Family businesses are the most influential factor in the health of the U.S. economy and they are the ONLY solution to our difficult economic times.

This statement might surprise many people but consider the statistics. According to Family Business Review Magazine (Summer 1996) family businesses comprise 80% of all business enterprises in North America. They account for 60% of total U.S. employment, 78% of all new jobs, 65% of wages paid (Financial Planning Magazine, Nov 1999) and 34% of these companies are listed on the Standard & Poor’s 500 Index. With those stats as a backdrop, it’s not surprising that nearly 40% of family businesses in America will be passing the reigns to the next generation over the next five years according to Business Week Magazine (August 11, 2003).

Yet the most incredible statistic by far was the one postulated by Robert Avery at Cornell University in his paper, “The Ten Trillion Dollar Question: A Philanthropic Gameplan.” Avery noted that by 2050, virtually all closely held and family owned businesses will lose their primary owner to death or retirement. Approximately $10.4 trillion of net worth will be transferred by the year 2040, with $4.8 trillion in the next 20 years.

The plain fact is that family businesses are in trouble because succession plans are quite obviously less and less effective. This is primarily due to what I call the “motive gap” between generations. According to an article appearing in the Boston Globe on May 4, 2003, only 40% of family owned businesses survive to the second generation, 12% to the third, and 3% to the fourth. It s also a known fact that these companies are most successful when run by a family member. Family members have the passion, drive and purest motives to run the company in a way consistent with the founding member. While some of these companies will be successfully sold to those outside the family, these statistics represent a disturbing trend and concern for the future of family businesses and the American economy in general!

It doesn’t take a genius to figure out that the root of this problem, simply said, is that sons and daughters are not interested in taking over the family business. Now this may well be attributable to other interests and passions. Certainly this is understandable but it does beg the question of WHY they may not interested or excited about learning the ropes and assuming the reigns? I can tell you that after personally working with thousands of family businesses and in may cases counseling numerous reluctant second or third generation leaders this stems from significant generational differences. These differences can easily be reconciled but often both parties (parents as well as sons and daughters) seem to be completely oblivious as to the differences. The result of generational differences are often mistaken as ineffective work habits, personality flaws or other personal characteristic or attributes. Yet more often than not simply becoming aware of the differences in generational decision making, communication and leadership styles can resolve conflict and restore trust and continued harmony in the business.

This allows the business to thrive even in difficult circumstances.

If you’re in a family business and are interested in succession planning, send me an e-mail and request my free whitepaper on family businesses.

Yuk! It’s meeting time.

 Don’t worry you’re not alone. A recent survey by the Harvard Business Review revealed that 92% of meeting participants in corporate America view meetings as a supreme waste of time! Frank Robinson, CEO of Robison Helicopter says, “I’ve always felt that meetings are one of the most wasteful things in industry. We avoid having meetings as much as possible. Most decisions don’t have to have a meeting.” I’m not sure I would agree with this but I certainly understand WHY many take this position when asked about meetings. A meeting should be used to carry out communications, planning, setting policy, making decisions, or motivating a team. The most effective meetings are well planned and executed.   They should serve to bring forth the best in all team members – the best ideas, the best decisions, and the best follow-up. Here’s some tips on how to make your meetings more valuable, effective and hopefully a pleasure for all that attend: 1. Always send an agenda to all the participants in advance. The agenda presented at the start of a meeting just doesn’t cut it. Attendees can not prepare for a meeting if they don’t know the content and purpose of a meeting ahead of time. If no agenda exists ahead of time it is highly possible that there is no plan for the meeting. 2. Always begin the meeting with a statement of the goal and get everyone’s agreement. End the meeting with a quick review of the action items that have been established and who will do what and when it will be accomplished. 3. Never hold a meeting to learn the “status” of various initiatives. This is accomplished far more effectively by reports from team members. This can be done via email, written memos or even by using voice mail. When 5, 10 or 20 people are gathered together at a meeting to hear the reports of others, very little is being accomplished. 4. Brainstorming ideas is a good use of a meeting as long as there is a plan so that attendees can prepare their ideas in advance. Those ideas can then be collected quickly and efficiently at the meeting. However, attempting to brainstorm the content of a document at a meeting is a terrible waste of time. If a group must all agree on the contents of a document I recommend providing a draft to participants several days in advance, collecting feedback and doing a summary presentation of the collaborated draft to the group. 5. Create a system so that all the participants can contribute. There’s nothing worse than having just one or two members dominate the meeting while others passively stand by just listening. Often times those who speak the least have the best ideas or are fearful of disagreeing with the most vocal participants. Many times I have found that it is these very participants who will raise the most critical issues that need to be resolved. 6. If you are a facilitator of a meeting – BE PREPARED or cancel the meeting, know the goals for the meeting in advance, have a start and a stop time and stick to it and be prepared to facilitate any conflict which, by-the-way is a good thing. Having constructive conflict within a meeting is moth healthy and necessary to creating the most valuable and cost effective solutions. I hope this helps at your next meeting. Also I’d love to hear some meeting success or horror stories. Send them to: mark@markdeo.com. 

