| I hope everyone had a great Thanksgiving
| |
| | resentments and complacency. Teamwork is
|
| and looking forward to an even better
| |
| | essential and effective communication is
|
| Christmas. I personally am now getting
| |
| | critical. It is of paramount importance
|
| into the Christmas spirit after spending
| |
| | that employees are recognized as the true
|
| all day Saturday and most of Sunday
| |
| | reason for success. Family issues must
|
| putting up the lights outside and helping
| |
| | not penetrate the business environment.
|
| decorate the tree. As this year comes to
| |
| | Holding family business meetings, off
|
| an end and we celebrate the holiday
| |
| | site, on a regular basis is highly
|
| season, most of us have a lot to be
| |
| | recommended.These meetings should be used
|
| thankful for. I know I count my blessings
| |
| | to air feelings, check boundaries and
|
| everyday and look for opportunities to
| |
| | clarify roles and responsibilities as
|
| reach out to others that may need help,
| |
| | they are being played out. The President
|
| support or encouragement. Have a
| |
| | must keep his finger on the pulse of the
|
| wonderful holiday season and a prosperous
| |
| | company culture and environment. Family
|
| New Year. Reach out to someone.If you
| |
| | members must be challenged as issues
|
| missed Issues #1 & 2, e-mail: for
| |
| | arise that are detrimental to the long
|
| copies of these issues.This month's issue
| |
| | term success of the company. Some
|
| contains:- The Housing Bubble --- Is It
| |
| | companies create a "Code of Conduct" just
|
| Finally Ready to Burst?"- First in a
| |
| | for this reason. Regular confidential
|
| series on "The Challenges Facing Family
| |
| | employee surveys are also a useful tool
|
| Owned Businesses"--- How can you turn
| |
| | in this regard. (E-mail for a
|
| over your business to your children
| |
| | complimentary copy of "A Guide to
|
| without creating
| |
| | Leadership Succession in the Family
|
| chaos?- Kids and Guns- 15 Revealing
| |
| | Business")It's your company, it's your
|
| Questions To Ask A New Sales
| |
| | legacy and when all the cards are played
|
| Candidate- Client Corner --- "My Kids
| |
| | it is still ultimately your decision.
|
| Can't Cut It"The Housing Bubble --- Is It
| |
| | Listen to your employees, listen to your
|
| Finally Ready to Burst? ---- Economists
| |
| | executive team, get some outside advice
|
| have been predicting the burst of the
| |
| | and then ----- trust your instincts as a
|
| bubble for the past five years. Every
| |
| | professional business person. Remember,
|
| year they have been wrong. 2005 was
| |
| | you can always sell the business or bring
|
| supposed to be the year when things
| |
| | in an outsider as
|
| really started to slow down. Low and
| |
| | President._______________________________
|
| behold, 2005 was another banner year.
| |
| | ___________Kids and Guns ------ I'm
|
| Those in the building supply business are
| |
| | probably going to get a lot of negative
|
| sitting around smiling as they count the
| |
| | feedback about this but so be it. Just
|
| profits. I am not an economist, thank
| |
| | prior to sitting down for Thanksgiving
|
| God, but maybe, just maybe the economists
| |
| | dinner I was reading the local newspaper
|
| are going to finally be right as some
| |
| | and came across an article titled, "How
|
| signs are beginning to show that may
| |
| | young is too young to hunt?" The
|
| indicate a slow down in the housing boom.
| |
| | newspaper had a picture of a young boy, 6
|
| And of course, the auto industries
| |
| | years old holding a .223 caliber rifle
|
| problems, specifically General Motors
| |
| | with a scope. He was all dressed up in
|
| with their recent layoffs and plant
| |
| | camouflage gear. The article talked
|
| closure announcements just adds strength
| |
| | about this young boy killing his first
|
| to this conjecture. What's the old
| |
| | deer when he was five years old with one
|
| saying? "So goes General Motors, so goes
| |
| | shot from his .223 caliber rifle. The boy
|
| the economy."Sales of existing homes fell
| |
| | himself was excited as he talked to the
|
| almost 3% in October and the decline
| |
| | reporter."I shot it right behind the
|
| could have been higher except for the
| |
| | front shoulder. Dropped it right in its
|
| demand created by the surge of
| |
| | tracks," the boy said. This boy of six
|
| Hurricanes, especially Katrina. The level
| |
| | stands 4 feet tall and weighs 50 pounds.
