Family business mgmt embed Feb 2011 Short Version

Family Business An overview:

Family Business An overview Domenick Celentano 908 866 1366 dom@domenickcelentano.com http://www.domenickcelentano.com/home http://blog.domenickcelentano.com

Domenick Celentano Background:

Domenick Celentano Background Celentano Bros Inc. Key positions over 30 years Consultant to numerous Family Business Teach Family Business Management Fairleigh Dickinson University

Family Business Facts:

Family Business Facts 35% Fortune 500 50% GDP 48% of Workforce 90% of All businesses

Family Business Facts:

Family Business Facts Family Business Average CEO Tenure = 24 years Public Company Average CEO Tenure = 6 Years

The Three-Circle Model of Family Business:

The Three-Circle Model of Family Business Interdependence of the Family and Business System The parts effect the whole Everything affects everything else Combining Family and Business Makes Life More Complex Family Business Ownership Overlap

Interlocking Systems Challenges:

Interlocking Systems Challenges FAMILY Emotional Support Security Fun Inward Focus BUSINESS Tangible Outcomes Task Oriented Productivity Outward Focused Ownership Creates The Plan Vision Future Growth Wealth Stewardship Am I the son or manager ? Am I the Father or the boss? Am I the majority stockholder… the boss… the father? Overlap

Advantages and Disadvantages:

Advantages and Disadvantages Advantages Strong motivations of family members for business to succeed Long Term View (Generational) Disadvantages Fuzzy Boundaries Lack of Empowerment

Insider vs. Outsider Perspective:

Insider vs. Outsider Perspective FAMILY Permanent Relationships Unconditional Love Role based on Relationship Maintain Harmony Power… Hierarchy Fairness is equality BUSINESS Temporary Relationships Conditional Approval Role based on Function Maintain Productivity Power, Performance = Title Fairness = performance/equity

Triangulation Key communications issue:

Triangulation Key communications issue Mom Child Dad

For The Early Successor Unique Challenges:

For The Early Successor Unique Challenges Family business defines identity Grow up sooner… learning earlier Family = Harmony Career and Wealth connected Entitled to a job Too much Compliance or Defiance Enmeshment Golden Handcuffs

Evolution of Family Business:

Evolution of Family Business Entrepreneurial Personal Goals Intuition Hard Work Trial and Error One Man Band Managerial Outside Expertise Financial Systems Structure Tension between Entrepreneur & Managers Professional Market Driven Strategic Planning Mgmt Development Goal Setting Add’l Structures & Systems Growing Pains Focus - Entrepreneur Focus - Family Focus – Business not Family

Where do we start?:

Where do we start? Why Does This Family Have This Business? What Benefit Does The Family Derive From The Business? Why Does This Business Have This Family? What Benefit Does The Business Derive From The Family? Assessing Human, Social and Economic Capital

Where do we start?:

Where do we start? Sustainable structure for family? What does the family want? Good communications? Healthy family = healthy business. Can business accommodate growth of family? Families grow exponentially and Businesses usually do not. Hybrid Family/Business Plan

Thank Your for viewing Family Business an Overview:

Thank Your for viewing Family Business an Overview Domenick Celentano 909 866 1366 dom@domenickcelentano.com http://www.domenickcelentano.com/home http://blog.domenickcelentano.com