Issue link: https://read.dmtmag.com/i/279349
I DA U N I V E R S A L M a rc h -A p r i l 2 0 1 4 35 a solution is challenging, because it may be that Jacob feels he was not given the same opportunities to contribute as Richard, or Jacob's sense of self may be threatened if he has to acknowledge that his brother is a stronger contributor. On the specifi c case of compensation, we o en encourage families to clarify what comes to family members by virtue of their employment (compensation) versus what is a return on their investment as shareholders (dividends), as those should be driven by diff erent considerations. Also, adding objectivity by transi- tioning to market-based pay (instead of "we all get paid the same") can be helpful, but bear in mind that a signifi cant change of this nature may need to be phased in or written as policy that applies to future generations. Hard as it may be to clarify what is fair, it is critical to have these conversations to ensure all stakeholders feel the system is balanced. When families avoid confronting these situa- tions, the outcome can be that the most competent contribu- tors become fed up and leave – leaving the business to be handled by those who are objectively less capable. All shareholders will lose with that outcome. Getting It Right Developing and maintain- ing an environment of good feelings is a continuous pro- cess. e job is never fi nished because the family and the business are always evolv- ing. e following processes can help your family business build an environment of good feelings: 1. Develop role clarity. Having clearly defi ned roles within family and business gover- nance will help set appro- priate boundaries regarding decision-making rights and expectations as to the fl ow of information; 2. Map out decision rights. What are family decisions, ownership decisions, board decisions and business management decisions? en, make decisions and communicate within the appropriate venue, such as a family council, board of directors meetings and management team meetings; 3. Remap your DMR, CIF and ARS to refl ect new realities for the family and the busi- ness brought on by periods of signifi cant change. ese include: rapid business growth, entry of the next generation into the business as leaders and/or owners, or the death or disability of a family member with signifi cant infl uence in the family and/or the business; 4. As you map or remap DMR, CIF and ARS, cast your net wide to involve the stakeholders who are im- pacted. Draw them into the mapping exercise, because chances are if they have input into the resulting behaviors and processes, they are far more likely to embrace them and abide by them; 5. Recognize and respect the interdependencies among stakeholders and groups of stakeholders and plan for the impact decisions will have on the interdependent stakeholders; 6. Develop and use structured and more formal commu- nication processes, particu- larly as related to impor- tant, sensitive and personal information; 7. When preparing to share important information, think through and visual- ize the appropriate venue, the best person to convey the information and the sequence and timing. en, execute with a formal roll- out of the information; 8. If you become engaged in discussions about area- sin which another shares decision-making rights with you, ensure that you transition the conversation to include that person from the outset. If you have no decision-making authority on the topic, refer the other to those who do; 9. Continuously develop more clarity in the linkage between performance and monetary and non-mone- tary rewards. Use objective criteria and consistent man- ner of delivering messages on performance. Closing Thoughts Good feelings among fam- ily members are foundational to working together eff ectively. Working together eff ectively results in a family being more capable of recognizing and capitalizing on opportunities and being able to see their way through troubling times. ● 13&$*4*0/%*&4&-1"354t."+0364&/(*/&4t(-0#"-%*3&$5%&-*7&3:t'6--5&$)4611035 A diesel engine goes down. Work stops. But not for long. For 60 years, we've manufactured high quality replacement parts for major US engines and heavy-duty applications. Quick order response gets you up and working fast. Call us. 1-800-321-4234. ©2013 Interstate-McBee "Good Feelings" Continued from page 33