Business is Business: Reality Checks for Family-Owned Companies

Business is Business: Reality Checks for Family-Owned Companies

by Kathy Kolbe, Amy Bruske

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Overview

Business is Business: Reality Checks for Family-Owned Companies by Kathy Kolbe, Amy Bruske

Balancing the benefits and burdens of a family-owned business
Working with family complicates the already daunting task of owning a business, and it’s tough not to take work problems home with you. The best approach is to realize that family is family . . . and business is business. 

Business is Business: Reality Checks for Family-Owned Companies is a common-sense manual for survival that dispels myths such as the power of teamwork and gender or birth-order differences in ability. Engagingly written, with no-nonsense tips and real-life examples, this defiant treatise will guide you to 

• Harness your employees’—and your own—inherent strengths
• Trust your instincts and the people you work with
• Balance lifelong relationships with fair treatment of nonfamily employees

Authors Kathy Kolbe and Amy Bruske hone decades of experience helping family businesses thrive—and running their own for more than 30 years—into practical, actionable advice for how to hire family members, how to work with them, and how—when necessary—to fire them. 

The solutions are not always easy, but understanding the frequent pitfalls of working with family is an investment that could pay back over generations. Business is Business will show you how to find joy while developing a sustainable family-owned company.

Product Details

ISBN-13: 9781626343733
Publisher: Greenleaf Book Group Press
Publication date: 02/07/2017
Pages: 264
Sales rank: 1,002,832
Product dimensions: 6.00(w) x 9.10(h) x 1.10(d)

About the Author

Kathy Kolbe and Amy Bruske have succeeded by trusting their instincts. 

Kathy Kolbe is the global leader in discovering and accessing the power of human instincts. She’s done the brain research to prove the relevance of her Kolbe Theory of Conation to individual and organizational success. Kathy was the first person to connect conative behavior to instinctive drives, which she postulated as the source of the patterns of mental energy commonly known as a person’s MO. 

Amy Bruske is the president of Kolbe Corp and leads seminars for business leaders throughout the world. She was recently named Business Owner of the Year by the Phoenix chapter of the National Association of Women Business Owners (NAWBO).

Kathy and Amy are both award-winning consultants and advisors to over 3,000 family-owned businesses, as well as to Fortune 50 companies, and both are also sought-after speakers. As mother and daughter, working together for more than two decades, Kathy and Amy have personally experienced every situation discussed in Business Is Business. Neither recalls a time when she wished she were working anywhere else.

Read an Excerpt

Business is Business

Reality Checks for Family-Owned Companies


By Kathy Kolbe, Amy Bruske

Greenleaf Book Group Press

Copyright © 2017 Kathy Kolbe and Amy Bruske
All rights reserved.
ISBN: 978-1-62634-373-3



CHAPTER 1

Creating Sustainable Success


Most family-owned businesses (FOBs) start as an individual effort (aka solopreneur), or a partnership between a couple of people who are related to one another. Rarely does someone actually intend to manage the people they love. Rational people realize that the theme song for FOBs (much like Taylor Swift's breakup message in many of her songs) could be I love you very much, but I don't like what you are doing.

Kathy, who grew up in a family business, vowed never to work in it as an adult. Why, then, did she found a family business?

She didn't. She started a business on her own in order to fulfill a mission. Her company, now known as Kolbe Corp, didn't become an FOB for over a decade. For the many years while she was single-parenting two kids, she was struggling on her own to build a business.

When her new, trusted spouse decided to share her mission and contribute his complementary instincts to that effort, it made all future disasters easier to digest.

By the time other family members (FMs) got involved, Kathy had discovered how to use (or not) each FM's best method for contributing to their shared purposes. Kathy and her husband, Will Rapp, also knew it wasn't just about abilities; it was about levels of commitment. With more family involved, the revolving door of training people who move on was likely to close. It was time to build an internal brain trust.

After more than 40 years, it's evident that the business Amy is now president of has proven to have sustainable success.


