 Dilemma:
The third generation patriarch of a family office,
that controlled a Fortune 500 corporation and many
other assets, was approaching 80. He was the glue
that held his family, four adult children with their
own grown children, and his three siblings and their
families, together. The family office was near his
home, and several long-term employees served family
members and managed their investments. He wanted
to shift his leadership to his sons and daughter,
who formed the family board of his family branch,
and had two representatives on the family office
investment committee. After his death, he was uncertain
whether his siblings and their heirs would want
to continue the family office. His own family was
increasingly fractionating, with the re-marriage
of one of his sons. He was concerned that the whole
structure of family connection would dissolve at
his death.
What
Was Done: A family council for his family
branch was created, bringing together for the first
time not just his children, but the two dozen young
members of the fifth generation, some of whom barely
knew each other. They presented their extensive
holdings to the group, and trained them in their
responsibilities as heirs. They defined their values
and goals for investment, and for philanthropy in
their new family foundation. They created clear
rules for including the 5th generation in the family
investment board. In the family office, they helped
the old guard to move on, and hired a new professional
manager as a leader. The board set some criteria
for accountability and goals for the family office.
Outcome:
The redesigned, more professional and accountable,
family office won the support of all family branches,
and grew to include other families as members. The
main family branch continued to connect, and involve
the 5th generation in both investment management
and philanthropy.
Dilemma:
Two parents had developed a large, successful retailing
business with high visibility in the community.
Their four children had key management roles. The
father had left active management for a time, but
kept returning, making the next generation unsure
of their roles and responsibility. They also felt
he was not willing to listen to new ideas. There
was some question of whether to hire an outside
CEO, promote family members, or sell the business.
What
Was Done: Create a family council to air
family concerns and create a future vision for the
business. Help the management team operate independently
by clarifying roles and responsibility, and helping
the father/chairman withdraw from daily management,
but receive regular reports from the management
team. Agree to hire an outside CEO, and develop
a strategic plan.
Outcome:
Father withdrew from daily management, making it
possible to hire an outside CEO to groom the son
for that role. Strategic planning led to new business
directions. Board added two outside members. Two
siblings decided to leave the business for new ventures.
Dilemma:
Working together, a father, his wife, and a son
and daughter, created a catalogue business that
began to grow. All of them worked to make it successful,
though the father had another career. The son was
named President, the father chairman. As the business
grew, there were issues about who was in charge
of what, how family members were compensated, and
the authority of non-family managers. Conflict was
brewing about these issues in the family, and the
son felt he had no authority to make decisions.
What
Was Done: Family members were simultaneously
owners/board members, managers and family. There
was no differentiation among these roles, and no
clear roles for family managers. The family owners
as the board of directors, created a contract with
their son/brother/CEO to define his authority. Step-mother
and sister clarified that they worked in the business,
but were not part of the executive team. A working
executive team in which the only family member was
the son was formed. Family members agreed not to
undermine or make management decisions, and to support
their managers. Compensation was clarified and separated
from ownership distribution.
Outcome:
The management team created a strategic plan, hired
two new members, and the business continued to grow.
It bought two other family businesses. Profits grew,
and family members no longer fought about business
issues.
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Services
