Change may not be easy, but it certainly can be attained.
Balance members work with founders and entrepreneurs who have one or more of the following goals:
- “I want to change how I am involved with my businesses but I want to stay connected in a meaningful way. I am not ready to retire, or otherwise let go of my business.” For example, you may want to get back to doing what you enjoy most and let someone else run the daily operations. In some cases, you may feel it’s just not working the way you imagined and you know you need a change.
- “I want my management team to take on more responsibility for managing the business.” You may feel you are the only one who is worrying about the business and you wish your managers would be more concerned and engaged.
- “I want to keep my business going because some or all of my children are making their careers in the business.” You may want your children to work in the business and some may be working in it now or have expressed interest in working in the business in the future. You may also be questioning if your children have what it takes to continue the company.
- “I want my business to continue after I die for the benefit of my family.” You may want all of your children and/or other family members to benefit from continued ownership, regardless if one or more of your children work in the business. You may also want to treat all family members fairly whether they work in the business or not.
The Balance System helps founders and entrepreneurs identify and communicate their unique and personal vision for how they want to transition the way they are involved with their businesses. Together we evaluate whether existing systems can stay the same or need to change. We provide the structured process to define and implement the organizational structures, operational procedures, and governance policies to make changes needed in management, ownership, and the business to achieve your vision and the level of involvement you want.
Senior generation decision makers often transition ownership of the family business or wealth by identifying an “heir apparent” who can step into his or her leadership role. Problems arise because other owners and family members, and perhaps other managers, are not willing to accept the heir apparent’s authority to identify and balance their differing interests. They often believe that being the leader of the business does not give the heir apparent the right to “boss” the owners or family members. The heir apparent may also not be prepared with the skills or ambition to lead the business or may not have earned the trust and respect of the other owners and family members.
The Balance System recognizes that the unique skills and authority of the primary decision maker are not automatically transferred to an heir apparent through a series of documents. We prepare all who are involved for the inevitable changes that are associated with transitions including the primary decision maker and other managers and owners.
Transitions of Non-active Businesses
The Balance System applies if the business is an active, operating business; rental real estate; or marketable securities. All have owners and managers that benefit from clarification and resolution of differences.
Balance members help prepare individuals who are to become successor managers and owners of businesses and other enterprises. Here are some examples:
- Dads and Moms who want to give their children an opportunity to continue the business but don’t want family relationships harmed
- Owner-managers who would like to transition themselves and keep the business going to protect the employees and customers and preserve the legacy; they don’t want to sell to a competitor or venture capital firm for fear that the business will be dismantled or the culture significantly changed
- Siblings who work in the business and are to own the company equally but have not found a way to resolve differences so everyone can seemingly do what they want; or one person is making the important decisions to the exclusion of others
- Cousins who own a business together but those who work in the business make all the decisions so the cousins who are not working in the business do not have a way to provide their input
- Siblings who do not work in the business are telling their siblings who do how to manage the company
- Siblings who work in the business resent building wealth for family members who are not active in the business.
The Balance System prepares successor managers and owners to succeed as leaders of the business and become responsible owners.
Spouses of Owners
Spouses of owners have influence with the owners. They are typically more concerned with the family than the business and place family harmony and the happiness of their children ahead of everything else. They are concerned about how wealth will impact the family. Often, spouses have concerns about the well-being of their spouse-owner.
Being a senior manager in a family business certainly has benefits, but it can also have significant uncertainty. Consider:
- The non-owner president not knowing what the owners want as a group (playing “let’s guess what is in the owners’ heads”)
- Owners telling the non-owner president how to manage the business (and the president thinking he/she needs to follow the owners because owners always get what they want, even if what the owners say they want is not necessarily in the best interest of the business.)
Balance members help non-family managers find certainty and support in their roles as business leaders and mentors.
“Trusted Advisors” are those individuals to whom the person with the primary power in the business and family turns for counsel on important decisions. They may be attorneys, accountants, financial advisors, friends, spouses, or other family members or professionals.
Trusted Advisors who provide professional services or products often want to be “the” person the client turns to for advice on all major decisions. These professionals covet the role of the “Trusted Advisor” and their primary goal is to keep the client and the role of trusted advisor. In other words, the Trusted Advisor will do everything to protect the relationship and will not do anything that might risk losing the relationship. However, there are often multiple trusted advisors, each vying for the top advisor position. The Trusted Advisors may not agree on how the transition should be handled, if at all, and may need to share roles and work together. Good Trusted Advisors know how to ask difficult questions, help the client struggle with difficult questions, and find the resources the client needs to answer those difficult questions, all without incurring unreasonable risks to maintaining the client relationship.
At the same time, Trusted Advisors want to (i) enhance the likelihood of a successful transition so their client is not sold; (ii) keep the client after the decision-making authority is transitioned to the next generation (if that is the goal); and (iii) sell more of their own services and products.
Biggest obstacle: “You’ll take away my clients or wreck my relationship with them.” This fear may manifest itself as (in no particular order):
- Balance will become the “trusted advisor” and the former trusted advisor will be cut out of the loop of communication
- Balance offers competitive services or will recommend someone else
- Their reputation/relationship with client will diminish if they make poor referrals
- Fear of losing their client by pushing the client to address choices the client does not want to address, or recommending somebody to work with their client who might push the client to do something the client does not want to do
- Lack of a clear understanding of Balance’s role and the services we provide and how it could benefit their client and their relationship with the client
- Lack of knowledge regarding the research behind successful family business transitions; they may believe the services or products they provide are all that the client needs in order to achieve the client’s objectives
- They don’t really have a good grasp on how psychologists can help transitions (or other services in general)
- Consulting/collaborating takes too much time and is hard to bill for
- Any “dysfunction” works to their advantage right now, or they like the current system so they don’t want it to change