|
| of unsold homes in October was at its
| |
| | He's a good student that earned an award
|
| highest peak in nineteen years. Some of
| |
| | for responsibility in kindergarten that
|
| this may be attributed to the fact that
| |
| | year. KINDERGARTEN!But he'd rather be
|
| prices have risen at a pace not seen in
| |
| | hunting. "I like it," he said. "Shooting
|
| twenty five years. A chief real estate
| |
| | a gun and shooting at the animals and
|
| economist stated; "The housing boom has
| |
| | killing them."The article went on to talk
|
| likely passed its peak. (We have heard
| |
| | about an eight year old girl that made
|
| this before) The boom is winding down. I
| |
| | headlines last month by shooting the
|
| expect continued softening in housing."
| |
| | first black bear of the season. This was
|
| (David Lereah, chief economist for
| |
| | in Maryland and there is no minimum age
|
| Realtors.)Economists also predict that
| |
| | limit for hunting. You have to be sixteen
|
| the buildup of unsold homes across the
| |
| | or eighteen in most states to drive a car
|
| nation would dampen the surge in prices
| |
| | but you can shoot a .223 caliber rifle
|
| that saw 69 cities report double digit
| |
| | with a scope at 5 years old. Now, I have
|
| price increases this summer compared with
| |
| | to say that although I am not a hunter, I
|
| third quarter 2004. Another prediction is
| |
| | am not opposed to hunting. I am also not
|
| an additional ½ point increase in
| |
| | opposed to guns. I own one myself. After
|
| interest rates by June of 2006 which
| |
| | all, it's legal to carry a concealed
|
| could create a slow down in price
| |
| | weapon in Florida (It's a matter of state
|
| increases to about 5% next year.In
| |
| | pride that we return fire in a drive by!)
|
| reference to new construction, it also
| |
| | But, I do shudder when I think about a
|
| has shown signs that the bubble may be
| |
| | five or six year old in the woods with a
|
| ready to burst. Housing construction and
| |
| | .223 caliber weapon, even if they are
|
| new building permits were down sharply in
| |
| | with their Father who may be an expert
|
| October. The Commerce Department reports
| |
| | hunter. A .223 caliber rifle can kill
|
| that construction of new homes and
| |
| | someone or something a mile away. Beyond
|
| apartments fell by almost 6%, which was
| |
| | that, how do we determine that the
|
| the biggest decline in seven months.
| |
| | maturity level and the responsibility
|
| Applications for new building permits
| |
| | level of a six year old are such that
|
| fell almost 7%, which is the biggest
| |
| | what is learned about weapons in the
|
| decline in six years. Nariman Behravesh,
| |
| | woods stays in the woods when that child
|
| another expert chief economist stated,
| |
| | begins to mature?Yes, the federal
|
| "We are likely to see a steady downward
| |
| | government spent a lot of money on a
|
| trend in housing activity over the next
| |
| | study that said, "Guns do not turn
|
| few months. Mortgage rates are at the
| |
| | children into criminals." This study
|
| highest level seen in more than two
| |
| | concluded the best way to reduce firearm
|
| years." National Association of Home
| |
| | related violence is to buy them a gun and
|
| Builders said a new survey showed builder
| |
| | teach them how to use it responsibly.
|
| optimism fell in November, the largest
| |
| | Give me a Break!Let's not forget, guns
|
| amount since the September 11th
| |
| | are unregulated consumer products. In
|
| terrorist's attacks.So, is the bubble
| |
| | Texas guns are said to kill six children
|
| ready to burst? Many economists seem to
| |
| | and teenagers every week of every school
|
| thinks so. However, the statistics cited
| |
| | year. I personally believe that guns and
|
| have been cited in the past. The
| |
| | kids are a volatile combination. Between
|
| predictions of a bubble burst have been
| |
| | 1996 and 2000, 1,541 children died in
|
| reported in the past. On the other hand,
| |
| | Texas from gun violence and for every
|
| some economists disagree at least
| |
| | child that died, four others went to the
|
| partially. David Seiders, chief
| |
| | emergency room for gun related injury.
