What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

5 Pesky Plights Hurt a Family Business (Part 5): The Sacred Cows

cowI know you’ve run across Sacred Cows (“SCs”)…we all have in our business careers or personal life.

Dictionary.com defines a Sacred Cow to be: “an individual, organization, institution, etc., considered to be exempt from criticism or questioning”.

This is the final post in my five-part series that explains how 5 particularly disabling conditions can negatively impact the value of a family-owned company. I saved this particular subject for last. I find that the presence of ‘bad’ Sacred Cows is the most emotional and highly personal of all of the previously discussed performance inhibitors found in this series. 

Good SCs, like a popular brand or an established, competitive business practice, are legacies that should not be messed with. However, ‘bad’ SCs:

  • are difficult to change
  • are hard to eradicate
  • can’t be spoken about
  • can have a profound, severe impact on operations

A family-owned company’s bad Sacred Cows wander around these pastures:

  1. People
  2. Products (or Services)
  3. Places
  4. Past Behavior

People: unqualified family members with significant roles

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What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

5 Pesky Plights Hurt a Family Business (Part 3): The Handoff

HandoffI ran outdoor track both in college and high school. Since I was a fast runner (back in the day) I always ran one of the legs of the 4×100 and 4×200 relay teams. Our relay teams practiced daily on perfecting the handoff – passing the baton. We had the relay leg transitions down pat. Unfortunately family owned businesses may not plan for a leadership transition and may bungle, delay or simply avoid the handoff to the next generation of family leaders or to non-family executives.

This is the mid-point in my multi-part series that explains how 5 particularly disabling conditions unique to a family business can exacerbate business underperformance.

This post is about companies with non-existent succession/transition plans. When owners can’t or won’t let go, four of the 9Stucks (Ditch, Moment, Slow Lane, and Another World) get really amped up and push the stuck company into a deeper hole.

Family company leaders often stay in their roles too long.  But staying too long is not the problem; being in a zone of leadership indecision creates troublesome ripples throughout the entire company.

FamilyCo was one of my stuck manufacturing clients. I was hired by the company/family to do a ‘fresh eyes’ assessment of their business. The company wasn’t in trouble but it had hit a wall and was stagnating. It didn’t take me long to figure out there were issues with the senior team, the company’s competitive position and a number of important operational functions.

Some facts:

  • Jack (second generation) was the CEO and the son of the founder; at age 70 he worked full time at FamilyCo
  • Jack’s 2 children (son and daughter) both worked for the company. The son (Bill, age 42) ran operations (manufacturing and engineering). The daughter (Susan, age 40) was head of marketing. Bill and Susan worked well together.
  • Sales was led by a non-family member and he reported directly to Jack. In the last few years, the sales team had experienced significant turnover.
  • The CFO was also a non-family member and had worked for Jack for many years. He was nearing retirement. His duties included many administrative functions and human resources.
  • There was no Board of Directors/Advisors

The children told me: “Dad was the driving force to get the company to where it is today, but now we think he has blinders on; he doesn’t acknowledge all the changes in the industry, the shifting customer demands or the need to upgrade our facilities, systems and equipment. He is living in the past. You (me) need to talk to him about letting us run the company.”

Okay…now what?

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What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

5 Pesky Plights Hurt A Family Business (Part 1): The Seesaw

SeesawFamily-owned companies are plentiful in number and unique in character. Like any other type of company, these businesses are not immune to being infiltrated by the 9Stucks. In fact, a family business is fertile breeding ground for a unique 9Stucks mix that is often configured with a twist and a flair for the dramatic.

One blog post can’t do justice to these ‘pesky plights’ so I’ve created a 5-part series. Each post describes one misstep of family business leadership that can exacerbate the 9Stucks.

  1. Family needs vs. business needs: They are strikingly out of balance. (This is Part 1: The Seesaw)
  2. Strategic direction is stymied: Conflict over growth vs. maintaining the status quo freezes the business in its tracks. (Part 2: The Strategy Freeze)
  3. Transition/succession plan is non-existent: The owners can’t or won’t let go. (Part 3: The Handoff)
  4. Governance and decision-making at the top is concentrated and insulated: There is a weak independent board of directors/advisors, or one doesn’t exist. (Part 4: The Bubble)
  5. Sacred cows graze in the company’s organizational pasture: Top leadership spots are based on birthright or longterm ‘family favorite’ status rather than skills. These sacred cows crowd out talented non-family leaders. (Part 5: The Sacred Cows)

One caveat: This series is not intended to be a detailed discussion of all the intricacies and nuances related to management of a family owned business. There is considerable published content focused on all aspects of the family business: research, writing, business groups, websites, and magazines.

I simply want to help identify and evaluate these 5 disabling conditions – and suggest ways to get rid of them.

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