A free monthly e-zine with articles and tips from Family Business Experts who understand family values and business systems.

June 11, 2004 Issue #026 Family Business Experts

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In This Issue...

1. Our Managing Director Announces -

2. Business first family...Family first business

Succession Management - Advisory Board Can Be A Powerful Tool

3. Legacy through Leadership

LP03. Ensuring Unit-Level Strategic Direction

4. Around the Family Business Experts web sites

1. Our Managing Director Announces -

An Advisory Board is probably the single best succession management tool a family business can adopt. But it needs a good process to prepare for success. Our interview on site and summary here provide insight into a successful and effective process.

We continue with the Leadership Practices series, since these practices are the foundation for the processes that must be in place in order to achieve success.

Reminder: We've developed a couple of quick diagnostic assessments to help you. They are both fr*ee [at least for a while] and we try to deliver 48 hour turnaround of our analysis. Try them!

The Holonomic Top Down Assessment asks you about a combination of the 12 Main Enabling Processes that an effective organization has to have operating in order to achieve the 6 Desired Organizational Characteristics of effective organizations. Where your assessment indicates one or more of these are not working in your organization, we'll feed back suggestions as to the underlying Leadership Practices that might not be working.

Take our fr*ee Holonomic Top Down Assessment to see what underlying practices might be at fault and causing problem symptoms in your family business .

Diagnosing from the other direction - Bottom-Up - we ask you to identify which of 29 Leadership Practices aren't present or working. From that, we point you to Enabling Processes and thus Desired Characteristics that probably aren't functioning.

Take our fr*ee assessment on the 29 Leadership Practices to see how they affect your family business.

Don Schwerzler, Managing Director
Family Business Experts

2. Business first family...Family first business:

Succession Management

Succession management is a perennial family business problem. Don Schwerzler thinks that forming an Advisory Board is the single best succession management strategy, but notes that it is not a simple task to get an effective board up and running.

Over the years, he has evolved his ABC Process - Advisory Board Coaching - to prepare a family business during the 6 - 24 months it typically takes before a new board conducts its first meeting.

He notes that the trick to Advisory Board success is coaching. Board members are not family business consultants, so they are not trained or experienced in dealing with family business dynamics. Thus, to be effective, an Advisory Board needs to have certain infra-structure in place in order to be effective - formal business plan, written succession plan, Buy/Sell Agreements...

Highly summarized, Don's ABC Process has 3 main steps:

1. family business assessment and family strategic plan;

2. determine the kind of persons and experience that should be recruited for the board; and

3. help organize and conduct the first few Advisory Board meetings.

Incidentally, when Don was asked "Do you know what percentage of family businesses have an Advisory Board?", his answer was most revealing...

"I don't have the statistics on that, if they exist. But thanks to my personal experience as a family business consultant for almost 40 years, I can usually tell when a business has one or not. It reminds me of something a state trooper said about seat belt use. In all of his investigations of fatal auto crashes, he never saw one where the victim was wearing a seat belt. That is a compelling message. Those family businesses who use the Advisory Board as part of their succession management process tend to be businesses that are still alive, still growing in size and profitability. And, not surprisingly, they also tend to have healthy family relationships. They successfully transition from one generation of family ownership to the next. As part of the succession management process, the Advisory Board acts as a safety net for both the family and the business."

Read more of the fascinating details in our interview with Don at Succession Management.

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3. Legacy through Leadership

There are 29 Leadership Practices [LP] that are really the foundation upon which 12 holonomic or enabling processes[HP] are built, and which, in turn, produce 6 desired organizational characteristics [DOC]. We'll look at each in this section.

LP03. Ensuring Unit-Level Strategic Direction

Ensuring unit-level strategic direction is the management process that ensures that Associates know, understand, and use their unit-level strategic direction. It also ensures that the unit-level strategic direction remains consistent with the organizational level direction as it evolves and changes.

Dr. Ken Mackenzie is our internationally-recognized organizational expert. These leadership tips are excerpted from the e-book Legacy through Leadership he and Don Schwerzler collaborated on. Email: ken@family-business-experts.com

Would you like to see how the 29 Leadership Practices are affecting your family business? Our assessment only takes a few minutes to complete!

Take our fr*ee assessment on the 29 Leadership Practices...

4. Around the Family Business Experts web sites

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Background information, testimonials to our service and understanding, and answers to FAQ's [Frequently Asked Questions]. Family Business Experts

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Read about Succession Management

Take our fr*ee assessment on the 29 Leadership Practices to see how they affect your family business.

Take our fr*ee Holonomic Top Down Assessment to see what underlying practices might be at fault and causing problem symptoms in your family business .

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