|
| economist for home builders stated that
| |
| | Six out of ten child suicides are
|
| he believed that sales of both new and
| |
| | completed using guns. And this is just in
|
| existing homes, while still setting
| |
| | Texas.To close my RANT and OUTRAGE about
|
| records for a fifth consecutive year in
| |
| | a five year old with a .223 caliber
|
| 2005, will only see a small 5% decline in
| |
| | rifle, I want to site a project called
|
| 2006. This would represent a very soft
| |
| | the "Lion & Lamb Links". This was a
|
| landing (5% is not much considering the
| |
| | study that asked the question, "What do
|
| growth we have experienced over the past
| |
| | you think your pre-schooler would do if
|
| five years). Do they really know? Who
| |
| | he or she found a real gun---- after
|
| knows? Maybe that's why Roosevelt said
| |
| | repeatedly warned NOT to touch a gun."
|
| he would only deal with "One Armed
| |
| | The results of this project are
|
| Economists." So they couldn't say, "On
| |
| | shocking.First a police officer was
|
| the other hand"...Be cautious in 2006.
| |
| | brought into a class of 60 children. His
|
| Don't panic but don't bet the farm.
| |
| | message was clear and precise. "Don't
|
| Initiate a contingency planning process.
| |
| | touch guns --- they are deadly and
|
| If you don't need the plan in 2006, so
| |
| | dangerous. If you see a gun, leave the
|
| what, sooner or later the economists
| |
| | area. Tell an adult." The children were
|
| might get it right and that contingency
| |
| | asked to repeat his words and they could
|
| plan that you have tucked away will
| |
| | answer his questions. They were later
|
| become
| |
| | left alone with disarmed guns and the
|
| invaluable.______________________________
| |
| | majority of the children picked them up
|
| ____________First In A Series On Family
| |
| | and shot everything in sight. This was
|
| Owned Businesses------ In 2006 we will
| |
| | reported by Hardy in a NY Times
|
| try to cover many of the issues and
| |
| | editorial.The second study with a
|
| challenges in "The Howl" that face
| |
| | different group of children lasted five
|
| privately held family owned businesses.
| |
| | days. The children were instructed on how
|
| Every family owned business faces
| |
| | to make good choices, how to resist peer
|
| difficult challenges. Readers are
| |
| | pressure and how to distinguish toys from
|
| encouraged to e-mail with comments,
| |
| | dangerous objects, guns. The results were
|
| questions and topics for discussion
| |
| | the same. When left alone the children
|
| related to the challenges faced by family
| |
| | began playing with the guns just as group
|
| owned businesses.How can you turn the
| |
| | one did. Most of the six year olds could
|
| business over to your children without
| |
| | tell the difference between the toy guns
|
| creating chaos--- This is probably the
| |
| | and the real guns but they played with
|
| toughest question any business owner that
| |
| | them anyway.Ask yourself, would your kid
|
| has family working in the business will
| |
| | play with a gun, even if you trained him
|
| ever face. However, the answer is simple.
| |
| | in the woods to hunt? Does your six year
|
| The answer is..... It depends. It depends
| |
| | old have the maturity to handle the
|
| on how well you (the owner) have prepared
| |
| | knowledge about something as deadly as a
|
| yourself and your child for this
| |
| | gun?I apologize in advance to my gun
|
| transition. Have you planned this out?
| |
| | distributor friends. But I've got to say,
|
| Has your successor been trained,
| |
| | I would be awful nervous hunting in the
|
| developed and prepared for the
| |
| | woods knowing there were 5, 6, 7 & 8 year
|
| transition? This is pretty easy if you
| |
| | olds in those woods with loaded rifles.
|
| only have one child in the business and
| |
| | In fact, you won't catch me near the
|
| he/she just happens to be the next Jack
| |
| | woods during hunting
|
| Welch of wholesale distribution. This
| |
| | season.__________________________________
|
| child has worked outside the business for
| |
| | _____________________________15 Revealing
|
| someone else for a minimum of five years.
| |
| | Questions To Ask A New Sales
|
| They have completed their MBA and they
| |
| | Candidate1. Tell me about why you want to
|
| worked their way up in your organization
| |
| | succeed at sales.2. Where does your sales
|
| starting in operations or customer
| |
| | passion come from?3. What is the last
|
| service. They don't walk around with
| |
| | sales book you read?4. Tell me about the
|
| their silver spoon visible and they don't
| |
| | last book you've read on
|
| wear their family title on their sleeve.
