Receiving Feedback Well Builds Better Business Relationships

by Mike McGrann, Executive Director of the S. Dale High Center for Family Business

Perhaps the most important component of hearing feedback is to accept that we, as humans, are just like your company’s balance sheet: on the one side we have assets, and on the other side we have liabilities.

Most people will admit that they have both assets and liabilities, strengths and weaknesses, but when the discussion moves from the theoretical ( “Yes, I know that I have strengths and weakness”) to an actual conversation about a specific mistake or weakness, things become much more difficult.

In fact, most of us, when confronted by a co-worker or loved one with feedback about how we have hurt them, we become defensive… sometimes even aggressive. We do not like to be confronted with the liability side of our personal balance sheet, so we deny that it exists (defensiveness) or we cover it up with aggression. I am sure we have all met folks who get angry when confronted with feedback they do not like. The problem for a leader who gets angry in the face of difficult feedback is that his / her employees quickly learn to tell the boss what he / she wants to hear. Since some news is good and some is bad, a leader who only hears the good stuff is only getting half the story. This compromises his / her ability to effectively lead the organization.

The challenge for great leaders is to truly accept responsibility for both sides of their personal balance sheet. Once we accept this as part of being human, we no longer have to become angry or defensive when someone points out a weakness.

For instance, why should I upset about something  I know is true? If someone points out to me that I have brown hair, I do not need to get upset because I know it to be true. Similarly, if a co-worker tells me I could have improved the marketing presentation, since I know that I am flawed, I can accept the possibility that my presentation was less than perfect. In fact, I can learn to ask questions to better understand how I might improve.

Receiving feedback is certainly not easy. However, start with a small step: the next time someone gives you feedback that is upsetting, cut yourself a break and admit that you are not perfect. You might have blown it. Explore the issue with questions and try hard not to react with defensiveness or anger.

Mike's Bottom Line: In receiving feedback from others, you not only gain information that can help you do better next time, but you also build a stronger relationship with a valued employee or co-worker.

Leading Up--The Relationship of Managing Your Boss

by Mary Beth Matteo, Founding Director of the S. Dale High Center

No matter what our position in the hierarchy, we all have the capacity and the responsibility to lead.


When it comes to the family business—especially when Dad might be the boss—this sometimes looks more difficult than it is.

One of the best books around on "Leading Up," is Michael Useem’s Leading Up: How To Lead Your Boss So You Both Win, published by Random House in 2001. Useem, who is a faculty member at The Wharton School, draws examples from major corporations such as CBS, British Airways and Charles Schwabb & Company, as well as case studies from the Marine Corps, political figures and even a chapter “Persuading the Ultimate Authority”—Abraham and Moses intercede with God himself!

A few topics from Useem: “Informing Your Commander”, “Designing a Future Your Boss Can’t Quite Envision,” “Keeping Your head When You Have Several Superiors,” and “Guiding Your Guide.”

For more information and more resources on Leading Up, check out Useem’s website. For sample chapters from Leading Up, click here.

Sum & Substance: If you aren't helping your leaders lead, many good ideas with potential benefit to your family business can die on the vine. It's not always easy to lead up, but the results can be worth the effort.

Keeping Your Customers Close: Relationship Mining as Marketing

by Mary Beth Matteo, Founding Director, S. Dale High Center for Family Business

We all know that during tough economic times we’re advised to stay close to our customers but what does that mean, exactly? What’s the difference between customer satisfaction and customer loyalty?

Sam Geist, business expert, cites ten facts of life to improve customer loyalty:

Mass marketing is OUT
Marketing to a Customer of One is IN

Price, Quality and Service are OUT
Value-Added is IN

Monologuing is OUT
Dialoguing is IN

“If it doesn’t seem broke-leave it alone,” is OUT
“If it doesn’t seem broke-check it out anyway”, is IN

Knowing all the answers is OUT
Asking the right questions is IN

Sum & Substance: Business relationships depend on many of the same success factors as personal relationships. In this business climate, it makes sense to invest in your business relationships.

The Enneagram: An Excellent Tool for Examining Relationships

by Gale Martin, Director of Marketing and Membership, S. Dale High Center for Family Business

Do you continue to be challenged by people do inexplicable things and act in ways you find inherently uncomfortable?

Besides, the DiSC, the Myers Briggs, and the Kiersey Temperament Sorter, another tool to help you address your inexplicable discomfort with those who don't behave like you is the Enneagram.

The Enneagram is a study of nine basic people types that helps explain why human beings react and behave in certain ways. Besides pointing to specific directions for personal growth, the Enneagram can also improve relationships with family, friends, and coworkers, and can have double the impact when your family members are your co-workers.