There'd better be a good reason to get involved

Business is Business. When FMs come into a business, they need to be able to add value to it — and the business needs to add value to their lives. If that's not the case, don't risk jeopardizing your family's economic security as well as ruining family relationships to get into an FOB. Imagine taking this risk, and then failing to grow it into a profitable, mature, and sustainable organization. When you fail in an FOB, you take the family's security with you.

Public companies are even more likely to fail than FOBs are, yet it's sad that after all the commitment and angst founders put into FOBs, fewer than 15 percent of them (according to multiple sources) make it to a third generation. A primary reason for this is often the poor selection and placement of FMs within the businesses. Leaders usually pick and choose FMs based on emotional need or wants rather than wise business selection practices. Placement is even worse. It is often sexist and ageist. Eldest sons get top jobs. Daughters rarely run departments that are driven by profit and loss statements.

We suggest that our FOB clients ask themselves the following questions when they are considering hiring an FM. Both the family members who are employees and those considering joining the business should answer these questions and discuss them. Be clear about your answers before moving forward:

• Do you have shared values?

• How would the business benefit from the personal strengths of the FM candidate, including both natural conative abilities and skills/experience?

• Would the owner/founder and other decision makers give the candidate the freedom to act on his or her strengths?

• How would the business benefit from these contributions?

• How would the FM benefit from joining the team?


Building on strengths

The basic ingredients of sustainable success we've discovered and thoroughly tested in other FOBs are these:

Identifying and using the three ways everyone needs to contribute: thinking, feeling, and doing.

Providing roles that give each FM the freedom to contribute their natural conative, instinct-based strengths to the business.

Forming collaborative teams that work effectively to provide solutions to the business's problems and opportunities.

If an FOB doesn't have a process in place that sticks to these guidelines, this is what can happen.

Bringing his son, Billy, into his financial services firm seemed so wise to Drew. Billy was smart and had an MBA. Now that he was married, Billy was ready to settle down into a stable career that would give him financial security. It would be great for Drew to be able to eventually hand the business to his son. It would ensure that his clients had continuity when he retires. It would be especially wonderful, they both thought, because they had always gotten along so well together, sharing hobbies and family travel.


It had seemed like a no-brainer, but it turned into a nightmare. Bringing Billy into the business ended up harming it and their relationship.

A simple Reality Check that covers all the mental factors (see the appendix) discussed in the pages that follow could have prevented this from happening. It was predictable that Billy would not be a good fit for the role Drew wanted him to fill. Here's what we've found that makes it so predictable.


The three mental factors/parts of the mind behind job success

Billy needed to know more about the financial advice he was giving before he gave it. This is a cognitive factor (aka thinking).

THINKING — WHAT YOU KNOW

Cognitive— skills, knowledge, reason, experience, education, or capabilities

How smart Billy was turned out — as it usually does — to be only a small part of what he needed to do to succeed in the business. In fact, getting A's in school does not forecast success in the field of financial services.

"Brainiacs lack common sense," some people say. While that is not true, it is true that a high IQ does not ensure adequate knowledge and the professional skills to be able to help people make financial decisions that satisfy their needs and desires.

Understanding what makes people tick helps, and that's exactly what Drew did not understand about Billy. He did not realize that Billy had not learned common sense business judgment prior to coming into the family firm. Billy's years of sports-related camps and internships were of little value in the business. His lack of experience showed up when dealing with clients and staff. People liked him, but they did not respect him.

Here's another example of a cognitive, or thinking-based, issue.

Clare has an MBA, but the sister with an undergraduate degree in journalism turned out to be the better businesswoman. Her uncle had seen that in her sister from the time she had convinced him to put ads in her fledgling neighborhood magazine.

"I'd say both of them are smart," the uncle said, "but Clare is not the natural deal maker; her sister was more entrepreneurial. Clare, by doing what the books taught her to do, would be better suited to working in larger corporations."


A particular type of FOB, the professional firm, requires FMs to have specific types of knowledge. These firms involve relatives who are lawyers, doctors, accountants, appraisers, realtors, and such. In many of these situations, the skills of a parent offer a shelter under which the next generation can learn the business — once they have the credentials to be in it.

"She's riding on her father's coattails," is often true in these FOBs. But one day, the daughter will be billing more hours or selling more homes, and the parent can bow out. It's a nice setup when it works. But first, it requires the learned ability to do what needs to be done.


