I’ve had the privilege of facilitating family meetings and family retreats for many years. Even though I can see families getting stronger as a team, there are still members of the family that ask the same question every year: “Why do we have to have a family meeting?”
The first answer I give is to reiterate that the long-term health and success of the family business is directly intertwined with the long-term health and success of the family. The annual family meeting is designed to strengthen the family team and connect it to the business.
Most family members enjoy the financial stability and rewards the family business affords the family and should see the annual family meeting as a small price to pay to help ensure the long-term success of the family business.
Specifically I’ve identified five challenges of family business that can be mitigated by holding an effective annual family meeting.
One of the most common sources of family business conflict can be a simple lack of effective communication. The annual family meeting is a great venue to provide a two-way communication platform between the needs of the business and the needs of the family.
My experience has been that learning to communicate is like any other skill – it takes practice. We continue to see families’ ability to communicate with each other grow exponentially year after year at family meetings.
Most families have communication issues and then ironically shy away from dealing with them. It’s like the old saying: if you keep burying the problem is going to eventually blow up. Championship family business teams embrace the idea of practicing communication even when it’s difficult in the first year or two.
Building new or strengthening existing relationships
Too often a team with great potential comes unraveled because of broken or dysfunctional relationships within the team or the family. The annual family meeting is a great venue to re-kindle old relationships, repair and mend damaged relationships and build new relationships.
A successful family business can be a source of pride for most families. Having broken or dysfunctional relationships can be major cracks in the foundation of long-term success. Well designed family meetings have exercises that bring families together in nonthreatening productive ways.
Build the skills and talent in the family
Not every family member will work in the family business but successful championship families realize the importance of building the collective skills and talent of the entire family. The annual family meeting should include opportunities to build skills in the areas of communication, problem solving and emotional intelligence. Those expanded skill sets will serve the family well either in the business or outside of the business to help both the family team and the business team be stronger and more effective to thrive in today’s demanding and competitive world.
Identify areas of alignment and misalignment
When the family comes together and communicates a natural outcome of the process is to identify where the family and the business are aligned and where they are misaligned. The sooner the family can identify any misalignment in a safe and productive environment the greater opportunity they have to deal with the misalignment.
Misalignment can occur in areas like next generation planning, succession planning or family business compensation. It’s better to iron out those differences at a family retreat rather than a litigious courtroom!
Build a strong cohesive team for long-term success
A strong team doesn’t come together instantaneously. Team development is often characterized in the phases of: storming, forming and norming. There is no shortcut to the process. The annual family meeting is a great venue to enable a team to get to know each other, iron out differences, and become stronger so they can be a unified force to win in the marketplace!
The odds are against families creating a long term successful family business. Smart families realize one of the keys to success is being willing to push themselves out of their comfort zone and build the necessary skills, mindset and teamwork it takes to win over the long haul.
Ask your family to lace up their tennis shoes and get to work if they want to be a part of my successful long term family business!