3 Strategies for a Successful Family Business—and Vacation
It’s the dog days of summer. The sun beats down as you sip ice-cold lemonade. You are early for your family’s meeting. The agenda? Planning the annual family vacation. It is the first trip since your parents (G1) expressed their desire to transition from founding owner-operators to owner-investors, you were onboarded as a Board Observer, and both siblings secured jobs outside of the business.
Vacation should conjure relaxing thoughts, but memories from the last one are fresh in your mind. Continuous questions, discussion, and debate about financials, five-year strategies, and growth plans; on the plane, on the golf course, and during dinner. The always-on commitment to excellence is admirable. It is a key lever that enables family businesses to effect lasting change in both business and society. However, it also puts the family and its capital at risk. But it does not need to.
There is one word that can set up family businesses and family trips for success: governance. Proper scaffolding around roles and responsibilities, information sharing, and feedback is essential to preserving family unity while strengthening the family enterprise as a whole. Here are three ways governance can help ease the stress of your next family vacation—and strengthen the foundation of your family business.
Develop a Shared Vision: Roles and Responsibilities
When planning a family vacation, it can be easy to assume the roles that mirror our current roles within the business. Take the time to carefully think about, define, and assign responsibilities. For example, a G1 co-founder has brought structure to the business as it has evolved. He naturally falls into the role of leading the trip planning and execution. But he has also expressed a desire to transition into a less active role in the business through evolving into an owner-investor role. This is an opportune time to extrapolate this transition in the business to his role in vacation planning by training a successor, ideally one of his children who works outside of the business. Doing so also provides a platform for interested and qualified Next Gen to serve in a leadership capacity within the family and allows for individuals’ evolving goals to be met.
Honor the Rules of the Game: Information Sharing
In addition to falling into pre-set roles and responsibilities, families tend to use vacations as a makeshift company offsite, especially family members who are also employees. After all, serving in an Observer role within a family’s Board is an incredible onramp for interested and qualified Next Gen to learn about the business and reach clarity on whether to join the business and when. It also can bring our G1 Board Chair great joy in seeing their Next Gen learn about and be engaged in meaningful business matters. In turn, both will be eager to discuss open topics in what seems like a safe space, around family. However, it is imperative to honor information sharing guidelines, specifically the Non-Disclosure Agreement (NDA) signed by both the Board Observer and Board Chair, requiring confidentiality. It is also critical to honor their shareholder communications plan where the family elected to restrict sharing Board information with in-laws. Ignoring the ‘rules of the game’ can unnecessarily lead to resentment, feelings of exclusion, and conflict. This can be avoided by having a pre-trip conversation about the importance of honoring existing protocols. Doing so will help protect the family and their capital, for the long term – and the family trip will be important in reinforcing this vital separation between business and private family life.
Take a Continuous Improvement Mindset: Build a Feedback Mechanism
It is critical to think through key scaffolding to instill across the end-to-end process of taking a family vacation. As in business, family members may withhold sharing feedback at any point due to a fear of repercussions or lack of infrastructure. This tension only becomes more common, especially in a family that is growing through marriage and eventually, children. Building a culture of feedback with a supporting mechanism to receive and act on ideas will make a meaningful difference. We recommend creating a norm where each attendee submits ideas around anything to start, stop, and continue for the next trip upon their return (~6 total ideas). We also recommend G1 nominates a member from the Next Gen – ideally the second Next Gen who is not working in the business – to be accountable for spearheading this process. A lightweight retrospective across all attendees allows the most meaningful aspects of a family trip to evolve in alignment to the family’s growth and changing wishes.
A family vacation mirrors a family business in numerous ways while sharing the same anchor for enabling a united, strengthened, and protected family enterprise: governance. Excitingly, August is a busy month for family vacations and thus, a perfect time to build effective governance around developing a shared vision, honoring the rules of the game, and taking a continuous improvement mindset. Are you ready to set your family and your vacation up for success?