FEELING — WHAT YOU WANT

Affective — Values, desires, motivation, attitudes, preferences, or emotions

Drew is highly motivated to make every single business deal a home run. Billy was fine just getting a walk to first base. Drew thought he could coach Billy to a higher level of ambition. The affect between them changed when Drew realized his son was not as concerned about helping the team win as Drew wished he were.

Any fan watching Billy play could have predicted he would get traded. But it's usually tough for a parent to come to grips with that.

If FOB leaders dissuade their youngsters from chasing their dream careers, is it any different from Drew trying to turn Billy into the person he dreams Billy could be?

FOB owners often tell us, "They had to get it out of their system." And, "I didn't want them moping around here as if it were a slave camp." They also say, "The worst thing I ever did was try to make my kid do things my way."


DOING — HOW YOU WILL AND WON'T TAKE ACTION


Conative — Actions, ReActions, and CounterActions: Instinct-based natural drives, necessity, innate force, mental energy, or talents

Conation is an internal, unchanging, unconscious attribute that is not altered by education, coaching, counseling, self-help manuals, parenting, or pleading. It is derived from subconscious, unalterable instincts, which come in a set of attributes or traits that are the modes of a person's natural method of striving, or modus operandi (MO). They determine how we act, react, and interact.

As every parent knows, kids come into the world being their unique selves. Their conative actions become acts of will when someone interferes with their control over their innate, instinct-driven patterns of behavior. (Watch two-year-olds to see the stubbornness of human instincts.)

Individuals have no control over the modalities of their conative behaviors, yet they do have the power to determine when they will use this resource. Learning to exercise this power appropriately is a big part of gaining maturity.

"Taking charge of your own destiny" assumes that the individual has the self-determination or free will to direct the uses of his or her conative strengths. You can offer your FMs opportunities to work in an FOB, but how they will perform there is entirely under their own control.

People are predictable in the way they will act because of the instinctive and distinctive patterns within an individual's conative makeup.

The existence of conation was identified by the ancient philosophers, but it has been ignored by academics. The Kolbe Theory has brought it to light by discovering the four universal instincts that drive our unique methods of problem solving when we are striving.

Instincts are the bedrock, hardwiring, and DNA-equivalent of the mind. Like a fingerprint or blood type, a person is born with this conative MO and can count on it to be there for a lifetime. And there is nothing you can do to change that — no matter how much your FOB could use a little more or less of your MO.

These are the four Action Modes and universal instincts Kathy identified in the 1980s. All human beings naturally take action on a continuum of behavior for each of these modes.


Fact Finder: The instinctive way we gather and share information.

Behavior ranges from gathering detailed information and documenting strategies to simplifying and clarifying options.

Follow Thru: The instinctive way we organize.

Behavior ranges from being systematic and structured to being adaptable and flexible.

Quick Start: The instinctive way we deal with risk and uncertainty.

Behavior ranges from driving change and innovation to stabilizing and preventing chaos.

Implementor: The instinctive way we handle space and tangibles.

Behavior ranges from making things more concrete by building solutions to being more abstract by imagining a solution.


Zones of Operation in the Kolbe Action Modes

You are at your best when you play (or work) in your natural conative zones. The Kolbe Theory specifies three Zones of Operation in each of the four Action Modes measured on a 10-unit scale. Each uses equal amounts of mental energy for creative problem solving and decision making.


Drew's and Billy's conative realities

Knowing about their differing natural strengths could have prevented the negative outcomes experienced by this father and son.

Drew Initiates action in Quick Start, which makes him great at speaking spontaneously, being a futurist, and being a risk taker. He resists Follow Thru systems that bog him down in procedures. Individualizing for clients is easy for him. His MO, which showed up on his Kolbe A Index of conative strengths, is standard for high performers in financial services.

Billy Initiates action in Fact Finder. This helps explain why he was a good student. (From junior high school on, Initiating Fact Finders get the best grades and score highest on the SATs.) He CounterActs in Quick Start, which certainly explains his reticence to deal with the uncertainties of cold calling and his lack of flow when responding to questions.

