A simple 3-step process can help your family grow through change
We are joyfully anticipating the arrival of our third grandchild any day now, in Arizona. And at the same time, we are concerned for my 95-year-old mother in Illinois, who has moved in with my brother and sister-in-law to receive care while recovering from surgery. I hope someday that baby Elena will meet her great grand-nana, Marilyn. (The picture with this post is Marilyn holding Elena’s big brother Javier a couple of years ago.) There is something about seeing the oldest living family member holding the youngest that anchors the value of family love in your heart.
This tension between continuity and change is precisely what challenges family businesses today. Is your business facing succession, or needing to make a strategic pivot? Are you coming to terms with a major change in family relationships through death or divorce, or coping with unanticipated shifts in the marketplace? Have you sold a legacy business and you’re wondering what’s next? This post is for you.
Family Businesses Must Deal with Change
Family business researcher John L. Ward noted twenty years ago that the pace of business was accelerating so quickly that the traditional model of family business leadership had become obsolete. For a long time, the typical pattern was that a founder, after some trial-and-error, would hit upon an idea that clicked with a market opportunity, and run with it until it peaked out. Then his or her successor would create a new and different product or service and repeat the pattern. But that model is no longer viable:
“A family business cannot endure in an environment where competition is changing and intensifying at a tremendous pace unless it is led in a way that it can renew its strategy more often than it changes leaders.
“The head of a family business today must be able to lead an organization through two or three or four waves of strategic renewal during the 20-year or 30-year period that she is in charge.” (Perpetuating the Family Business, Palgrave, 2004 p. 46)
Family businesses must renew strategy much more often than they change leaders. But how? Here’s one proven approach.
A Practice for Cultivating Renewal in Response to Change
Barton Parrott describes a simple but effective approach to cultivating renewal in response to change in Chapter 14 of Wealth of Wisdom: Top Practices for Wealthy Families and Their Advisors by Tom McCullough and Keith Whitaker (Wiley, 2022). He allows that change is hard, then says:
“But life is a cycle of endings and beginnings, of completion and renewal. Understanding how to master this cycle, instead of being mastered by it, is an essential practice for families who want to prosper together through multiple generations.” (p. 97)
After experiencing a major change, families mastering the cycle of completion and renewal ask three simple questions and follow where they lead:
- What’s true now?
- What’s possible?
- What’s our plan?
The first question launches the Discovery phase, taking stock of the current situation – both challenges and opportunities – how we got here, and what matters most. The second question launches an Exploration phase in which we expand beyond incremental thinking to examine options and generate choices. The third question forces us to narrow our choices, make decisions about Implementation, and create a written plan of action.
For example, Parrott tells of a family business with a long and successful history as a construction firm. At first, the family heir felt compelled to carry on their legacy as a construction firm. But working through these questions enabled the family to see that the market had changed, and their most lucrative opportunities were now in real estate. They saw the new possibilities and made a shift.
Family Business Facilitators is using this practice to help business-owning families experiencing major change find what’s next for them. We facilitate at least one session for each of the three phases, paced according to the family’s preferences and availability. It has been used by sibling partnerships after selling the legacy business, by the rising generation exploring legacy-honoring options for the future of their family, and by families assessing the impact of their efforts to give back to their communities through philanthropy.
Benefits of the Process
Families who work through these questions together experience several benefits. It gives them a shared, grounded view of their current reality, in which there may be things to mourn as well as things for which to be grateful. It helps them clarify what matters most to them financially, strategically, and interpersonally. They dream together, think creatively, and explore new possibilities. In time they unite around a common vision with a concrete plan of action, giving them direction and momentum.
In a word, they become more adaptable.
Personal Adaptability: Brea Starmer
Brea Starmer is a gifted business leader who’s among the 1% of female entrepreneurs who make more than $1m. She grew up in a family business – her father owned a bar. Brea learned to embrace transition early in life. As a guest on Laurie Barkman’s podcast, she tells the story: “I was four when my parents divorced. And every Sunday, I would pack a bag and I would move from house to house. From four to 18, every Sunday I was moving. … So, transition and change is sort of something that I was born into, and was really fine with, at an early age.”
Adaptability is one of the top traits of successful entrepreneurs. Four years at Microsoft were followed by early roles in a series of start-ups. Then six years ago Ms. Starmer founded Lions and Tigers, a professional staffing and workforce solutions partner. Her original vision was to “give moms an opportunity, to make them the richest part of our society,” but it has expanded dramatically to provide opportunities for others who’ve been underrepresented in traditional ways of working.
Throughout the many changes and strategic adaptations, her core values have remained constant. They are reflected in the explanation she gives for Lions and Tigers’ success: “Simply treating people with respect, with dignity and agency, has been really counterculture and I hope that that becomes a more infectious and attractive way to work.” We do, too.
Contact Us, Develop Family Adaptability
Working through Parrott’s three questions together enables a business-owning family to develop the same adaptability that Brea Starmer has leveraged personally for business success. Contact us to explore how our process can help your family go from confusion and disorientation to a renewed sense of agency, deeper connection, and common purpose.
