| "I love Toby. He's my oldest son, he's Vice | | | | Water".Personally, I believe the last thing you |
| President of Sales but he just doesn't get it. My | | | | should want to do is sacrifice family for the |
| daughter should be running this business as I | | | | business. If you actually get to that point in the |
| transition into retirement, she's brilliant but she's | | | | process ----- Don't sacrifice your family life, your |
| married to a surgeon and doesn't want anything | | | | relationship with your children or the relationship |
| to do with wholesale distribution. She's quite happy | | | | between brothers and sisters. |
| with all the charity work she is involved in. My | | | | Sell the business. I repeat --- If it comes to that |
| youngest son has potential but he's only twenty | | | | - Sell the Business.Put Business Needs Ahead of |
| two and just isn't ready to take over a $200 | | | | Personal NeedsThis sounds contradictory to my |
| million dollar distribution business. Two events have | | | | previous statements doesn't it? Well, I am not |
| occurred recently that are wearing on me a little. | | | | recanting. I am assuming that the situation has not |
| First, I transferred 75% of my stock equally to | | | | deteriorated to the point of family destruction. |
| my three kids, 25% each. All three receive a | | | | Often times there are situations where a family |
| salary although my daughter rarely appears at the | | | | member is relieved to not have to work in the |
| office due to her charity work. The second event | | | | family business. Johnny is there because he |
| occurred after I hired a succession consultant to | | | | doesn't want to disappoint Dad. Johnny feels he is |
| help me transition into retirement. He told me that | | | | supposed to act like an incumbent president |
| Toby was incompetent, destructive to the | | | | because the family expects it but he would rather |
| business and I should fire him." Excerpts form a | | | | be a missionary in Africa or build his own auto |
| real world conversation disguised to protect | | | | parts dealership or pursue some other passion |
| confidentiality.Does this conversation sound | | | | they have.Remember, firing a family member |
| familiar? Maybe it's not about your son or your | | | | doesn't necessarily mean cutting them off |
| daughter. Maybe it's about Aunt Lilly or Uncle | | | | financially without some form of remuneration. |
| Chester. The point is if you own a family run | | | | Every thing is negotiable. This is especially true if |
| business with multiple family members working in | | | | they own stock even if there is no legal buy out |
| the business, chances are you have or will face | | | | obligation. The last thing you want is an angry |
| the dilemma of what to do when a family | | | | ex-employee that is a family member and a |
| member just does meet satisfactory | | | | stockholder. They most likely will know about all |
| performance standards.The key word here is | | | | the skeletons in the closet, the aggressive tax |
| family and the closer the family member is to | | | | position the company has taken and many other |
| you the owner, the more difficult the decision and | | | | issues that the company may not want to go |
| action becomes. If the non performing party | | | | public. So, although the family member may not |
| happens to be your son or daughter it is even | | | | have a legal position to force a minority stock |
| more difficult, after all you have your home life to | | | | buy-out, it may be in your best interest to |
| consider and that son or daughter has a | | | | negotiate some form of buy-out that is fair to |
| relationship with their mother who happens to be | | | | the family member. |
| your wife. Don't kid yourself about your level of | | | | Consult your attorney, but remember, this is still |
| control at home being equal to your level of | | | | a family issue.Don't ApologizeIf you can turn this |
| control at the office.You Will Ride the Roller | | | | family/business problem in to a win-win situation, |
| CoasterTerminating a family member will likely be | | | | there is no need to apologize. Don't backpedal and |
| the most difficult decision you will ever have to | | | | don't be afraid to confront other family members |
| make as a CEO. There will be ups and downs in | | | | that may not be supportive of the process.This is |
| the process. However, before you come to the | | | | a business and once you have determined that |
| conclusion that you are actually going to hand | | | | this situation will not destroy the family you must |
| Aunt Lilly or your son a pink slip, you must be | | | | treat it in a professional business manner. |
| sure that you have exhausted every possible | | | | Remember, if it is going to destroy the family --- |
