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Finally, Good Planning Can Take 3-5 Years So, If It Is To Be Effective, It ...

Finally, good planning can take 3-5 years so, if it is to be effective, it needs to phased in while the current business owner is still in power. Rushing will result in conflict, confusion and loss of potential benefits. The use of objective mediators to help with the transition is highly recommended.

Managing Business Disputes with Relatives

Frank Sander and Robert Bordone give similar advice to that given above; they offer four guidelines to help make family negotiation more effective:
Prepare for complications this will facilitate sensitive handling of delicate situations and will avoid unnecessary pitfalls
Strive for transparency this makes dispute resolution easier in the long run
Consult a neutral adviser this facilitates the separation of emotional family issues from substantive business issues
Plan ahead family members should ideally agree in advance, and explicitly, the norms, standards and processes they will use to resolve processes. This will take time.

Mixing Blood and Business Safely and Successfully

Ronald Reece is a consulting psychologist who focuses more on the emotional and psychological issues which make life difficult for family businesses. He uses an approach which he names Emotional and Interpersonal Due Diligence(EIDD), the most important ingredient of which is listening and the second most important communication.

If blood and business are to mix successfully, he feels, there are three key process ingredients:
Regular, planned family meetings

A strategic business plan

An outside board of directors

Business owners typically dislike involving outsiders but Reece feels strongly that, like non-executive directors on the boards of larger companies, they help to give objectivity and are able to bring in new ideas. They, and any business consultants used, are not there to give pat answers to problems but genuinely to oil the wheels of discussion such that the family can move from conflict resolution to consensus and to a forming of a vision which can be the beginnings of a new strategic plan.

A Simple US Case Study

Kirk Jackson (KJ) is the current CEO of a family business (heating and air-conditioning) in the US which he took over from his father 20 years ago. It was a first generation transfer as Jackson's father had inherited the business from his own father.

Jackson had worked in the company in a variety of capacities before and after going to university. His position before the transfer was that of General Manager of the service business. He was totally committed to the company but this level of commitment does not seem to have been realised by the father, who decided to sell the company without discussing matters with the son and other members of the family.
Because of the angry intervention of KJ the sale did not go ahead and eventually he became the CEO, but without an equity stake.

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