The roots of the enneagram hearken back to many centuries earler. Though its exact origin isn't known, it is thought to have been taught orally in secret brotherhoods in the Middle East.

Dale High, Executive in Residence at the S. Dale High Center and Chairman of the High Companies, has studied the Enneagram in depth and had this to say about it:

“I have found the Enneagram to be another of those tools that is helpful for self knowledge and personal growth. One is able to not only discern one’s own strengths and weakness through the applicable number but also to use it as a means of personal transformation. It is useful also in understanding the personality profile of others and improving our interactions with them as a result.”

Though the Enneagram can merit intense study, for those who want to tap into a little of its wisdom without devoting months of study, it has been made accessible in a book by Renee Baron and Elizabeth Wagele called, The Enneagram Made Easy.

According to Baron and Wagele, the nine types are as follows:

#1 The Reformer-- motivated by the need to live their lives the right way, which feeds their intrinsic need to improve themselves and the world around them.

#2 The Giver--motivated by the need to be loved and valued and to express their positive feelings toward others.

#3 The Achiever--motivated by the need to be productive and achieve success while avoiding failure.

#4 The Artist--motivated by the need to experience their feelings and to be understood, to search for the meaning of life and to avoid being ordinary.

#5 The Observer--motivated by the need to know and understand everything, to be self-sufficient, and to avoid looking foolish.

#6 The Questioner--motivated by the need for security which can manifest as a phobic questioning and counterphobic questioning.

#7 The Adventure--motivated by the need to be happy and plan enjoyable actitivities, contribute to the world, and avoid suffering and pain.

#8 The Leader--motivated by the need to be self-reliant and strong and to avoid feeling weak or dependent.

#9 The Peacemaker--motivated by the need to keep the peace and avoid conflict.

In any typical working environment and in any family environment, you're likely to see encounter an array of types. Helping understand what makes people tick can help you understand and respond to their behavior more constructively and to be more accepting of who they are and how they differ from you.

Though I can lapse into other modes depending on the circumstances, predominantly, I'm a #4--The Artist. And how about you? Which types do you clash with the most? Get along with the most?

In-laws as Outlaws?

by Mary Beth Matteo, Founding Director of the S. Dale High Center

Many in-laws feel so separated from the family business family, they become “outlaws,” people who feel outside the law. Handling in-laws is fraught with difficulties but here are a few tips about how to keep a spouse’s relationship with the family from becoming volcanic:

• Learn to articulate unwritten family laws, so your spouse doesn’t inadvertently violate them (an example might be, “we don’t criticize Dad in public.”)

• Discuss traditions of both families so that both can be accommodated (How do we spend Christmas, Easter, birthdays? How do we divide the time?)

• Educate your spouse and in-laws about the family business, through family meetings and other vehicles; the more transparent you can be about the status of the business and how it runs, the better for everyone.

• If you don’t have one, think about developing a family charter; in the case of in-laws, two areas are key: stock ownership policies and pre-nuptial agreements.

• Don’t complain about a family member to your spouse or in-laws! It only causes problems later.

Sum & Substance: Inlaws may not be part of the family business, but it's in the business's best interest to remember they are part of the family.

Dream Teams

by Mary Beth Matteo, Founding Director of the S. Dale High Center for Family Business

Sibling teams have been much studied but little understood. Unfortunately, as ownership and management structures, sibling teams fail as often as they succeed. An article by researchers Farrington and Venter suggests that certain conditions increase the likelihood of success. Some of these are obvious, others not so much.

• Complimentary skills among siblings and a clear division of labor

• Existing financial success of the business

• Compensation issues resolved

• Common vision for the company

• Support of non-family managers

• Existence of an agreed-upon method for managing conflict

• Mutual respect

• Personal satisfaction with work and family relationships

• Voluntary participation in the sibling team

• Minimal involvement of other family members, including parents

Sum & Substance: Siblings can make dream teams, but they can't trust that a family bond alone will automatically yield a productive working relationship. Better to treat the partnership with as much care and attention as you would any professional team outside of the family unit.

Quote of the week

“Recent history is filled with instances of family companies that failed to make it to the next generation because family members couldn’t resolve their differences and communicate successfully with one another. In a 1995 survey of 800 heirs of failed family businesses, conflict with family members in and out of the business and with non-family employees was viewed as a major cause of business failure."

