Separate, Align, and Balance
The Balance System prepares all who are involved – owners, managers, and family – for the inevitable changes associated with transition. We help you achieve the best outcome for the business through a sequence of consultations and work sessions.
The Balance System recognizes that the unique skills and authority of the primary decision maker are not automatically transferred simply by naming an heir apparent or drafting legal agreements. Acceptance of a successor and genuine collaboration require the support of everyone having an interest in the enterprise.
The Balance System provides the tools, guidance, and expertise to align, or “balance,” the vision, values, needs, and goals of the managers, owners, and family to achieve the vision created by the transition.
Why transition is often difficult
A business and wealth concentration always consists of three groups: managers, owners, and family – each with its own subsystem to pursue their interests with the enterprise. Often, one or more individuals participate in more than one group at the same time, creating overlapping roles and responsibilities.
The founder of the enterprise often occupies the center of all three overlapping groups and is therefore in a unique position to make sure that the interests of everyone, including his or her own, are reconciled and balanced. The founder typically looks to transition by identifying an “heir apparent” who can step into his or her shoes and lead the business.
Transitioning to an “heir apparent” presents several challenges:
- The heir apparent often believes he or she was given the authority to align the interests of everyone in management, ownership, and the family just like the founder. The heir apparent usually anticipates sitting in the founder’s “seat of power” within the middle of the three groups. The founder, however, commonly is only thinking about transitioning authority regarding management because he or she wants to remain involved and intends to transition ownership to others within the family.
- Differences between authority the founder intends to transition and the heir apparent believes is given can create confusion and differences, even a power struggle between the founder and heir apparent as to who sits in the center and when.
- The other owners and family members usually claim that being an heir apparent does not give him or her the right to “boss” the owners or family members just because he or she is the senior manager of the enterprise. They want to be involved in some meaningful way too, and they often question who holds the senior managers accountable.
A common solution to these challenges is to give the heir apparent or owners who work in the enterprise voting control so their authority cannot be questioned by others. But legal control alone does not result in respect and trust; in fact, it can have the opposite result – the other owners and family members may feel disenfranchised and become reluctant to accept the leadership or the heir apparent, especially if he or she introduces a new vision or tries to change the culture of the business.
The Balance System solves all these challenges by disentangling overlapping roles and responsibilities, getting everyone in each group on the same page, and balancing the differences based on the vision and objectives all the owners can support and the capabilities of the enterprise.
The Balance System
Our primary task is getting all three groups: managers, owners, and family on the same page and working together. We focus on planned interactions and decision making within and between the groups in a three-step approach:
- Separate the separate and distinct roles and responsibilities for each group.
- Align the interests of the persons within each group through an individual and group planning process that identifies common vision, values, needs and goals.
- Balance the vision, values, needs, and goals of each group through an evaluation process that requires the groups to adjust their interests based on the capabilities and objectives for the enterprise.
The Balance System is tailored to suit the uniqueness of every type of transition and provides no more and no less than what is needed. Benefits include:
- A proven method to respond to change, think critically about transition, and negotiate roles
- Best practices to keep from making predictable mistakes and spending unnecessary time and money
- Respond to all types of issues, even those that can be foreseen and that may otherwise be overlooked
- A safe setting to consider transition and to talk about change
- Effective handling of differences between and among managers, owners, and family
- Getting the right management system in place for the viability of the enterprise
- Preparing the next generation to be responsible and effective owners and managers, while the senior generation can continue to guide and remain appropriately connected
- Delivering better results through efficiency, focus, clarity, thoughtfulness, planning, and intentionality.
