Succession Planning in Family Business (redux)


father daughterI haven’t written about succession planning in family-owned businesses in a while, but the topic continues to interest me. (It was a significant issue in the novel I wrote, Playing the Game.) When should a company founder select a family member as the next CEO and when should the founder look outside the family?

The first piece of advice is not to leave this issue until the founder is in poor health or ready to retire immediately. Any succession plan requires time to implement, and the more time the better.

If family members are interested in the business, then they should be groomed—without making any promises—to acquire the skills and experience necessary to run the company. This may require a rotation through several departments in the business, each lasting at least two to three years. It may even require the heir-apparent getting experience outside the company, either in the same industry or another industry, to broaden his or her skills. In other words, it can take most of a career to prepare the successor to become the next CEO.

It’s also important to keep your options open. Don’t just groom one successor. Find two or three, both family members and non-family members. Having options helps everyone know that the business is being cared for and that the person selected will be fit for the job.

Open communications are critical throughout the entire process. The founder, the potential successors, and other stakeholders (both inside and outside the family) should be able to say at any point, “This isn’t working,” or to outline problems that have developed.

Also, it is best if there are trusted non-family members involved in the assessment as well. An advisor such as an attorney or CPA or executive coach who works with the business regularly can provide input on the strengths and weaknesses of the potential successor that mom or dad may not see clearly.

For more information on issues to consider, see

“5 tips for smooth ownership transitions for family businesses,” by Arne Boudewyn, The Business Journals, Feb 28, 2017

“How Do You Fire a Family Member?” by Gabrielle Pickard-Whitehea, Small Business Trends, Apr 29, 2017

“Succession Planning in a Family Business,” The Wall Street Journal, May 9, 2017

“Is nepotism in the workplace ever appropriate?” by Stan Silverman, The Business Journals, Dec 5, 2017

For other posts I’ve written on succession planning, click here.

When have you had to deal with a difficult succession planning issue, in a family-owned business or otherwise?

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Happy Holidays: Take a Moment to Breathe


2017 has been a tumultuous year for many of us. As it ends, take a moment to breathe deeply. Savor and celebrate your accomplishments and joys.

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Happy Holidays!

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Favorite Firings: Stray Discriminatory Comments by Management Complicate Litigation


operation-540597_1280In the Wolters Kluwer Legal & Regulatory newsletter for December 4, 2017, there were three cases reported that dealt with comments by management personnel about employees. In each case, when the employee sued, the employer was unable to get past a motion to dismiss or a motion for summary judgment. Thus, in all three cases, the company faced lengthy litigation that might have been avoided, had managers been more careful with what they said.

THE FACTS:

In Creese v. District of Columbia, Case No. 16-2440 (RMC), D.C.D.C., Nov. 11, 2017, a corrections officer alleged that he was fired because he was not “manly” enough. His supervisor had made a few comments such as, “[n]o pretty boys needed in jail, so you need to take your earrings out.” The judge found that plaintiff produced enough evidence of impermissible gender stereotyping to survive a motion to dismiss his Title VII and Section 1983 claims.

In Sestak v. Northwestern Memorial Healthcare, Case No. 16-C-6354, N.D. Ill., Nov. 28, 2017, plaintiff Sestak, a labor and delivery nurse, alleged age discrimination after she was discharged for cause. She claimed that an unidentified individual stated that “older nurses would have difficulty” complying with new guidelines because older nurses “are too slow and spend too much time with patients” and that one of her supervisors stated that “older nurses’ often have difficulty understanding when the mother and baby become separate patients.” The court denied the employer’s motion for summary judgment.

In Carter v. A&E Supported Living, Inc., Case No. 16-00574-N, S.D. Ala., Nov. 29, 2017, a nurse was removed from the shift schedule at a group home for intellectually disabled individuals and then sued for pregnancy discrimination. She cited supervisors’ comments to her as evidence that she was removed from her work schedule because of her pregnancy and/or the related “high risk” conditions that the supervisors believed her pregnancy presented. One supervisor stated plaintiff “was at risk to be hurt and [she] didn’t want that for her or her unborn child, for her baby; nor did [she] want to put the people that [the employer] serve at risk…” Plaintiff was required to provide medical documentation that it was safe for her and her unborn child for her to perform the duties of her position. The judge denied the defendant’s motion for summary judgment.