--Joseph H. Astrachan, Ph.D. and Kristi S. McMillan, Conflict and Communication in the Family Business, 2003

Limiting groupthink

By Mary Beth Matteo, Founding Director of the S. Dale High Center for Family Business

Whether you’re running a business meeting or a family meeting, if you want genuine by-in, it’s important to understand the concept of “false consensus.”

False consensus happens in one of two ways. Top down: a leader may presume that silence means consensus, for example, the way political leaders sometimes assume they have the support of the masses. Bottom up: members of a group may feel such intense pressure to agree that they simply cave on an important issue (and usually exhibit negative behavior later.) An example would be the study of “groupthink” in sequestered jurors.

How to avoid it? Awareness is the first step. In conducting family meetings on important issues several steps are key:

• Appoint a leader for the meeting (a person who has the respect of the group).

• Appoint a note-taker to write minutes.

• Set a clear time limit.

• Set an agenda in advance and ask participants to contribute to it.

• Provide a place for all members to participate in the discussion (if needs be, call on them).

• When discussing a “loaded” issue, ask members to use “I” to express opinions and understanding; avoid the use of “you”, as in “you always do this.”

• Summarize the results of the meeting and set an agenda for the next, with input from the group.

Sum & substance: While you want healthy working relationships and productivity in a team environment, you don't want to facilitate groupthink, which can lead to shallow decision-making, excessive optimism, and stereotyping. Rather, invest in a strong group relationship that accommodates diverse viewpoints.

One, two, three . . .

by Mary Beth Matteo, Founding Director of the S. Dale High Center

Birth order has been a topic of debate for many years. As the Center discusses relationships, it’s worth a second look. Does your birth position in the family affect your leadership style? Does birth order affect your family’s perception of you as a leader? Does it color their business decisions?

With customers and clients, should your communication vary depending on whether you’re dealing with a first born, middle child or last born? There are many exceptions to the birth order categories (for instance, single children should also be included) but the three main types can be summarized as follows:

Birth order helps to create distinctive “habits of mind,” or ways of interpreting the world. Depending on the position in the family, a person may feel “on the top of the pile” (first born), squeezed in the middle and negotiating a position (middle), or ignored and having to carve out a place in the limelight (last born.) Below we have listed some of the characteristics of first, middle and last born, as well as famous examples:

First born -- leader; take charge kind of person
Winston Churchill
Hilary Clinton
Rush Limbaugh

Middle -- mediator; secretive
Donald Trump
JFK
Bill Gates

Last born -- the Charmer; likes limelight
Ronald Reagan
Ross Perot
Whoopie Goldberg

So, which is it? Hype or fact? Birth order theories are a bit of both, perhaps.

Sum and Substance: This is definitely information you should have in your arsenal! For an interesting read on the subject, try The New Birth Order Book, by Dr. Kevin Leman. It includes an interesting chapter on “How to Let Your Birth Order Work for You in Business.” For those who want a skeptical assessment, check out this NY Times article on birth order.

Steve Treat Seminar Really a Treat

Senior therapist, CEO, and ordained minister Steve Treat was the featured presenter on Thursday, November 12. According to the evaluations of those attending, Treat's presentation on participatory leadership was our highest rated seminar to date.

Scott Heintzelman, a Partner with McKonly & Asbury, one of the S. Dale High Center's Corporate Partners, reviewed the session on his blog "The Exuberant Accountant." Click here for Scott's post on the Treat Seminar.

Quote of the week

“More than ever before, people expect to find their worth affirmed at work. Twenty years ago, not even 5 percent of our population expected to develop their potential and find satisfaction through work. Today, 40 percent of employees believe they have a fundamental right to self-fulfillment, to develop and use their intellectual and creative abilities to the fullest. They believe they are worth as much to the company as their managers. They want to perform meaningful work that brings value to the world, and they have the latent power to insist on being treated as worthy.”

--Kate Ludeman, The Worth Ethic

Relationship building: Giving feedback

by Mike McGrann, Executive Director of the S. Dale High Center for Family Business

One of the keys to any effective working relationship is the ability to give feedback in ways that individuals can "hear" it--and the ability to receive feedback without becoming defensive. Some rules of the road when giving feedback include:

1. Be succinct. Provide specific feedback about a behavior or actions that you would like to see changed or improved. Focus on "actionable items" that an individual can actually change vs. personality traits. For example, if you tell someone he or she lacks charisma, there is not much they can do to become more charismatic. However, if you tell someone that you would like to see more energy and a greater sense of urgency, they can deliberately work to portray more energy and urgency in the workplace.
2. Be brief. Hearing honest feedback is tough enough without feeling like you are getting a lecture. If you really want someone to hear your feedback, you need to keep it short and specific. The longer you talk, the less likely the other is to hear.
3. Be congruent. Speak from the heart with your feelings and beliefs about what you need or wish to see happen. Begin with "I" statements such as "I feel," "I believe," "I would like" that indicate your sentiments. Avoid statements that begin with the words "you always" or "you never" as they force the receiver to defend themselves. If you want the other person to hear your opinion, share it in an honest way . . . your true feelings. Leave the attack, aggression, and other distractions at the door.
4. Be empathetic: Remember that the recipient's ability to hear your message depends in large part how you deliver it. Do so with empathy and care--remembering that it is always hard to hear tough feedback.