| |
| | creativity.5. Tell me about the biggest
|
| "Piece of Cake!"Let's face Reality---
| |
| | sale you ever made.6. What was the
|
| That scenario, although it certainly does
| |
| | biggest reason you got it?7. Tell me
|
| exist, is the exception and not the rule.
| |
| | about the biggest sale you lost.8. What
|
| In most cases privately held businesses
| |
| | do you say when a prospect says, "I want
|
| generally have several family members
| |
| | to think it over"?9. What do you say when
|
| working in the business. When the
| |
| | a prospect says, "I'm satisfied with my
|
| president has more than one child in the
| |
| | present supplier"?10. What do you say
|
| business, things start to get more
| |
| | when a prospect says, "Your price is too
|
| complicated. Before we dive into that
| |
| | high"?11. How often do you listen to or
|
| challenge, "How do we select the next
| |
| | read personal development
|
| President?" let's review a few
| |
| | information?12. When did you attend your
|
| statistics.- Family business is the
| |
| | last seminar?13. How do you improve your
|
| driving force behind the US economy
| |
| | presentation skills?14. What is your most
|
| providing over 50% of our employment- 59%
| |
| | creative approach to follow-up?15. Give
|
| of family owned businesses have only 1 or
| |
| | me your 30-second personal commercial.
|
| 2 owners- 25% of family owned businesses
| |
| | Your elevator speech.These are just a few
|
| surveyed in 2004 stated they would seek
| |
| | examples to get you started in the
|
| non family member CEO's for
| |
| | interview._______________________________
|
| succession- Key areas that family owned
| |
| | ___________Client CornerRickI just turned
|
| businesses seek advice and counsel on
| |
| | 70 years old. I am ready to turn over the
|
| include:--- Strategic Planning---
| |
| | reigns of my company to one of my three
|
| Organizational Design--- Operational
| |
| | sons. I own a ____parts distributor with
|
| Effectiveness--- Leadership
| |
| | revenues that should exceed $48 million
|
| Development--- Succession Issues---
| |
| | by year end 2005. All three have worked
|
| Compensation--- Sales Effectiveness---
| |
| | in the business for the past 15 years. I
|
| Risk ManagementNow, how do you decide on
| |
| | don't want to sell and I really want one
|
| who should be the next President? If you
| |
| | of my sons to carry on the family legacy.
|
| are not one of the lucky few described in
| |
| | My problem --- I don't know which son to
|
| the opening scenario and you have
| |
| | hand the Presidency to. I hired a
|
| multiple family members working in the
| |
| | consultant to do an assessment to help me
|
| business, your stress level is already at
| |
| | make a decision. The consultants, after
|
| a high point. First, many if not all
| |
| | doing a battery of tests and interviews
|
| family members working in the business
| |
| | determined that my current Vice President
|
| have feelings of entitlement to some
| |
| | of sales is the only internal candidate
|
| degree. This is generally true of at
| |
| | that is qualified to take over as
|
| least one if not all of the president's
| |
| | President. This gentleman has been with
|
| kids. Choosing the next president becomes
| |
| | me for 25 years, he's a great guy, and I
|
| even more difficult if the children have
| |
| | have no doubt that he can do the job but
|
| used their name as a title instead of the
| |
| | he is not one of my sons. To complicate
|
| actual title of the job function they
| |
| | matters even more, the son that I was
|
| performed and the position they hold in
| |
| | leaning towards handing the Presidency to
|
| the company (This is often unintentional
| |
| | got the worst rating of anybody on the
|
| and some kids don't even realize it).
| |
| | 360 degree review. In fact, the
|
| This difficulty increases exponentially
| |
| | consultant privately advised me that I
|
| if none of the kids have demonstrated a
| |
| | should consider getting this son out of
|
| high level of competence, respect for all
| |
| | the business before my transition into
|
| employees, leadership skills that pattern
| |
| | retirement. They also advised that one of
|
| the servant style and at least some
| |
| | my two remaining sons may be able to step
|
| promise of potential to fill the
| |
| | it up and take over the reins in three to
|
| president's shoes.Although the majority
| |
| | five years. He is 45 years old now. I
|
| of parents would prefer that their
| |
| | can't wait that long to retire. What do
|
| children take over the business and carry
| |
| | you recommend?George ------ Mid WestDear
|
| on the family legacy, this is not always
| |
| | George:You are facing quite a dilemma.
