Innovate and grow or maintain the status quo?
The process of making this basic strategic choice can be an exciting journey forward, or a source of conflict in a family-owned company.
Why? What causes a family company to be frozen in its tracks over this fundamental question? And what can be done to thaw the ice, or better yet, prevent the business from becoming Stuck in the Moment?
You may be thinking…’Conflict among the shareholders of a private company over strategic direction is common and good.’ You’re right! Debate over the best go-forward strategies and tactics can be healthy and productive. In companies that are not family owned, the conflict tends to resolve itself in a timely and orderly way. This is especially true in companies with outside institutional investors who don’t tolerate indecision for extended periods of time.
In some family-owned companies, the strategic discord festers and lingers. A ‘strategic fog’ permeates the boardroom, family gatherings and the company’s hallways and cubicles. Critical decisions are delayed and significant opportunities ignored. The disagreement can go dormant but then suddenly explode. This can be debilitating to the business and to the shareholders.
What has always intrigued me is not the presence of a rift over the strategic direction of a family business. My question is why the conflict becomes so pervasive and common.
My experience points to 10 ingredients:
- History and nostalgia
- Personality traits of the family shareholders
- Knowledge disparity
- Background noise
- Breakfast table scrambled eggs
- Cash (see Part 1 of this series – The SeeSaw)
- Mood of the day: comfort, fear, fatigue, ambivalence
- Lack of trust
- The family stew – a simmering salmagundi of any of the above
P.S. #’s 8 and 9 are smokescreens [Read more…]