Mike's bottom line:  The mark of a good leader is a willingess to give feedback that is succinct, brief, and congruent, and delivered with empathy for the subordinate.

Counter-intuitive skills required for building relationship power

by Mike McGrann, Executive Director of the S. Dale High Center for Family Business

If you want:

• To be heard, you must first be willing to listen.

• To be trusted, you must first be willing to show that you trust.

• Others take responsibility for their part, you must first take responsibility for your part.

• A team that is willing to change, you must demonstrate that it is okay to fail.

• To improve communication in your team, you must surface conflict.

• To influence, you must first be willing to be influenced.

• To be viewed as a strong leader, you must demonstrate humility.

Mike's Bottom Line: Power has to be earned, and the route to earning it may neither be easy nor obvious. As far as relationships go, the effort, however counterintuitive, is worth your investment.

When Words are the Problem: Communication and Relationship

by Mary Beth Matteo, Founding Director of the S. Dale High Center

Many of us judge someone’s competence by the way he or she handles a public setting: chairing a meeting, making a presentation, supervising employees, or diffusing a tense situation. Members of the successor generation are judged by these criteria—and many more. Poor communication skills can strain professional relationships.

The upcoming generation is under intense scrutiny which makes effective communication difficult, if not paralyzing in some cases. In business settings, colleagues often defer to the senior person, making it even more difficult for a successor to speak up and be heard. In many family businesses, comparisons between founder and successor are unrelenting, also not a recipe for open and free communication. There are a few things that can be done to help successors find the “right words.”

1.  Encourage the successor generation to work outside the family business, if possible: there’s nothing like being able to learn in privacy and observe different communication styles.

2.  Find a non-family coach: someone who can role play situations with the successor and help develop the appropriate “words” for specific situations.

3.  Successors should seek leadership experiences in voluntary capacities: serving on boards, heading up special projects. This is great experience for learning the right words, and communicating with authority and effectiveness. It’s also a great way to give something back.

Sum and substance: Contrary to prevailing wisdom, a failure to excel as a communicator is not always a question of intelligence or leadership: it often has to do with “having” the right words.

Entertainment Pic: Big Night

Looking for an entertaining video or DVD rental that turns a gimlet eye on family business? Dale High of The High Companies and Executive-in-Residence at the High Center recommends Big Night, a 1996 release directed by Campbell Scott and Stanley Tucci. Big Night is about a failing Italian restaurant run by two brothers, Primo and Secondo, who gamble on one special night to try to save the business.

Primo, played by Tony Shalhoub (TV's "Adrian Monk"), is a temperamental Italian chef who refuses to make routine dishes because they are a waste of his supreme talent. Secondo, played by Stanley Tucci, is the smooth-talking business man, who's trying to keep the restaurant afloat, despite the fact that few people actually eat there.

The critics called it, "Impeccably crafted, wonderfully acted" and "delectable, warm, funny, and poignant."

Big Night: "In love and life, one big night can change everything."

On Relationship: The Forgotten Advisor

by Mary Beth Matteo, Founding Director of the S. Dale High Center for Family Business

Successful leadership must look at relationships from a strategic perspective. Part of this requires the Senior generation to intentionally transition strategic relationships. One of these, frequently forgotten, is the professional advisor. Here are a few tips:

• Long before you plan on “passing the baton,” design a plan for your successor to develop relationships with your advisors: your attorney, accountant, insurance broker, banker and others. Encourage successors to chair critical meetings or shadow you.

• Create projects for your successor to build a relationship with one of your advisors.

• Inform your advisors of your succession plan.

• Challenge your advisors to transfer their loyalty to your successor: make it part of their job. (In the case of a lawyer, for instance, this may involve a formal, legal agreement.)

• If your advisors plan to retire around the same time as the senior generation, and have a long-standing relationship with the family business, work with your successor on developing a plan for how use current advisors and how to select new ones if necessary. Help your successors get in the “driver’s seat.”

