Business Transitions

Family and Money Go Together Like Wine and Cheese - Sometimes It Works, Sometimes It Doesn't


Major transitions involving family can be just that, major! Like the title of this article says, wine and cheese pairings can be a wonderful experience, full of new experiences, and broadening your perspective.  However, they can also be horrible and result in bitter, abrasive, and really dissatisfying outcomes.  Obviously we all want to avoid some of the perils involved with family in life & busines transitions but also we want them to be memorable, positive experiences. Whether its a business transition, an estate transfer, or other kind of transition closely tied to family, their are complicating factors that, if left unchecked, can make a transition much much harder to get through.  Emotions can run high and complex during a family transition as opposed to many others.  Parent to child, sibling to sibling, or other relationship arrangements all have experiences and emotions unique to them. When something like a business or estate transition are required, the decisions, processes, and outcomes sought all become intertwined with the backgrounds brought to the transition.  There are ways to structure these transitions that respect and celebrate those backgrounds but also build-in mechanisms to allow all parties concerned to be heard as well as come to mutually beneficial outcomes.

My hope is some of my own lessons learned as well as applying some of my transition methodologies can help you in your future transitions involving your family - whether its in an estate, transferring ownership of a business to a child or other family member, or transitioning in some other way with your family business.  The goal of this kind of transition is to move through it with minimal stress but also reach everyone's required outcomes while having maintained positive working and personal relationships with one another.

In a previous article on general transition methods, I wrote about the 4P Method: Purpose, Picture, Part, and Plan.  Here I'll expand on that and talk more about the particularities of family transitions.  I focus on business exits and estate processing here but the 4P method along with other elements are applicable to all major transitions and are worth considering in preperation for them.  It's particularly important in the case of family transitions to spend some time in planning and preparing for the transition. Working through the 4P exercise in my previous article will be very helpful (and would have been for me in my past family transition experiences had I known what I do now!) but I'm going to add 1 more element of particular importance in this article and that is the Process. 

Focus on the Process


A plan suggests events, timelines, schedules, resources, and dependencies.  However, the Process (or method) you're going to employ during your family transition is just as important, if not more so.  There are particular methods that can be useful when processing an estate, for example, that will help value belongings and other items in a simple way so that everyone comes away heard, respected, and having a feeling of importance and belonging in the family.  In a family business transition, creating an agreed to process prior to actually beginning a transition can help alleviate much hardship, disagreement, and sour relations. First and foremost, designing a process you'll be using (or finding useful templates online, for instance) will help everyone to focus on the process and how it's working or isn't rather than all the baggage that a family transition can sometimes bring forward.  If everyone agrees to a mutually crafted and beneficial approach (and agreeing it's improvable along the way!) creates a means to divert tense energy back to the process, what's been agreed to, and if it isn't working, mechanisms to improve it.  This will enable everyone to navigate the potentially difficult maze of uncertainty in the transition by having a solid map everyone can work from.

For example, in a family business transition, a high level process could look something like this:

  1. Recognition of Successes - spend time celebrating the business, the obstacles that were overcome, the achievements made, and relationships built.  Single out specific occasions and individuals in the family (and other employees) and celebrate their contributions on a personal level.
  2. Recognition of Transition - spend time together acknowledging there is a transition required at some point in the future (could be near or long term) and what might be changing on an individual or organizational basis in routines, roles, assumptions, & relationships that are driving the need for transition.
  3. Define decision making process - this is the method by which you'll step through each facet of the business, management, assets, equity, finances, and more.  This should involve a review of Governance documents, current Profit and Loss statements, Balance Sheets, Cashflow Statements, Articles of Incorporation, and more to ensure everyone starts with an equal satisfactory understanding of the state of the business.  This is also where you should include things like dispute resolution triggers, means, and ends. This is really important to craft early so it's well understood by all parties. Even if you feel things are going swimmingly, I suggest having something written out and signed, so it's clear for everyone involved.  Even go so far as selecting a mutually agreed to independent mediator should things get really difficult. They are professionals at systematic approaches to arrangements, agreements, and transfers.
  4. Define Transition Strategy - similar to an "Exit Strategy" (which often implies an individual owners exit) a transition strategy is more holistic and includes direct (and indirectly) family members, ownership, and what the intended transfer structure will be.  It describes how the business will change, ownership and asset transfers, and more.  This is one way to get the high level (at this stage) Transition Strategy agreed to and in place to move forward with.
  5. Design the Transition - the goal here is to clearly describe the path of through what's Ending, the Uncertainty Stage, and New Beginnings.  What is success at these stages, for whom, what matters most and what matters least?
  6. Define the remaining 4P's - Purpose, Picture, Part, Plan.  Now that the 1-5 above are accomplished the remaining details of the 4P's should be relatively simple to define and agree to.  All of this will be imperfect and improvable but vastly superior to winging it or going forward on cursory verbal agreements.

In my past experience as a co-executor with my brother of my moms estate, I found some things we did were really useful, beneficial and important and when we deviated from our agreements, the baggage of our past as well as recent disagreements amplified the sour outcomes where they could have otherwise been avoided had we worked through something like the above process for an estate.  In my organizational improvement work at Boeing, when you're working across functional and organization lines, vertically and horizontally, focusing on a mutually agreed to process is a powerful way to keep people engaged, respected, and enjoying the experience. This is a big part of why I do the work I do, is to help take my own lessons learned, lessons I learn from others, and apply my expertise in engineering, management, strategy, and more for the benefit of my customers transitions.  Please don't hesitate to call and set up an initial consultation if you have or are in a family transition and could use some help creating a holistic approach that benefits everyone and maintains positive relationships.