Over the last few weeks I’ve been talking about some of the intangible traits that define “who we are” or “who our company is.” We’ve been looking at Rule #11 from my Rules of Attraction: Who we are is more important that what we do.

In my last few Business Updates I wrote about Integrity, Vision and Enthusiasm. Today I’d like to look at another trait that makes up “who” we are – selflessness.

Henry Stimson, Secretary of War during World War II once said, “no one who is thinking of himself can rise to great heights.” It sounds nice. It looks good in quotes. But the reality is that this statement runs counter to what most people truly believe and how we live our lives. In fact it is the opposite of what most of us are taught as children. That is, we must FIGHT for what is ours. Even in school we teach our children evolution. We beat into their little heads – the survival of the fittest. Only the very best make it to the top. We make no bones about the fact that we live in a dog-eat-dog world. Where is selflessness in all of this? Don’t get me wrong I am in no way saying that I live up to this trait. I am ashamed to say that I often fail miserably at being selfless. I do think it is necessary that we illuminate the fact that those who have molded their character to a selfless mindset ultimately create attraction and bring about change.

There has already been much written on the lives of those famous selfless individuals who have changed the world. People like Gandhi, Mother Teresa and Nelson Mandela. I will not dedicate extensive discussion to their accomplishments in this book but as point of illustration allow me to touch on them briefly. I think you will see that their selfless actions did in fact create massive attraction. I will attempt to demonstrate that this type of character-based attraction, like integrity, vision and enthusiasm can be implemented in a powerful and genuine way by regular folks like you and I.

In his youth Gandhi was a regular guy. In fact the name Gandhi means “grocer.” Educated as a lawyer in England he ultimately managed to lead his people to freedom from British rule by practicing nothing BUT selflessness. He never wavered in his unshakable belief in nonviolent protest and religious tolerance. When Muslim and Hindu compatriots committed acts of violence, whether against the British, or against each other, he fasted until the fighting ceased. Independence, when it came in 1947, was not a military victory, but a triumph of human will. 

Mother Teresa taught at St. Mary’s High School in Calcutta from 1931 to 1948. However the suffering and poverty she saw outside the convent made a profound impression on her. She asked for permission from her superiors to leave the school and devote herself to working with the destitute and dying in the slums of Calcutta. Although she did not have a single penny, she relied on Divine Providence, and began the first school for slum children without even a building. Her selflessness attracted volunteers and eventually financial support. By the 1990s there were over one million Co-Workers in more than 40 countries.