Father and son both ReAct strongly to opportunities in the Implementor mode. That's why they were so comfortable participating in sports and outdoor activities together. It worked well while Billy was growing up, but there was not an outlet for it during the business days when he was struggling and his father kept telling him, "Stop researching about what needs to be done and get out and do it."

Perhaps because Billy did not have his father's conative gift for gab, he had never felt confident getting up in front of people to speak. He describes himself as never having believed in "his abilities" as much as he wished he could. He has plenty of abilities (everyone has an equal amount of conative ability), but they were not valued or praised very often by his father.

All of these issues became clear when the Reality Check results were discussed, but it was too late to prevent the agony they had suffered. Drew had become so disappointed in his son that he lost his temper in front of employees and family on several occasions. That caused him to lose his wife's respect. She felt he was too demanding and authoritarian with their son. As she took her son's side, Drew told her she was the cause of their son's lack of asserting himself. The situation brought out the worst in their relationship and they ended up separating.

Billy left the business with even less self-confidence — and no financial security. Drew did not have the person he had hoped would take over the business. He had also lost considerable respect from his employees and a great deal of money because the distraction reduced his productivity. His greatest regret was losing the companionship of both his wife and his son.


The FM Reality Check for this family business told the members that

• Drew had unrealistic requirements for Billy in the role of future partner in his financial services firm.

• Billy had unrealistic self-expectations for his probable level of success as a future partner in the family financial services firm.

Far better outcomes are seen every time a wannabe FM is a good conative fit for roles that need to be filled in the business.


Reality Checks: Questions to ask yourself

[check] Have the family members in your business carefully considered the consequences if they do not perform well in the company?

[check] Does your FOB build on the conative strengths of all its employees?

[check] Do FMs get involved in your business for the right reasons?

[check] Are all three mental factors (thinking, feeling, doing, or cognitive, affective, conative) recognized for their importance to the FOB?

[check] Are FMs held to the same professional standards as NFMs?

CHAPTER 2

Protecting Values: Keeping Tabs on the Truth


Are you familiar with what we call "billable vacations"? An extraordinarily successful partner in an FOB professional firm confided in us that she and her husband had found "a neat way of double-dipping on billable hours for clients" when they traveled together. Her idea was not original. We're well aware of many of the ways some FOBs try to "play the game."

We're also aware of how easily businesses and the families become the losers.

It's a lot easier to keep tabs on the truth.

Lies hide in sneaky places. When it's your spouse or grandkid who discovers them, it's often "Game Over," and you'll never get a do over.

Your values are either an asset or a liability.

FOBs tend to be more sustainable than your average start-up if the values of the founder are clearly stated and they drive the mission and decision making within the company.

We define business values as conscious judgments or imperatives that deal with what ought to be done. Based on virtues, business values are a code of honor that pertains to ethics and that leads to obligations.


Values relate to desires, preferences, and goals. Values are not the "what" or the "how"; values are the "why."

Among our vast variety of clients, we've seen that those who are leaders of FOBs often feel they are "doing the right thing" when their values are tied to their mission. Non-FOB clients rarely talk in these terms.


(Continues...)

Excerpted from Business is Business by Kathy Kolbe, Amy Bruske. Copyright © 2017 Kathy Kolbe and Amy Bruske. Excerpted by permission of Greenleaf Book Group Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

About the Authors xi

Introduction 1

Chapter 1 Creating Sustainable Success 7

Chapter 2 Protecting Values: Keeping Tabs on the Truth 21

Chapter 3 How Hard Should You Work? 35

Chapter 4 Banking on Trust 53

Chapter 5 Boundaries That Build Better FOBs 73

Chapter 6 Telling It Like It Is-Or Not 91

Chapter 7 Developing Living Assets 109

Chapter 8 Inciting Next-Gen Ambition 139

Chapter 9 Knowing When Teams Won't Work 155

Chapter 10 Orchestrating Transitions 173

Chapter 11 Graceful Exits 193

Acknowledgments 205

Appendix 207

Glossary 225

Selected Kolbe Products and Services for Family Businesses 231

Index 237

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