Progressive Grocer - November 2008 - (Page 20)

Independents report Big ideas for the smaller grocer Forestalling family feuds One of the greatest challenges for owners of family businesses is managing communications and conflict.The key: Set rules. By Jane Olszeski Tortola reating a more harmonious and “healthy” family business is certainly no easy task. It starts at the top, and requires hard work, commitment, and, as most experts would agree, rules. Committing to a clearly defined set of family rules allows owners to foster trust within their organizations—trust that’s essential to resolving disputes as they arise, according to John Eldred, president of Ambler, Pa.-based Transition One Associates. Eldred’s management consulting firm specializes in assisting privately held organizations accomplish productive growth and change. But he believes that regardless of size, family-owned enterprises ought to be operating under the same general rules. These rules include the following: Assign specific responsibilities and accountabilities to each and every family member involved in the business. “When the roles of fam- C drafted (and too guilt-ridden to say no), and whose lack of commitment quickly eviscerated the spiritual capital of the family business,” notes Eldred Parents must accept that they won’t live forever, and must engage in serious estate planning. “Planning to minimize income taxes is not the same as estate taxes,” cautions Eldred. “There is no necessary tradeoff between charitable giving and heir inheritances. Investigate the current mechanisms that integrate these two options. Do it now— and do it repeatedly.” Don’t confuse ownership responsibilities with management responsibilities. “During these uncertain eco- ily members resemble a soccer team for four-yearolds vs. that of a professional organization, you’ve got problems,” says Eldred. “Provide performance feedback on a regular basis to all family members to prevent ‘accidental outcomes.’” In addition to feedback, Eldred also suggests providing written one-page performance contracts that delineate what each is responsible for and to whom, and how performance will be measured. Parents must focus on planning, not worrying. “Worrying doesn’t provide a plan,” emphasizes nomic times, there is an abundance of qualified managers available due to corporate restructuring, etc.,” he notes. “Many managers prefer to work for an owner who is truly committed to both employee success and business success. John Eldred Additionally, such talent may be considered potential owners of the organization, especially when the next generation of family members appears uninterested in perpetuating the business.” As an owner, don’t pretend that your business is unique and unfathomable to an outsider. “remember that facts are friendly, and fantasies are foes. Owners and family councils must commit to hosting annual state-of-the-business meetings for all associates and stakeholders.” Fair is not equal. “There is no more dangerous myth than to confuse the meaning of fair and equal,” warns Eldred. “In a family business, this is usually a transparent shield for the parents’ conflated inability to judge performance based on the actual contributions of individual family members. “There are many clever ways to divide up the assets of the previous generation so that each member can get on with their lives. But it’s rare that giving equal say to all heirs can result in effective leadership decisions. Businesses can be run with the consensus process, but consensus does not mean everyone agrees. It simply means that everyone can speak his or her opinion.” The company founder must be clear about his/her long-term goals.“No one sets out to start a family busi- “While all business leaders wish to be perceived as unique, and some perhaps irreplaceable, unfortunately this gets in the way of learning from peers and others,” says Eldred. “Learning does not require surrendering a belief that one is unique, and opens up the possibility that advice from others, i.e. an advisory board or participation in c.e.o. roundtables, can result in significant payoff.” Remember that communication is driven by exceptions and crises. “Most often, people don’t want Eldred. “Too often, time is wasted worrying about the capacity to manage fellow family members, vs. managing the actual business.” to talk about succession planning, wills, or individual Objectively evaluate the competence, inter- goals,” he says. “The lack of communication is viewed est, and suitability of each famby many as a way of avoiding conMore ONLINE ily member expected to serve the flict. For example, I’ve often heard For additional information family business. “I know of several owners say, ‘If our employees knew businesses that have been ruined by an unmotivated second- or thirdgeneration family member who was 20 • Progressive Grocer • November 2008 on independent retailers, go to Progressivegrocer.com ness; it just evolves into one,” says Eldred. “Some research suggests that men, especially, start businesses to prove something. Interestingly, they aren’t seeking to prove that they can co-exist with their families in what is in reality a truly complex, transparent organization called a business, where every day presents a new audience, a new performance, and customers who show up today not caring how well you did yesterday.” Of succession planning, he says, “I often tell founders that it’s like they’re going to run a decathalon, but they’re only going to do it once. They cannot rehearse, and they better do it well. No wonder they put it off. “A healthy first step is for founders to decide if they really want to be involved in the business longterm, and if they’re committed to supporting their heirs in making the same arms-length, psychologically removed decisions. Commitment is the real fuel for any family business.” Independent Retailing Editor Jane Olszeski Tortola can be reached at JanieOT@aol.com. www.progressivegrocer.com how much money we’re making, they’d all ask for a raise!’” Eldred urges owners to A H E A D O F W H AT ’ S N E X T http://www.Progressivegrocer.com http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - November 2008

Progressive Grocer - November 2008
Contents
Front End
Nielsen’s Shelf Stoppers/Spotlight
Market Snapshot
Lempert Report
Independents Report
Cover Story: Store of the Month
PG Industry Event
Private Label: What Economic Downturn?
Private Label: Critical Mass
2008 Category Captains Awards
Beverage Alcohol
Meat Snacks
Meat Trends
Produce
Holiday General Merchandise
Equipment Innovations

Progressive Grocer - November 2008