Signs the Walls are Closing In and Your Organization Needs an Overhaul


"Our management is out of tune...They're more interested in power plays and finger pointing than they are about making progress and meeting their customer and employees needs.  This can't last forever, it seems like this place is crumbling and they're propping it up rather than the right changes that are needed..."

Does that sound familiar?  Maybe it's not your workplace or business, but perhaps it's one you work with, buy from, or have some other important relationship with.  As business people, it's really tough to work with an organization that seems pretty dysfunctional, isn't meeting its commitments and keeping up with responsibilities, or just plane old isn't doing it's job for you anymore.  What can be worse is if you're paying the organization and switching to something else it REALLY hard or costly for some reason or another.  You probably can see situations where the organization is just being propped up and holes patched but overall, the walls are coming down. This post is about recognizing symptoms of this "Closing In" stage of an organizations lifecycle and what might be done about it, from the inside or as a partner for the future on the outside.

The Closing In Stage

There are other, less kind ways to describe this stage.  One that comes to mind is a "complete train wreck in progress".  And no, despite what many people might think, this isn't EVERY organization out there.  This closing in stage is part of a typical organizational lifecycle.  What comes next is complete failure/death of the organization unless you make big transitions and beginning anew.  This stage can last quite some time and so can the next "death" stage as well and so often does not happen all at once.  I want to help readers identify the signs of this stage and propose some ways to transition back into a new stage of reinvention, renewal, or reorganization.

Symptoms of the Closing In Stage

These symptoms have some overlap with the Strategic Planning post I did a few weeks ago.  However, some bear repeating in the context of this transition.  This list is by no means completely comprehensive but should give you a good picture to work from.

  1. Organizational leadership can no longer speak to the "big picture" or ecosystem of the business.  They don't really have market and customer insight anymore, nor an awareness of the competitive landscape and what your competitive advantages are, and instead focus on maintaining order, structure, perpetuating formal or even informal power lines and reporting, reputation, or even just being stuck in a previous stage of the lifecycle.  Maybe they behave as if the company, it's systems, and perceptions are still about maintain prestige as an Institution, or varying flavors of the status quo.
  2. Policies and Procedures have become so monolithic, internally incoherent and contradictory, and people no longer point to them as any authority on "how things are done".  The term "ossified" comes to mind here.  The bureaucracy of the business has grown beyond just internal people and organizations and has been implanted so deeply in useless policies that people either hold to them and can't get work done (because they're so contradictory and confusing) or they disregard them completely.
  3. Endless streams of "initiatives, improvements, and changes" that don't seem to be connected, coherent, or aligned to longer term outcomes and necessities of the business.
  4. Race to the Bottom tactics - price wars, endless discounts, and the "commoditized" product or service, i.e. competitors are indistinguishable.
  5. Unexceptional work environment, i.e. your employee turnover is high and there doesn't seem to be a "team" or group that you can really describe about the people that work in your business.  There's no sense of "we" or very little at least.
  6. Management approaches (even from a single manager or owner organization) swing between micro-managing and overly autocratic or loose, hands-off, and "let it work itself out".  It's not so much about each end of the spectrum but rather than it oscillates so much.


While none of the above symptoms leads quickly and inevitably to death of an organization, they illustrate that path it's on and the likely destination which will happen sooner or later.  The idea with these solutions is that they are BIG transitions that involve a concerted and focused effort, organization wide, to transition away from this path of inevitable failure back onto a path of growth and success.

  1. Reinvention - this involves addressing your product or service at it's core. Maybe you need to take the resources, capabilities, infrastructure, and systems and graft them onto a new market space.  This involves making new market entry a clear focus for the business and, with proper planning, transitioning over to serving this new space and in so doing, transitioning and beginning anew.
  2. Renewal - perhaps you need to identify the future you need to get to and rather than needing to completely reorient the business to a new market, you need to breakdown and reengineer your policies, procedures, processes, and maybe even the people systems in your business.  This is deep work and takes a solid roadmap through the uncomfortable space of remodeling the business but worth it if this is what's needed.  This is often where I see "business model" improvements made, i.e. analyzing supplier and supply chain opportunities and moving on the best ones, or perhaps reorienting your distribution methods and channels.
  3. Reorganization - This route is probably the most common I've seen in the corporate world.  In some ways, a reinvention or renewal is what was really needed.  However, this route can be successful in that, if done correctly, it will restructure management and reporting lines to focus on the right things.  This means changing into a product/service area focus, process focus (often called functional), geographic, or customer oriented focus.  This goes for large corporations or small businesses.  You can recraft how your people and management see their focus and in so doing require that new processes be implemented, old ones tossed, and new measures of success be used.

This post was about exposing readers to this "Closing In" stage of the organization lifecycle and some major transitions that can take place to "get back on the rails" for continued success. If you need some help identifying the stage of your organization lifecycle you're in and what to expect next, or if you want to make a major transition that's you've been putting off, please Contact Me and I'll help prepare and manage your next big transition cost effectively and with best fit solutions.