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April 2020 Newsletter – Creating Family Alignment

Newsletters

Our topic for April 2020 has been creating family alignment. Many problems that family businesses confront may seem to business owners like isolated issues but really stem from a lack of alignment between family members. When they correct the alignment problems, the entire business runs more smoothly. If you’re wondering how it’s possible to create better family alignment, read on.

April 2020
 

What Is Family Alignment?

Alignment is a position of agreement or harmony. In a family business setting, family alignment means that all family members involved either directly or indirectly in the family business are in agreement with each other about all the major aspects of running the company. Every family member doesn’t have to think alike or agree about every decision, but the family businesses that succeed are the ones that are able to create unity of purpose and values and are able to maintain those even as the business grows and changes over time.

Family alignment is crucial to establish for transition planning. Unfortunately, if family members cannot agree on important issues, when a crisis or a leadership transition occurs in the company and the company cannot weather it, there will be consequences for the family relationships too. In many cases, when a family business goes bankrupt, family members have so much animosity towards each other that they stop speaking to each other at all. Some companies have gone bankrupt because they cannot resolve family conflicts due to underlying anger or bitterness. It’s a double loss – financial and personal. 

Read more.

Why Bring in an Outside Consultant to Correct Family Alignment?

Families often want to keep control of their family business within the family and believe that only family can solve family problems. Unfortunately, it’s much more common for family members to be stymied by firmly entrenched patterns or roles within the company. Bringing in a consultant like a family business architect to help solve problems allows an outsider access, yes. It also lets a new set of eyes see what’s happening. Because the outsider doesn’t have any investment in the business or the relationships within it, he can offer an objective view and advice. 

What will a family business architect do for your business? He will take the time to observe and study the business. He will listen to what different family members have to say about the company and its issues and ask questions to clarify any confusion. His mission is to understand the company’s strengths and weaknesses, unique qualities, values, and the family business culture. An adept outside consultant will work to build trust with and between individual family members so that he can facilitate communication and then create alignment. 

At Prometis Partners we understand that a family business will have at least four dynamic systems at play within it: family, management, ownership, and governance. There may be different decision makers in each of those systems, or they might have overlapping roles and responsibilities. Not everyone involved in those systems may have a voice, and some of them may need to if the company is going to thrive and continue through a crisis or change of leadership. We work with our clients so that they can communicate about the issues facing their company and make decisions that will not alienate anyone and move the company forward. 

Some of our clients understand the dynamics at play within their companies and some of them are so busy putting out fires that there is little time for examination of underlying factors. It’s our job to help them. Because we are not intimately involved in the company and do not have a stake in any changes made, we can be honest about problems that exist. 

Sometimes the only way to create family alignment is to bring in an advisor who can be utterly truthful, will not be hurt when hard feelings are expressed, and has no financial stake in any outcome. An additional benefit of an outside consultant is that often family members will be better behaved when that consultant is present than they would be among themselves. It’s easier for many family members to express frustration when someone uninvolved is leading the discussion. 

If you think your business could benefit from an outside eye and ear to bring about family alignment and facilitate success, please call us at Prometis Partners. We are here to help your business make the changes necessary to succeed now and in the future. 

VINCENT MASTROVITO

vincent@prometispartners.com
(616) 622-3070
250 Monroe Ave. NW, Suite 400 
Grand Rapids, MI, 49503