

  7. America’s Oldest Companies Anheuser-Busch Co. 1860

  8. America’s Oldest Companies Bacardi 1862

  9. World’s Oldest Companies Kongo Gumi 578

  10. World’s Oldest Companies Hohsi Ryokan 718

  11. World’s Oldest Companies Fabbrica D’ Armi Pietro Beretta – 1526

  12. World’s Oldest Companies Kikkoman 1630

  13. World’s Oldest Companies William Clark & Sons 1739

  14. World’s Oldest Companies Waterford Wedgewood 1759

  15. Rules of the Family Business • If it is not written down, it does not exist • Agreements not enforced are not agreements at all • A decision is not made until it is acted upon • You cannot have a retirement plan in place too soon • It is important for family members to have clearly defined and separate roles within the business, community, and their own lives • If an owner does not want to succeed power, MOVE ON!

  16. Family Business vs. Family Baggage • Family business conflict can be very healthy for both the company and the family • Don’t forget the spouse • In planning, it cannot be equal, but it can be fair THESPOUSE • Sometimes we say the wrong things for the right reasons • Family members should only be compensated and retained by performance • If it cannot be measured, it cannot be monitored • There are no secrets in the family business, but there may be a conspiracy to protect shared fears. It will grow in darkness until someone turns on the light

  17. Personal Growth Issues Maslow Third Force Psychology • In our society, most basic needs are being met • You cannot grow by having these needs met additionally “A musician must make music, and an artist must paint, a poet must write, if he is to be ultimately at peace with himself. What a man can be, he must be. This need we may call self-actualization…It refers to man’s desire for self-fulfillment, namely to the tendency for him to become actually in what he is potentially: to become everything that one is capable of becoming…

  18. Personal Growth Issues Maslow Third Force Psychology • Don’t be forced into a role you are not comfortable with • Members can be tested for positions, although everyone in the family already knows the answers • Don’t confuse your identity with that of the firm’s • The business is a means to an end • You can use family assets to help other family members self-actualize outside of your primary business

  19. Maslow X-Y Theory • How you view employees internally will have a direct impact on how you deal with them externally • The challenge is to build an environment and philosophy where motivated people are willing to make a maximum contribution • Our policies and procedures speak volumes regarding our assumptions about people. Rich’s Star Employees

  20. When It Works Family business takes much communication, planning and understanding The family business is just one of many adventures in life The family business can be a very rewarding experience and help the whole family unit self-actualize

  21. Don Boone Once Said… The family business is the most gratifying of all business experiences. No other business model instills managers and employees with more commitment, passion, and sense of history in the business. When done correctly, there is no greater pleasure than watching the growth, development, and success of the family members working together.

  22. “I want to give to other family members the same opportunity to build a business that I had.”

  23. Family Succession: Fantasy vs. Reality Chief Executive Boards International Saturday, April 16, 2005 Richard D. Geib II, C.F.S.P.

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