Implementing Change in Business and Family

It’s one of the more curious features of human nature: many people will put up with known pain, rather than risk something worse by changing their circumstances.  The condition even owns its own phobia:  metathesiophobia, from the Greek:  “meta” = change and “phobos” = fear.

Fear of change, and problems implementing change, are common causes of conflict in both Family Business and Business Families.

Business Families often isolate themselves in a private bubble of family, business and industry.  Within that bubble they’re very good at what they do – which is fine … until it isn’t.  Businesses that get complacent, or worse – whose leaders fossilise – stop engaging constructively with the outside world, with their own markets, and with their own people.  Eventually, they fall out of favour with even their most loyal customers – as their products and services go out of date, and become irrelevant.  Competitors rejoice!

Progressive family members, and anxious staff, see the business sliding down a slippery slope and, quite sensibly, start to fear for their careers and their own family’s futures.  They either leave, get into fights with parents and business leaders, or suffer in silence.

Meanwhile, something similar is probably happening in the family: (younger) family members get increasingly frustrated with (older) parents / family leaders, who stifle change and progress.  Because this often relates to issues of stalled succession, nextgen development, or guiding the family’s stewardship activities, it places their entire futures at risk, and makes them question the “family business dream.”

When some of these leaders recognise part of the problem and try to initiate what they now perceive to be necessary changes – which usually involves modernising  and professionalising their business and family operations – they discover they have neither the insight, the people, nor the systems required to help them implement any significant improvements.

The reasons aren’t hard to find: over the years their personal leadership style created a culture that generally didn’t invite any serious attempts at innovation or change (except, perhaps, in strictly technical areas).  Their best people either lost interest, de-skilled, or left to join more progressive businesses.

Change is challenging, and the more fundamental it needs to be, the more challenging it gets.  When a business, or a family, recognises the need for change they’ve developed “Intent” (ie: Motivation).  To produce an outcome they need to “Activate” (start the process of change) and “Implement” (make the change happen).

Typically, Activation is blocked, or botched, because key people in the business or the family (or both) don’t have the strategy, structure, systems or skills to get things started.

That leads to more frustration, since it looks like further evidence there isn’t any real commitment to change.

Solution

Negotiate acceptance of the need to make changes by building consensus around everybody’s: (a) uncovered needs and interests and (b) their commitment to satisfy their own, and each other’s, needs and interests.

Avoid conflict by moving the blockers to change (business leaders / family elders) into non-operational, sponsoring and governance roles, in the business and/or in the family.  On properly operated Business Boards and Family Councils they can be well-informed, and have their views heard and respected, while being prevented from blocking required changes.

Change Process:  because the business (and the family) are not wired for change, they need to back up, group up, and consolidate, before going forwards.  That requires a 3 step process:

  1. Educate – get everyone up to the same level of understanding and thinking, so they can get onto the same page about: (a) what needs to be done; (b) why it needs to be done and, (c) how to do it.
  2. Plan – develop consensus over the go-forward plan (create specific change goals), including the structures and processes required to ensure it all happens. Allocate responsibilities and accountabilities to individuals, along with specific milestones, measurement criteria, and delivery deadlines.

Implement – make the changes happen.  Use the new structures, and new commitments to do things, to: review, recognise and celebrate success; acknowledge and respond to failures; and above all – to maintain momentum.

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