How to prepare your home business for the unexpected



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About 7 years ago, I had what I considered at the time as a brilliant idea for my students. To help them understand entrepreneurship, I would ask them to work on a business project that involves their family businesses. His ideas for his projects were thoughtful and ambitious.

A student whose family owns tea plantations developed a plan for the family to enter the tea tourism market. On the other hand, the focus was on selling her family’s clothing line in a country where they had not done business before. Another designed a website and online store for the family’s boutique hotel. Each project was unique to the specific family business. When the semester ended, he was eager to hear the entrepreneurial ideas that the students had acquired. I couldn’t have been more surprised. Student after student stood up to report on their project, and instead of cunning reflections on entrepreneurship, they mainly talked about their relationships with their family members: “Because of this project, I now understand why my mother is so stubborn.” “The hardest part of my project was figuring out how to schedule time with my dad.” “I had no idea why my family was so risk averse, but now I do.” “My parents see me differently now, they talk to me like I’m an adult.” “I didn’t feel like working for my family business, but now …”

The positive, but unintended consequences of this teaching experiment reveal what is just the tip of the iceberg of developing a relational approach to preparing family businesses for unexpected future events and leadership transitions.

As part of a speech, one of my students described to the class his family’s interest in producing civet coffee. I noticed that some students nodded at the mention of the idea. The rest of us were looking for civet coffee on our phones. The coffee part made sense, but the idea of ​​civet coffee as a product made no sense. This is an example of symbolic interactionism, a theory in the field of social psychology that describes how we make sense of the world around us. According to the theory, as we interact with people, ideas or things, they acquire a meaning for us. For example, something as simple as an apple does not make sense until it is described, seen, touched, or tasted. Similarly, if I grew up in Switzerland, the idea of ​​a hurricane would probably be very academic to me. However, if I move to Florida, hurricanes will become much more personal and real to me. Meaning is how we understand the world around us, but shared meaning is what enables us to accomplish tasks together.

Shared meaning occurs when two or more people mutually understand something in a way that allows action. For example, a hand raised in a classroom has an almost universally understood meaning and facilitates action. At the other end of the spectrum, most of the students in my class couldn’t even consider, let alone provide, feedback on the idea of ​​entering the civet coffee market. Please note that shared meaning is not necessarily an agreement. I don’t have to agree with using coffee harvesting civets to effectively interact with others on the subject. Mutual understanding implies that I know your focus, beliefs, goals, etc., that you know mine, and that we are both aware that we know these things about each other. This kind of meaning in families is often neglected. We spend so much time with our families that it seems impossible that there are things that we do not understand about them or that they do not understand about us.

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Problems related to lack of meaning in family businesses do not occur because family members are out of touch. It is not the lack of relationships, but the lack of experience with the situation that causes problems. Consider a next-generation family member working with a parent in business for the first time. Any family that has experienced this event recognizes that working with a parent or child is very different from home life with the same people. Communication, processes, expectations, and consequences are often completely different from established home standards.

Any event or situation that is new to the family or its individual members will result in the need to develop a new meaning. Business conflicts, illness or death, divorce, financial difficulties, marriage, going to school, pandemics, and a multitude of other changes represent situations that have the potential to alter the status quo. If allowed to develop organically, the shared meaning around these new situations can take months or even years. These events are generally accompanied by quite a bit of stress, excitement, and ambiguity. As a result, shared meaning can never fully develop. Successful family businesses work proactively to develop shared meaning around key issues before future events.

When I gave my students the project homework, I inadvertently made them interact with their family in a way that, for most of them, had not happened before (the novel situation). The semi-annual structure of the project required periodic discussion, interaction and reflection. But there is no need to participate in a class to build shared meaning. Interested families should follow the following four steps (together as a team). Think of it as a family business task:

  1. Consider potential events or situations, not yet experienced, that may disturb or differ significantly from today’s understanding of how things work.
  2. Discuss together what these potential events or situations are likely to cause difficulties for the family.
  3. Create an interaction (experience) for the family related to expected difficulties, such as choosing between siblings for the next generation leadership, dealing with the sudden loss of a family leader or disagreements regarding strategic decisions for the family business. Interactions should be planned activities within the family that simulate aspects of the expected difficulty: the more realistic and engaging, the better. For example, a family discussion about choosing a future leader is good, but creating a set of possible scenarios regarding future leadership decisions and solving those scenarios together as a family is even better.
  4. Reflect together and individually on shared interaction.

Interactions can be as simple as having a conversation about a topic. But powerful interactions, those most likely to generate substantial shared meaning, are experiences that challenge family members intellectually and emotionally. Powerful interactions must not only uncover the thoughts, beliefs, and feelings of those involved; They should expose the reasoning behind them, compare and contrast them with others in the family, and apply them to real-world situations. The more intense the interaction you can design, the greater the learning and impact.

Examples of events that create shared meaning.

From the accidental experiment that I asked my students to do, I modified my classes to include facilitated interactions as the main goal. Below, I describe some of the interactions used in my courses, along with the reactions of the participating students and their families. These interactions revolve around four possible future events:

Event n. ° 1: the need to make a difficult business decision based on values

Interaction Description: Family members complete an exercise in which they choose values ​​that reflect their beliefs and then rank them. Then the family comes together to compare, contrast, and finally understand the similarities and differences.

Example of families reaction: “Listening to and understanding the core values ​​of my son and my wife was interesting. Some were obvious and others gave me a moment uh-huh. While we all had similarities in our values ​​and some who made it to the top of the list, our priorities also reflected differences. ”

Event # 2: illness or death of a family member

Interaction Description: A parent is assigned to ask the family in a formal discussion: What happens if I die tomorrow? The family then tries to answer the question in a group, addressing the emotional and practical implications.

Example of families reaction: “When my son and I were talking about death and if he had a plan in place … it really made me think about how he didn’t have one and how that would affect my family, his financial situation and my employees.” I immediately wrote notes and started the process to put in place a plan “What if I die?” As soon as possible. It also made me reflect on my decisions to date and their future effect on my family. “

Event # 3: Conflicting Ideas from Different Generations

Interaction Description: Family members are asked to individually list the main growth opportunities for the business along with the limitations. Then they share their ideas with the rest of the family and the family has to work together to decide the best idea.

Example of families reaction: “I find it very interesting that many of the challenges my father discussed are relational, while in my opinion, the challenges were primarily due to technological or profitability limitations. I know that business relationships have always differentiated my father and the company from its competitors, but I never heard him talk about the inability to forge relationships as an obstacle to expansion. Personally, I think it’s great to hear this from him, as I feel like I’m finally old and mature enough to understand how these relationships shape and how crucial they are to the future of the business. “

Event # 4: conflicts and difficult conversations

Interaction Description: Family members practice exchanging constructive comments by sharing things they believe other family members can improve to be even more effective.

Example of families reaction: “After hearing what I said, my father thought about it. Then I asked him to repeat what he had said. Although it felt a bit strange, after he was able to repeat what I said out loud, it seemed like my words had almost become his words. It seemed that we reached a mutual agreement on what had to be done. We both feel that this experience would help us move in a better direction in the future. “

The future is unknown, but families can work now to prepare for many of the possible challenges and future changes. When family businesses encounter novel situations, it is necessary to create a shared meaning before the family can effectively work together to adapt to the new situation. This process can take time and can be hampered by the stress and ambiguity associated with change. Proactive families can mitigate the impact of future challenges by taking a relational approach to their preparedness. By designing and participating in prepared interactions, families can create shared meaning before the change. This will minimize the time required to adjust and reduce pressure and stress on the family so that they can focus on business success.