| option and scenario imaginable to solve the | | | | Sell the Business.All This Can Be Avoided ---- |
| problem short of termination. Your closeness to | | | | Right!!!As a family business consultant in wholesale |
| the family member is the major determinant to | | | | distribution, it would be easy to preach to you |
| the amount of patience and effort you put into | | | | about how to avoid this situation in the first place. |
| the process. And of course, the amount and type | | | | You can read all the articles, the advice, research |
| of destructive behavior is also paramount to the | | | | on the internet and the books that give advice on |
| decision you make. It is possible that this family | | | | family management offering solutions like the |
| member can be placed in a position that is not | | | | following;- Establish specific job descriptions for |
| detrimental to the company and does provide | | | | family members- Establish expectations up front- |
| value. This can be a drawn out process that | | | | Create advancement criteria up front- Establish |
| starts with frank, open & honest communication | | | | official family compensation programs paying |
| with the family member. It will most likely require | | | | family members based on the position- Establish |
| some form of counseling to be effective and | | | | accountability and structure up front- Create a |
| may require a separate family discussion | | | | Board of directors that is not family dominated- |
| dependent upon circumstances.If you enlisted the | | | | Define a philosophy and stick to it- Make no |
| aid of a consultant, remember that as an outsider | | | | exceptions for family regarding performance- Set |
| it is very easy for them to see a clear picture of | | | | specific education requirements- Annual training, |
| the business side of the situation due to not being | | | | coaching and mentoring requirementsAnd Wolves |
| involved in the actual culture of the business. | | | | still Roam the Streets of Chicago. Yes, these are |
| However, it is likely that they can't come close to | | | | all good ideas but give me a break. This is not |
| feeling or understanding the emotions that you will | | | | reality when we are talking about your sons and |
| experience during this process unless they | | | | your daughters, your wife's brother or sister, |
| themselves have gone through it in a family | | | | your brother's son or daughter or even Uncle |
| business they owned. I say that because having | | | | Joe.In the end ---- immediate family does come |
| fired my own wife, brother-in-law and nephew | | | | first. If you find yourself in a difficult situation, |
| from my own family business exposed me to the | | | | take a step back. Evaluate your circumstance |
| turmoil, the pain, the frustration, the guilt and the | | | | form both the business side and the family side. |
| personal second guessing that you too may | | | | There is no easy answer but nothing is impossible. |
| experience as you go through the process.Accept | | | | Keep the faith. E-mail for template tools like the |
| Your CircumstanceIf you have exhausted every | | | | family doctrine, the family management |
| effort to salvage the situation and feel you have | | | | partnership agreement or the family code of |
| no other alternative, understand going in that it is | | | | conduct that may help you resolve some of your |
| going to be extremely difficult to terminate a | | | | internal family issues. Dr. Rick Johnson () is the |
| family employee in the same effective manner | | | | founder of CEO Strategist LLC. an experienced |
| that you would terminate a non family regular | | | | based firm specializing in leadership and the |
| employee. Complications are even greater if that | | | | creation of competitive advantage in wholesale |
| family member is a stockholder regardless of the | | | | distribution. CEO Strategist LLC. works in an |
| type of legal agreements your lawyer may have | | | | advisory capacity with distributor executives in |
| drawn up. The first thing a family member will do | | | | board representation, executive coaching, team |
| when facing termination is to seek the support of | | | | coaching and education and training to make the |
| other family members. If it is your son or | | | | changes necessary to create or maintain |
| daughter this could actually create a serious | | | | competitive advantage. You can contact them by |
| challenge at home. It is no secret that one of the | | | | calling 352-750-0868, or visit for more information. |
| primary reasons an entrepreneur starts a | | | | CEO Strategist - experts in Strategic Leadership |
| business in the first place is to provide income and | | | | in Wholesale Distribution. |
| security for his family. "Blood Is Thicker Than | | | | |