Wednesday, February 25, 2009

Family Business CEOs Face Unique Challenges

Two dozen members of the Virginia Council of CEOs met over lunch last week to share what they know about “Thriving in a Family Business.” The 90 minute session at the Robins School of Business was a chance for the CEOs to talk about the challenges of running a family business, and to share what they have learned with others.

Here is a sampling from the experiences of this group.

• Objectivity is difficult if the decision makers are all family. Bring in consultants or set up an outside board to get some perspective on strategic decisions.
• One M&A pro advised that most successions don’t end well. To beat the odds, start a plan ten years ahead.
• Planning elements that were discussed include: buy/sell agreement; a defined conflict resolution process; a management structure with defined decision making powers and check & balances; wealth transfer mechanisms; and regular family meetings to discuss the plan.
• Separating family time from business time is difficult. Some recommended scheduling blocks of time away from the business with a “no shop-talk” rule in place.
• Recommended for reading were: Familybusinessmagazine.com; and Family Wealth, Keeping it in the Family, by James E. Hughes.