THE MORAL:

The general legal standard is that stray comments in the workplace do not automatically lead to violations of the discrimination laws. However, they can be evidence of a discriminatory intent. And, of course, the more egregious and frequent the remarks, the more likely courts are to find liability. I’ve written other posts (see here and here and here) about how supervisory comments can get their employers into trouble.

In each of these cases, the employer put forth nondiscriminatory reasons for the actions taken against the employee. But the existence of the supervisors’ comments about pregnancy or gender or age complicated the cases enough to let the judges refuse to grant the defendants’ dispositive motions. The employers may end up winning these cases, but they face lengthy and expensive litigation before they do. Settling the cases may prove to be the better option.

Moreover, in the environment we face today, with heightened sensitivity toward sexual harassment and discriminatory remarks, employers would be well advised to re-emphasize the need to avoid even casual comments about employees’ health, appearance, and any other topics that might touch on a protected status.

It’s a shame that we must be so careful in the workplace and avoid many topics of everyday conversation, but it’s the safest course. As demonstrated by these three cases decided by different courts in recent weeks, supervisory comments continue to present litigation challenges to employers. It is best to involve Human Resources and lawyers if there is any question about what topics are permissible to discuss.

What’s your opinion on the current state of conversation in the workplace?

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Coping with Implicit Bias in Mediation


workplace-1245776_640A few weeks ago I attended a training program for mediators on implicit bias. As the presenter said, we all see every situation we encounter through the lens of our own experience. That’s what gives rise to implicit bias.

One definition I’ve seen of “implicit bias” is “a term of art referring to relatively unconscious and relatively automatic features of prejudiced judgment and social behavior.” This sounds bad, but the presenter at the training program made it clear that he did not think implicit bias is bad or wrong or morally repugnant. In his opinion, implicit bias isn’t the same as prejudice. It is simply the lens through which we see the world. We can’t escape it, but we should be aware of it.

Whether it has a moral dimension or not, implicit bias does impact every step of dispute resolution. To begin with, our view of the world colors how we interpret the events that happen to us. Moreover, the lens through which we see events stirs up different feelings and reactions about what happened in each person involved—each one of us sees the world differently.

So what should mediators do about implicit bias?

Recognize and Manage Your Own Implicit Bias.

The first step in dealing with implicit bias is to be aware of it. As mediators, we should reflect in advance what aspects of the case might trigger our own emotions, as well as those of the parties. We need to be mindful of our own hot spots.

We can prepare ourselves before a mediation by setting aside our own problems and concerns, so that we can address the parties’ needs. Some mediators engage in other physical activity before mediating. Others practice meditation or other mindfulness exercises. The point is to open our minds to being empathetic to people who come from different perspectives than we do. We need to be ready to engage the parties where they are, and not where you are.

Mediators are supposed to be neutral and impartial. Managing our own implicit bias is critical to our value to the dispute resolution process.

Recognize and Manage the Implicit Bias of the Parties.

The next step is to understand others’ perspectives. As mediators, we need to manage the process and not let the parties act vindictively. But it is important to let their emotions into the process. Let the parties tell their stories.

Asking questions in a calm and respectful manner is a good way to determine what biases each party (and each attorney) brings to the dispute. Sometimes, the parties are less of the problem than their lawyers, so it might be necessary to explore the attorney’s perspective as well as his or her client’s .

As mediators, we have to assess whether it is more productive to have these probing conversations in a joint session or in a caucus. If the parties are working well together, it can be more effective to let each person tell his or her story, then ask the other “Does that ring true for you? If not, why not?” But if they are not behaving respectfully, or if emotions rise out of control, then separation is probably best. Then, however, the mediator must act as the interpreter of the story to the other side . . . which risks bringing our own biases into the discussion.

The key to dealing with implicit biases is to treat them as an unavoidable part of the equation. They aren’t good or bad, they are just another set of variables that will impact the process and the result. Remember that mediation is designed to let the parties resolve their own conflict—biases and all.

When has your implicit bias impacted a dispute you were trying to resolve?

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Five-Minute Meetings—I Wish!


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Last week I read an article by Sue Shellenbarger in The Wall Street Journal entitled “Can You Keep Your Meeting to Five Minutes?”

All I could say to myself was, “I wish!” My corporate life involved days full of hour-long meetings. Almost every meeting, it seemed, was scheduled for an hour.

