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 32 The Importance of Trusting One Another's Intentions Good feelings in family business don't just happen. ey are developed over time by the cumulative results of interactions with one another on family, business and owner- ship matters. Creating the right environment for good feelings to develop and fl our- ish starts with trusting one another's intentions. Even in the best rela- tionships, there are so many opportunities for misunder- standings that feelings are sometimes going to get hurt. When there are too many occurrences of hurt feelings, a lack of trust may begin to develop as family members begin to question whether oth- ers have their best interest at heart. If not abated, question- ing of one another's intentions can turn into a downward spiral that can destroy trust among family members and render them unable to work together eff ectively. Setting Your Family Up for Good Feelings An observation from my work with family businesses is that families in which good feelings prevail have developed clarity in the following three inter-related areas: 1. Decision-making rights (DMR), which is about who has the right to make particular decisions. When this works well, all family members understand and accept which individual or group has the author- ity to make decisions on a particular topic; 2. Communication and information fl ow (CIF), which speaks to the process for sharing information and ideas. Well-functioning families have given thought to what needs to be com- municated to whom, and have considered the timing, the venue and the sequence of who knows what when; 3. Accountability and reward system (ARS), which is the processes by which family members hold one another accountable for results. In- dividuals in these families have confi dence they will be rewarded (with monetary and non-monetary rewards) when they generate the re- sults to which they commit, and will face consequences for falling short. *Reference Harvard Business Review, e Secrets to Successful Strategy Execution, by Gary L Neilson, Karla L Martin, and Elizabeth Powers, June 2008 edition. e following short case examples illustrate how small matters can lead to bad feel- ings and a serious erosion of trust and can jeopardize the ability to collaborate when a family has not aligned on DMR, CIF and ARS. Concepts in Action: Decision Making Rights (DMR) Scenario: A sibling partnership, consisting of one sister (Emily) and two brothers (Dan and Roger), is leading a family business with two divi- sions. Dan's daughter, Rachel, is distraught about her recent loss of employment outside the family business. In an eff ort to "take care" of his daughter, Dan makes a commitment (a decision) to Rachel that she can start working in the business within the division The Importance of Investing in 'Good Feelings' by Michael L. Fassler ome people assume family business is inevitably an arrange- ment that is bad for both the family and the business. Family owned businesses do face the com- plexity of competing demands regarding family, business and ownership matters, because both emotional and fi nancial capital are at risk. Yet, if these dynamics are managed in a way that leads to good feelings among family members, the result can be family relation- ships that provide a deep level of satisfaction for the family and a competitive advan- tage for the business. In my experience, some forethought around a few predictable landmines can lead to strong returns on both the fi nancial and emotional investments made. S