While selflessness is indeed a rare commodity today, I think we can all give a bit of ourselves for someone else. We don’t have to be Gandhi or Mother Teresa to help another person. I think this is as relevant in business as it is in our personal lives. How often do we place our own interests before the clients? How often do we let our egos get in the way just because we can? If I had to answer that I’d have to say, TOO OFTEN!

What would happen if we took the long view, overlooking a confrontation in favor of a selfless approach? Do you think it would create attraction? I’d be willing to bet my bottom dollar on that. In a society that focuses on gratifying ourselves, imagine the impact we can create with our clients, shareholders and team members when we take our eyes off ourselves and look to a brighter future.

In 1961 John F. Kennedy put forth the idea of sending a man to the moon and bringing him back safely before the end of the decade. The American people were no doubt moved by this vision. But frankly he received much opposition from Congress due to the Cold War and the fear of technological failure.

A team of legislators were sent to Cape Canaveral to determine whether the funding should be allocated for the project. One day Florida Senator George Smathers, a member of this team, was touring the facility. He slipped away from the group of dignitaries for a moment to get a drink of water. Attempting to rejoin his group he became lost and found himself wandering the halls. The place was immaculate. It looked to be sanitized. Suddenly he came upon a woman sweeping-up and he explained his situation to her. She seemed to know her way around the complex and quickly told him how to rejoin his party. Smathers, impressed with the woman’s knowledge asked her, “What is it that you do here?” He was astounded by what she told him: “Why sir, I am part of a team helping to put a man on the moon and bring him back safely.”Smathers went back to Washington with a renewed fervor in his heart for the lunar project. He told his colleagues, “If the janitor at Cape Canaveral has this kind of sense of mission, what might the scientists and astronauts be like?”This simple cleaning women understood her humble job of sweeping-up to be far more than it appeared to an outsider. She was an important part of the Apollo project. Do you think that, as a result she was far more committed to her job? Do you think she went out of her way to do an extra great job of cleaning up? You bet she did. Her answer showed her deep understanding of her “personal internal vision.”Please understand I am not talking about a corporate vision or mission. Not that a corporate vision/mission is not necessary. On the contrary it is the first step in organizations developing their personal internal visions. But today many corporate visions or missions have become more like slogans than anything else. A PIV, or “Personal Internal Vision”, is a one-on-one relationship between you and your job. For that cleaning women that might have meant having the floors shine, the porcelain gleam and the corridors sparkle. What is it for you? Or if you’re a business owner or manager what does it mean for each one of your people?The purpose of a PIV is to give people the freedom they need to succeed. It allows them to take full responsibility for their choices. This is really the only way to create an environment of accountability. When a company asks their people to develop their own personal internal visions, they also give them the freedom to break the bonds of authority and excel beyond what might be expected from management.The fact is that accountability and responsibility lies with those closest to the task. Owning their job and future allows someone to let go of the idea that they need someone to look to for direction or control. It allows people to be responsible to the entire organization and the customers rather than their manager or supervisor. It takes the focus off of doing things right or by the book. It puts the focus on doing the RIGHT things. This improves decision making, performance and productivity.Improved performance and increased productivity aren’t the only benefits of a PIV program. Implementing PIV allows people to improve their skills by taking personal risks that will benefit the organization. They become more trustworthy and more trusting of others. They tend to hold themselves to higher standards and operate with greater integrity. They are often willing to put the interests of others above their own. This makes sense if you think about it. When their OWN success is at stake rather than some stranger’s company, do you think they will make better decisions and operate with greater commitment? Of course.In fact, in the coming economy, the only alternative to implementing a PIV program will be increased employee turnover, continuing resentment and ultimate stagnation. Don’t take my word for it. Ask the folks at Southwest Airlines, Harley Davidson, Nordstrom, Dell Computers and the list goes on. The bottom-line is that having a PIV program can be the difference between achieving your company’s goals in terms of financial growth, manpower development and customer satisfaction.If not for that cleaning women’s PIV, might there be a Russian flag on the moon today?I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.comMark Deo