Presenting "Preventing the Fall of a Family Business"

I was the lunch speaker for the Prairie Family Business Forum Annual Meeting in Sioux Falls. Met some great families – had a lot of fun with it. My thanks to Holmes Murphy Financial Services and Muth Electric for sponsoring me.  Topics included family business succession, conflict management, advisory boards, family litigation and federal litigation

John G. Wofford, Esq. and Douglas D. Box discuss LBGT family business issues at the FFI's 2010 conference in Chicago

As issues involving lesbian, gay, bisexual, transgender (LGBT) become more commonplace in family owned businesses, it is important for advisors to increase their awareness and sensitivity to the challenges this dimension can present.

Changes in society’s treatment of LGBT issues has been rapid in recent years, both within the US and the larger international community.  According to a report by the Human Rights Campaign released in July 2007, nearly 90% of the Fortune 500 companies of the US now include workplace protections based on an employee’s sexual orientation, up from 51% in 1995.  Moreover, 53% of the same 500 have added benefits for same-sex domestic partners.  And 25% of those companies now include gender identity in their non-discrimination policies, up from 15% in 2006 and 1.5% in 2003.

With this rapid change, intense and emotionally charged conflicts are not uncommon.  In a family business engagement, strong views on all sides can emerge.  Surprises, family secrets, and generational differences can pose formidable challenges for the advisor and the functionality of the family enterprise.

Earlier this month (Oct. of 2010) I was asked to help facilitate a discussion at the LGBT forum held at the Family Firm Institute’s annual conference in Chicago along with my colleague John G. Wofford, Esq.  Included in the discussion was a presentation of the 10 “best practices” for family business consultants or advisors to keep in mind when dealing with LGBT issues in a family business.  For more information or for a copy of this white paper contact me at doug@boxfamilyadvisors.com.

And yet, this is largely the world of family business.  They usually have no formal governance structures in place to manage the inevitable conflicts that emerge when family and business are combined.  Predictably, the result is often chaos.

Clients that have just begun to work with me will often describe their family as “dysfunctional”.  This is usually expressed more out of a sense of frustration than anything else.  But the truth of the matter is that these people are simply reacting to the environment they’ve been placed in.  In that sense, their behavior is not at all “dysfunctional”; in fact, just the opposite is true.  People tend to respond to whatever circumstances they are exposed to, and in the case of a family enterprise that lacks a clear governance structure, what family members most often find themselves confronted with is chaos.  In that context their so-called dysfunctionality is actually not only normal, but to be expected.

Lack of effective family business governance can lead to a lot of problems with the family firm.  One of the best ways to manage and prevent conflict in the family owned enterprise is to create a durable governance system that is inclusive and participatory.  If this sounds like something that might be an issue for you, lets get together and talk about it.

As a result, many family organizations are very often caught ‘off-guard’ when confronted by a serious conflict that no one saw coming.  Should the issue be allowed to escalate, most organizations will quickly find themselves in crisis mode.

Most family owners believe they can solve these kinds of problems on their own.  But more often than not, they cannot.  And if they don’t, family members will often revert to hiring lawyers to negotiate, threaten or otherwise try to resolve their disputes.

For a family business, this is dangerous.  My view is that the legal process should be an organization’s last resort to managing conflict instead of the first.  But too many family owned businesses have it just the other way around.  They tend to look first at the legal system to settle disputes within their family.  One of my jobs in advising families is to educate them about the many options available under Alternative Dispute Resolution or ADR.  This includes things like mediation, collaborative law, arbitration, peer panel review and the ombudsman, etc.

Most family firms have very limited experience with these non-adversarial approaches to conflict management.  While the legal model of dispute resolution tends to emphasize a ‘rights-based’ approach to resolving problems, an ‘interest-based’ approach is much more flexible and innovative because the settlements derived from it tend to result in much higher satisfaction to the parties while also preserving the relationship.  Needles to say, preservation of family relationships while managing conflict in the family firm is of paramount importance.

Take a look at this video from Season One of Dallas – plus I’ve added a short scene between JR and Bobby Ewing that shows some of the dynamics of “Dallas” family business governance, or in this case the lack of family business governance.

Cloyce Box Ranch on Original Dallas TV Show Intro

Dallas, TX (PRWEB) July 08, 2010

The “Family Business” conjures images of traditional Hollywood movies – sons learning from fathers, or daughters taking the reins when women did not hold such high-level positions. But what if your family business is more like a comedy or horror flick? Where do you get ideas to improve the challenges in your family business?

Family business owners cannot seek counsel from just anyone – they need a place to share ideas with others who understand. To meet this need, Box Family Advisors is creating a series of family business exchanges. During these exchanges, business owners have a safe environment in which to discuss the nuances of running a family business.

Family businesses are different than other private or public companies. The issues can become very personal. Plus, it is easy to become divided over challenges, big and small. Doug Box, family business consultant and owner of Box Family Advisors, understands running a family business. Not only has he helped his clients through numerous problems, he has lived through the division of a family business.

Box suddenly lost his father, legendary oilman and entrepreneur Cloyce K. Box, and found himself in the midst of heavily conflicted circumstances. He and his brothers were not in agreement regarding the future of the family company which led to years of disagreement and court battles. Because of his personal experience, Box is uniquely positioned to understand the dynamics of family businesses.

In addition to family business consulting, Box decided to create a series of exchanges giving business owners the opportunity to network and swap ideas about running a successful family business. These private gatherings will be hosted by Doug Box, who will share wisdom garnered from both personal and professional experiences.

For more information about the Family Business Exchange, contact Box Family Advisors at 877-530-7854 or email doug(at)boxfamilyadvisors(dot)com.

About Box Family Advisors:

Our mission is to help family-based firms manage the inevitable changes and complex challenges involved in running a family business such as succession planning, role conflicts and communication problems.

Box Family Advisors helps you find solutions to the many issues so often found in family business. As family business consultants, we provide the following services:

• Assessment of family system & family dynamics
• Analysis of family business system (SWOT analysis)
• Communication facilitation & conflict resolution
• Facilitation of family meetings & consensus building
• Transition planning for ownership & management succession
• Entry & exit strategies

We primarily work with the principal owner(s) or controlling shareholders of the family-based firm. However, other stakeholders can benefit from our services as well, such as:

• Family members who work in or own part of a family business
• Non-employed family members who own shares (or stand to receive them)
• Non-family executives or managers
• Other professional advisors, such as attorneys, CPAs, counselors, etc.
• Directors who sit on family boards

Media Contact: Beth Kahlich Dallas Internet Marketing Consultant

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