In a matrix organization, this means a lot of meetings, just to keep up with one’s bosses, staff, and peers. A direct supervisor. A dotted-line supervisor. Six peers in the line organization I supported, as well as six Human Resources peers. Six direct reports. (Those last three categories varied, but six is about average.) That’s 20 hour-long meetings a month.

Then there were the group staff meetings, which were usually two hours long—one for the line organization, one for the HR organization, my own group staff. That’s three more monthly meetings.

There were also periodic all-day meetings with one group or another. Each of those meetings had agenda items that were one hour long—six or seven meetings packed into a single day.

And none of the meetings were real work. Most of them were just to keep tabs on what’s going on. So add in the project team meetings, the crisis meetings (when an employee needed serious discipline or firing, or an employee complained to HR), and the meetings with outside consultants.

Sometimes decisions were made, but often the meetings were status reports. I can read a status report. I can ask questions in a phone call or email or text message.

It wasn’t that the meetings were completely wasted time. They did insure that people were on the same page. They did build relationships among people whose jobs often took them in different directions working with different parts of the organization.

But for every meeting to default to an hour? Probably too long.

I typically had five or six hours of meetings booked on my calendar before I walked in the door each morning. I instructed my administrative assistant to keep two hours free on my calendar every day. She could move the time around to fit in meetings, but I wanted the two hours to get some actual work done. Some days she couldn’t do it.

I got more done in half a day on the weekend than I did in a full day during the week. Because on Saturday and Sunday there were no meetings.

So a five-minute meeting? Even if there were three times as many meetings, I would have come out ahead. Or a default of 30 minutes for a meeting would have improved my time management ability.

I remember one presentation I was scheduled to give to the company’s executive committee. My hour-long slot got pushed back until I only had fifteen minutes. My topic was admittedly a longer-term priority than some of the day’s other agenda items, so I understood why I was the presentation that got squished.

I had a sixteen-slide deck to present. I could hear the sigh of relief when I asked the executives to turn to Slide 13. The earlier slides were data, which I wanted to be sure they saw. But what was important for the time I had left was the decision they needed to make. That discussion started on Slide 13. We reached a decision in the 15 minutes of time that remained. We didn’t have as rich a discussion as I had wanted. But we moved my project forward.

I know I’m whining in this post, about too much time in meetings, about the wrong types of topics discussed in meetings, about having my own meeting time cut. But the bottom line is true—organizations spend too much time meeting and not enough time doing.

For more on holding more productive meetings, see “How to Improve the ROI of Your Staff Meetings,” by Dianna Booher, posted November 9, 2017, on TLNT.com. As Ms. Booher points out, meetings cost time—do you know how much your meetings cost your organization?

What meetings do you attend that could be shortened, delegated, or eliminated?

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Alpha Dogs and Leadership


dogs-1231010_1280Because this blog was on hiatus all summer, I didn’t comment on the political stalemates and morasses during those months. And I’m not going to comment directly on the ongoing issues today. But what I saw over the summer—and what I continue to see this fall—reminds me of a situation I encountered many years ago involving “alpha dogs” in a corporate setting.

My work group attended a gender diversity program sometime in the mid-1990s. I was not in management at the time; I was one of several individual contributors who ranged widely in seniority. I was in the middle of the pack at the time.

One of the comments about gender differences that the facilitator made during this gender diversity session was that men often try to be the “alpha dog” in a meeting by one-upping the other men in the room. Women, on the other hand, care less if they are seen as the highest power in the room. (Keep in mind that this program took place decades before Sheryl Sandberg’s “Lean In” philosophy became vogue.)

I might have forgotten this “alpha dog” comment, except that a few days after the diversity program, I was talking about it with a male colleague, one of the more senior employees in our group. He freely admitted, “That’s why I have problems with [our male boss]. He and I both want to be the alpha dog.”

I thought about it. He was right—these two men did both try to be top dog. And trying to be the alpha dog wasn’t working for my colleague, because he didn’t have the corporate authority to pull it off. He wasn’t the boss, but he often tried to be.

I made a deliberate decision. As a fairly young and introverted female, seeking to be the alpha dog wasn’t going to work for me either. Therefore, I would consciously act like I was NOT the alpha dog. I would not overtly try to one-up other people I encountered in the workplace. I would defer to others intentionally. I would seek to provide good service to my colleagues and clients, rather than to command them. That didn’t mean letting others step all over me, but it did mean not being arrogant or seeking top billing on projects.