Sum and substance: Advisor relationships are strategic. Manage them well to insure a successful transition.

Quote of the week

“In a family firm, the strands of the family system are so tightly interwoven with those of the business system that they cannot be distinguished without seriously disrupting one or both systems.”

--Elaine Kepner, “The Family and the Firm: A Coevolutionary Perspective.” Organizational Dynamics, Summer 1983

When do you need a mediator?

By Mary Beth Matteo, Founding Director
S. Dale High Center for Family Business

Most of us are “do it yourselfers” and like to solve our own problems. In fact, a “roll up your sleeves” attitude has been key to many family's success. So, when it comes to family issues, when do we decide we need an objective outsider to help us? Here’s a short checklist:

• When old conflicts and “baggage” begin to affect the family’s ability to plan for the future
• When poor communication is affecting the bottom line
• When the lines between people’s family role and business role seem to be blurring
• When it becomes difficult to obtain opinions and information from family members, e.g. people are withholding information
• When the natural leader is perceived by others to have an agenda, e.g. not objective

When will a mediator NOT be able to help you?

To be effective, members of the family group must want to resolve their issues: although members of family businesses can disagree about the end goal and the means, all members of the group must want to resolve the major issues. Otherwise the process will be sabotaged.

Would you consider using outside mediation? Why or why not? Has mediation worked for your family enterprise?

Quote of the week

“Although it takes two to have a relationship, it takes only one to change its quality. Just as we react to others, they react to us. By changing our behavior, we will change the way they react.”

--Roger Fisher and Scott Brown, Getting Together, quoted from Working with the Ones You Love

Should we hire in-laws… or not?

by Mike McGrann, Executive Director
S. Dale High Center for Family Business

This is an important question – one that most family business owners struggle with at some point in the life cycle of their firm. Some families say yes. Some say no.

However, a simple yes or no doesn’t apply to the broader question for family ownership teams: “How will we manage the influence of our in-laws?” The answer should be considered from three perspectives:

1. As a potential employee of the business
2. As a potential shareholder
3. As a stakeholder in the family firm
   

As a Potential Employee
Most of us would agree that highly qualified in-laws can be productive and loyal employees and that it would be a loss to not hire them simply because they are married to family members. However, the decision to hire in-laws can dramatically impact the organization and the family and should be made within the context of a discussion at the ownership level to define the “rules of the game” for in-laws. A Family Member Involvement Policy clarifies how the family and the business will interact. Among other things, such a policy should define the process by which family members and in-laws are:

• Hired
• Evaluated
• Promoted
• Fired

The boundaries for in-law employees should be very clear: “You will be treated like any other employee.” In addition, they must be willing to accept their place within the organizational hierarchy – and to respect this hierarchy at all times, which means a deliberate conversation prior to hiring.

The reality is that treating an in-law (or working family member) like “any other” employee is extremely difficult. A Family Employment Committee can ensure that the hiring, evaluation, promotion, and (if necessary) firing of in-laws (and family members) occurs according to norms established by the company.

As a shareholder
A second consideration is whether a family will allow in-laws to own stock in the company. Most families we know prefer to limit ownership via stock restriction agreement to direct descendents (or adopted children) of the founding family member.

As a stakeholder
In-laws have an important and influential roll as stakeholders in the family business system. Their influence (positive or negative) comes via their relationship with the family member. They should be managed by the family business system leader. In addition, the policies that family members establish – such as the Family Member Involvement Policy - impact their children. Thus, they should be informed of what is happening in the system.

If your family has created a Family Member Involvement Policy, share it with the in-laws and ask for their input. They do not have the right to approve or change the policy, but their voice / opinion should be considered. Why? 1) Because asking their opinion makes them feel a part of the process and builds a relationship with them, and 2) because the policy will impact their children.

Families should include spouses in part of a family meeting at least once a year. Possible agenda items for a meeting with in-laws could include:

• A brief and general overview of what has happened in the business over the last year.
• A brief description of the plans for the coming year.
• An update on the creation of any family policies or structures. (Family member involvement, perks, vacation, etc.)
• Other topics related to the family.

A presentation from a local expert on an issue of interest to the group (Parenting skills, communication skills, building healthy marriages, estate planning, etc.)

Mike’s Bottom Line
Give in-laws what they deserve: information and a voice (not a vote). In doing so you will build trust, and hopefully, ensure that their influence on the system is positive.
Do you have a Family Member Involvement Policy in your family business? How has it worked for you? Feel free to leave a comment or take our poll in the sidebar.