What Business Families Have Taught Me About…
Building Competitive Advantage in Business Families
 By
Henry D. Landes
November 2002
Since 1988 it has been my high privilege to work and learn, day
in and day out, with hundreds of business families. I am deeply
grateful for the many things business families have taught me over
the years!
So when I spoke to the "launch" meeting of the Next-Generation
Learning Lab on September 25, I wanted to return the favor.
I wanted to give this mature, diverse and energetic group of next-generation
leaders the clearest picture possible of how they can help their
families and business thrive, generation after generation. I presented
our new "model" that you now have in your hands—the
colorful insert that dropped out when you opened this newsletter.
This new visual depiction is our attempt to convey graphically,
in "3-D," the three spheres of business families—family,
business and ownership. This model also shows the basic steps (we
call them the TEN VITAL PLANS) that help manage the natural complexities
faced by all business families. You’re invited to bring your
own insights and observations to this metaphor—and let us
know your thinking regarding these plans.
In plain fact, most families won’t beat the tough odds of
business continuity. They have neither the capacity nor the tools.
They don’t gain competitive advantage because they can’t—or
won’t —do the necessary work. Yes, it takes some work
and discipline to develop these TEN PLANS, but this is not rocket
science. What’s required here is a commitment to regular discussions
to address the REAL questions faced by every business family.
BUT … discussions are not enough. Successful business families
take the next important step to create a compelling vision, to clarify
expectations, and to forge commitments to action—written down
in simple, straightforward PLANS (perhaps 1-3 pages each) that chart
the course for your business family.
So how DO business families build competitive advantage through
planning?
Since we believe a strong family is the foundation of any long-term
competitive advantage, we usually recommend beginning with the FAMILY
plans, building from the bottom up, then moving into the BUSINESS
and OWNERSHIP circles. But there’s really no "right way"
to do it. It’s not a straight line. The important thing is
meeting, talking and planning. The key is always working together,
building capacity in every (each?) circle, revising and enhancing
all ten plans over the years Or from year to year or all the time.
Or literally from year to year, and generation to generation.
So let the planning begin … by addressing the questions below!
FAMILY PLANS
- How will we perpetuate lifelong learning as a fundamental value
of our family? > > Family Business Education Plan
- How will we create a safe place to talk about the complex issues
all business families face on the journey? What written policies
do we need to clarify the expectations we have of each other?
> > Family Meeting Plan/Policies
- How will the parents divide up the family assets? Who will get
what assets and when? How do we ensure "seniors" adequate
income for retirement? > > Estate & Financial
Plan
- In the event of sudden death or disability, how will the business
be managed, the family organized, the ownership structured—short-
and long-term? (This plan actually relates to each of the circles;
it’s a "gray area.") > > Crisis
Plan
BUSINESS PLANS
- How will we make sure there’s strong management from year
to year, generation to generation? What process will we use to
select the next CEO, as well as key managers? > > Management
Succession Plan
- How will we keep our business strategy fresh, focused and flexible
in a rapidly changing business environment? > > Business
Strategic Plan
- How do we plan for the continuous improvement of business processes
and systems throughout the company? > > Business
Systems Plan
OWNERSHIP PLANS
- Who will own and control the stock? How and when will these
decisions be made/implemented? > > Ownership Succession
Plan
- How will we align shareholder expectations and responsibilities
to honor the family and protect the business? > >
Shareholder Plan
- Who will serve on our Board of Directors? What are the mutual
expectations among family members, managers and shareholders?
> > Board of Directors Plan
In this, the Family Business Forum’s tenth year, we’re
pleased to briefly introduce you to these TEN VITAL PLANS for your
business family. In the spirit on mutual learning, we invite your
questions and observations about this model—and the TEN VITAL
PLANS and other factors that you believe help business families
build competitive advantage. We intend to—yes, plan to—present
more information about each of the ten plans. Stay tuned!
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