|
| the best option available. I know it is
| |
| | Obviously, the easy answer is to sell the
|
| difficult for any parent to admit that
| |
| | business. However, I take it from the
|
| their child may not possess the skill
| |
| | passion in your memo that you will not
|
| sets necessary to take over as President
| |
| | consider that option. At 45 years old
|
| of the company. However, that situation
| |
| | your son should be ready to take over as
|
| actually does exist in many family
| |
| | president now. If he is not ready now,
|
| businesses.What are the options if Junior
| |
| | chances are not great that he will be
|
| isn't ready? --- The first two questions
| |
| | ready in 3 to 5 years. You haven't done a
|
| to ask yourself are: "Will Junior ever
| |
| | very good job as his coach and mentor.
|
| be ready?" "Does Junior have the ability
| |
| | That being said, if you are adamant about
|
| to learn how to become President?"As
| |
| | one of your sons taking over the business
|
| difficult as it is to accept, your
| |
| | you might want to consider this scenario.
|
| answers to these questions alone are not
| |
| | Appoint your VP of sales as your
|
| good enough. If you have a Board of
| |
| | successor with the understanding that one
|
| Directors, you should solicit their input
| |
| | of his primary responsibilities is to
|
| and recommendations. Hire a Human
| |
| | develop your son to take over the company
|
| Resource Consultant to do an assessment
| |
| | in three years. Make sure that you are
|
| of not only Junior but other executives
| |
| | generous to this VP in constructing a
|
| in your organization that may be
| |
| | contract that makes him well if something
|
| qualified for the Presidency. Conduct 360
| |
| | happens to you and your sons decide to
|
| degree reviews to get input from peers
| |
| | throw him off the bus. If your son
|
| and subordinates. Precisely define the
| |
| | doesn't develop enough to really run the
|
| Presidents role and responsibilities and
| |
| | company in three years, you might
|
| match these requirements to Junior's
| |
| | consider leaving your former VP of sales
|
| skill sets. If you don't have a board,
| |
| | in the role of President and appoint your
|
| create one before the transition. Include
| |
| | son CEO. He could be the outside face for
|
| the following action items as part of the
| |
| | the company, carryon the family name but
|
| transition plan:- Create a development
| |
| | have your President run the business on a
|
| transition training program for the new
| |
| | day to day basis. This assumes that your
|
| President (This should be designed as an
| |
| | son is willing to play that role and
|
| internship)- Clearly define the former
| |
| | supports the President in his day to day
|
| Presidents role after the transition.
| |
| | role. It is not the ideal solution but it
|
| Will he remain and come into the office?
| |
| | is an option that can be considered.
|
| Will he become Chairman of the Board?
| |
| | However, be very cautious in determining
|
| What responsibilities will the former
| |
| | what your sons are willing to accept and
|
| President retain?- Manage the
| |
| | how they will react. A family legacy
|
| expectations of other family members. Do
| |
| | means nothing if the business goes down
|
| not allow family tension to create
| |
| | the tubes due to internal strife caused
|
| tension in the business. This could lead
| |
| | by intolerable family issues. This is a
|
| to employees taking sides.- Use your
| |
| | short answer that requires a lot more
|
| attorney to cover all legal
| |
| | discussion.Good Luck and let me know how
|
| issues- Create a real Board of
| |
| | things progress.Rick E-mail for prior
|
| DirectorsThe Family business can be
| |
| | issues of The Howl. Dr. Rick Johnson ()
|
| complex--- The family business structure
| |
| | is the founder of CEO Strategist LLC. an
|
| can be complex and confusing. This is
| |
| | experienced based firm specializing in
|
| especially true when numerous family
| |
| | leadership and the creation of
|
| members work in the business. The
| |
| | competitive advantage. Rick received an
|
| business is composed of interdependent
| |
| | MBA from Keller Graduate School in
|
| relationships between functions and
| |
| | Chicago, Illinois and a Bachelor's degree
|
| people that depend on the ability to work
| |
| | in Operations Management from Capital
|
| toward common objectives. A family owned
| |
| | University, Columbus Ohio. Rick
|
| business with multiple family members has
| |
| | completed his dissertation on Strategic
|
| twice as many opportunities for mistakes,
| |
| | Leadership and received his Ph.D.
|
