Most CEOs have achieved some level of success in their business and finances, as well as their personal lives. Beyond that, many seek something more – a bigger meaning, purpose or legacy. Finding that significance is a very personal journey; however, most successful people discover that aligning all the components of their lives (personal finances, business success and family satisfaction) leads to a sense of liberation that includes financial freedom as well as peace of mind.
This is the final article in a five-part conversation about this journey to significance. After recognizing the benefits of integrated planning and overcoming the barriers that often prevent it, you’ve attained a clear idea of what may be next for you. You have a personal life vision and you are viewing the business as an investment, with a carefully selected team of experts beside you as you move forward with planning and implementation.
Now it’s time to get all of the people who are important to you, including your family and your management teams, prepared for what’s next. These three groups of people care about both you and the business, but their interests aren’t always completely aligned.
Minimize conflict based on competing interests
When individuals wear two or even three hats, as is common in a family business, it’s sometimes tough to make decisions that simultaneously advance all the economic and personal interests at stake. To accomplish your goals, it’s imperative to understand the motivation and dynamics of the various groups.
- Those with an ownership stake in the business are motivated by issues such as return on investment, dividends/distributions, wealth creation and control of the business.
- The business management team is driven by conditional loyalty, focused on delivering measurable near term results and jostling for position to some degree in a competitive environment. That’s just how businesses work.
- Your family, meanwhile, is motivated by unconditional loyalty, working in a spirit of equality and cooperation (we hope) and sharing the experience of wealth consumption – wealth that often flows from the business, directly or indirectly.
The financial aspects are highly technical, but the people side can be even harder to tease apart and address appropriately. And at the end of the day, we all want to have great weekends and holidays with our families and great ongoing rapport with our business teams. We definitely want to avoid resentment, conflict and tension within or between any group.
Thinking specifically of your business, how many subgroups of people with potentially competing interests can you identify? Where do you anticipate conflicts that could arise as you roll out and communicate your vision? Difficulty in making a decision often indicates you’ve identified a potentially thorny issue. Examine what’s at the root of the difficulty. Are you worried about hurting someone’s feelings? Are you unsure about the right choice for yourself, for the business or for someone else’s economic interests or personal preferences?
In anything that involves change, emotions become more intense as the stakes increase. One strategy that can help you preserve peace and facilitate unity is to learn how these various groups (and the individuals they represent) define success in life, in finances and in business. What’s important to them? The answers will vary between groups and even within each group.
Prioritize clear communications and shared understanding
Communicate your plan to your business team and your family with as much clarity as possible. Many business owners find it helpful to involve family therapists or coaches in this process, because the dialogue and feedback between owners, management team and family members are crucial when setting goals and making decisions.
Professional facilitation can help you prepare for the interaction and make the most of the time with everyone together to share, hear feedback and build trust. Whether on your own or with a facilitator, it is important to walk toward the conflict and difficult conversations that may arise rather than avoiding them, and continually strive for two-way communication.
Try to create a dialogue, ideally using a workshop structure. Workshops are timed and designed to be collaborative. They are generally much more interactive, more positive and result in greater buy-in than other types of meetings or presentations – partly because their structure allows everyone’s voice to be heard and valued. Stop, Start, Continue workshops are also particularly effective for discovering underlying issues that need to be addressed.
Hear all of the voices. Ask each group or each individual about their wishes, and their plan for selling or keeping the business. Do they see the business in growth mode, or in harvest mode? All these opinions matter, but ultimately, the decision is still yours. At the end of the workshop, you can fine tune your vision and have a better idea of how to move forward.
Like financial planning, these interactive sessions are not “one and done” events. Create a continual cadence here, too, so that everyone stays current on the plan and the progress that’s taking place.
Having these conversations can be the hardest part of creating the legacy you want. And yet, what is the cost to your legacy of not having these conversations? With this step you will find the peace of mind you need to move forward when you’re ready, knowing you’ve achieved your goals for the business and for yourself, and excited to enter your next phase.
There is much to consider and a lot of work to do on the journey from success to significance, but you don’t have to go it alone. The team at RKL encompasses the diverse expertise and proactive mindset required to make the process beneficial for you, your business and your family. Use the form below to reach out and start the conversation.