On Tuesday, March 23, University of Vermont President Daniel Mark Fogel announced that he would be stepping down as a President, in June of 2012, a full 15 months ahead of time. In his announcement, President Fogel stated “that the academy does not always do leadership transitions well” and hence this announcement leaves ample time for a Presidential search and orderly leadership transition. The email details his plans to step down and why, along with a series of subsequent emails from university leadership about how the new search would commence and how. Although the University of Vermont is not an example of a family owned business, it provides a great example of staying in front of the announcement and keeping all employees informed.
Another family business I spoke with recently, much smaller (only 5 employees) was faced with a similar prospect of the owners wishing to exit the business in a similar time frame as President Fogel. In this case, one of the children came forward and expressed an previously unknown interest in taking over the business at this prospect. The parents considered the offer, and then requested the child consider the reality of taking over the business for another three months. At which point they would reconvene and determine if there was reason to proceed. This provided both parties with time to consider all the ramifications of this transaction and prepare themselves with the right questions, and hopefully answer. While the final decision is still months away, this act of communication coupled with time and space should allow for a smooth transition.
The importance of effective communication is ironically over-communicated and often misunderstood. It takes many forms and needs constant attention. What follows are some basic observations on what good communication looks like and why it can be a critical tool for your family business.
Why is family and business communication so critical?
- In the void of information, employees, family members and clients will “fill in the blanks” based on perception and mixed messages.
- Provides for consistency and accuracy of management or ownership messages.
- Non-family involvement in communication provides for external perspective and a benchmark for effective practices.
- It is an opportunity to share directly what is important to family and business without a filter.
- Transparency creates a more trusting business culture.
What are examples of effective communication?
- Create “rules of behavior” or ground rules for the family and all meetings and abide by them – being family does not excuse boorish behavior or a lack of business etiquette.
- Regularly scheduled meetings with set agendas.
- Active listening.
- Positive body language – being present in the conversation.
- Often professional facilitators or coaches can be effective to help build good communication practices if they are lacking.
What should be communicated?
- Family history
- Identifying priorities
- New business ideas
- Succession plan, including leadership changes and timing (if known)
Where to communicate?
- Family councils or meetings – largely focus on open communication and education. These are important, especially for family members not immediately involved in the business.
- Management meetings – An important tool for any business, though few often communicate family matters to management. Non-family managers and executives are a critical link to communicating plans with the business.
- Ownership or Board meetings – Having a formal Board of Directors/Advisors provides a forum for succession planning, estate planning and leadership development. Yet very few owners or businesses (of all sizes) often implement a formal Board.
For a video link of this tip, go to: http://www.wcax.com/category/196978/the-30?redirected=true.