Owners strategy enables flexibility and growth in Family Business

ma 12. maaliskuuta 2018 11.46.00

At some point in the family business evolution, for some sooner than other, you end up with family businesses run by external people and the owners operational roles are reduced over time. Growth plans and risk scenarios are presented by management and approved by the board, and the owners are forgotten in the process? If you have a success story, fine no problem, but when the business fails the problems ends up in the hands of the owners.

Peter Therman's blog has been previously published in LinkedIn 12.2.2018.

How many times does the external management ask the owners of their views on growth rate, cash flow and risk? It depends of course on owner/family engagement but quite often there is little discussion on this topic.

I have experienced the value of interaction between Owners, Board and Management as extremely fruitful, but occasionally also painful.

By aligning interest through the governance structure, you align interests of all parties involved, Owner-Board-Management, and creates an energy that creates growth and agility without compromising the owners collective long term dream. Flexibility comes from shared goals on risk profile, leverage and well-defined roles and responsibilities.

In a structured process you create cohesion, understanding and deeper commitment behind a common dream through the whole governance structure

Remember to start (early) the dialog with the owners, have an active contact with the board/management on your interest and dreams (so that they do not get too unrealistic) and when ready get the buy in from Owner-Board-Management.
 

Peter Therman, Senior Advisor, MPS Family Governance Advisory

Kirjoittaja: Peter Therman  Peter Therman