I’ve written before about “servant leadership,” a philosophy that advocates leading by serving others. I didn’t hear of that concept until ten or more years after the 1990s gender diversity program, but it resonated with me when I learned about it.

How did servant leadership work for me?

Generally, it worked well, at least through the middle years in my career. Over time, there were more and more times when I had to take command and make decisions. And occasionally, I didn’t get as much credit for my work as I thought I should have. But those times were less frequent than one might expect.

However, there were times after I moved into senior corporate roles when more of a command approach might have worked better. There were definitely people—mostly men, but a few women—who took advantage of my understated approach or who thought me weak. I could usually deflect them by being the best prepared person in the room, but there were a few jerks who only understood power, who only thought highly of other “alpha dogs” and sought to be the “alpha dog” with everyone except the CEO. They were never my favorite people, but sometimes I did have to flex my style to deal with them effectively.

dogs-1231008_640Unfortunately, many of today’s leaders—particularly the partisans on both sides of the aisle in Washington—seem to be of the “alpha dog” mentality. One-up-man-ship is all they understand. And so our nation has become increasingly polarized. If more of them would exercise servant leadership, we would all be better off.

What leadership style have you generally used? When have you had to flex your style?

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Leadership and the Truth: Lessons from the Vietnam War


7UcgHxn-asset-mezzanine-16x9-mAfzizc.jpg.crop.480x270Like many Americans, I’ve been watching The Vietnam War, the documentary film series by Ken Burns and Lynn Novick, which is currently available on PBS. I was a child during this era in history, and didn’t pay much attention to the news from the battlefields. I remember the protests in the U.S., and I remember the fall of Saigon, but I don’t remember much about the events leading up to the end of the war.

leadership sign 2I haven’t watched all the episodes in the series yet, but from the episodes I have seen, one of my prime take-aways is the importance of truth for leaders in any organization.

Avoiding the spread of Communism in Asia was an important objective for U.S. leaders in the early 1960s. We can argue today over how strategic Vietnam was, but the fact was that political and military leaders in many nations during that era were heavily influenced in their decision-making by the conversion of Eastern Europe into a Soviet bloc. Most of the populations in the U.S. and in Western Europe in these years supported their leaders’ goal of deterring Russian and Chinese expansion.

Despite the laudatory objective, the U.S. decisions in Vietnam went horribly wrong almost from the beginning. Failure of the political and military leaders to seek the truth and tell the truth were large factors in creating the fiasco that Vietnam became.

The need for truth flows in both directions in every organization. Leaders must seek the truth from as many sources as they can, and they must tell the truth in every word they utter. Truth-seeking and truth-telling apply to all interactions with subordinates, peers, superiors, customers, investors, and the public—in short, to every communication with internal and external stakeholders.

The Vietnam series is brutal in pointing out incidents where our military and political leaders did not seek out information from those with first-hand knowledge of conditions on the ground, where underlings feared to volunteer negative information that leaders didn’t want to hear, and where leaders lied or hid information from the public. As a result of these failures to seek truth and to tell truth, bad decisions were made for far too long, and these bad decisions were kept secret from the public who might have opposed the carnage sooner, had they known the facts.

There’s a saying about how generals tend to fight the last war. They learn lessons from that war, and use those lessons in the next conflict. But they might forget other lessons of history or they might see the current battle through the wrong lens because of their focus on the past. That was part of the problem in Vietnam.

Many corporations also fight the wrong problem because they do not see the current challenge clearly. They focus on the wrong competitor, the wrong customer, the wrong product or technology. Their vision is myopic, they don’t see the big picture.

Moreover, leaders in any organization sometimes forget the importance of truth. The reasons for not seeking or telling the truth might vary, but it seems to be part of the universal human condition to only hear what we want to hear and to only say what we wish was true. Part of the rationale is self-preservation, part is wishful thinking, part is a futile attempt to protect those who might be harmed by reality. In the end, however, the truth generally comes out.

Good leaders make an extra effort to seek and to tell the truth, even when it hurts. They look for multiple sources of input and they are candid and transparent in all communications. They realize that facing the truth sooner rather than later is usually best for the organization . . . and, in the long run, for their own reputations.

When have you seen avoidance of the truth cause problems in an organization?

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