A clear, concise, well communicated, self-affirming vision is a critical component to the creation of an unstoppable family business succession plan.  However, just establishing a vision in this complicated world is not enough because in the business succession realm, this vision involves teamwork. Unfortunately those whom we endear, those whom we love, those whom we depend upon to continue our businesses and those who depend upon us for their careers can complicate our circumstances and the achievement of a succession vision that on a good day has many moving parts and on a bad day can appear mind boggling. In the midst of complications with family, key managers, lenders and vendors succession can become such a hassle that a business owner may want to isolate himself. Unfortunately this isolation is completely counter productive to the achievement of a vision that requires a team effort. Within the realm of business succession planning, the vast majority of these succession problems are cause by vision conflict. Allow me to explain this frustrating predicament and the remedy.

Vision conflict is a team problem and notably the nemesis of synergy. Team work and synergy require a unified vision by all members of the team. Any divergence from a well articulated vision erodes synergy. Vision conflict occurs when the leader/owner/operator and supporting family members and key managers use assumption to support their individual visions. Due to any number of real or imagined reasons, family members or key managers do not feel comfortable expressing their expectations of other team members. When assumptions are the foundation of significant miscommunication we have vision conflict. Consequently team members and their goals become the victims of unreasonable expectations. Expectations are unreasonable fundamentally because interdependent team members have not openly and freely expressed their expectations and engaged in the discussion, debate and compromise required to deem expectations as reasonable.  

Team vision conflict is resolved by adopting Operating Covenants between higher powers (owner/operator) and lower powers (employed family/key managers/vendors). There is a natural reluctance within the family business to express expectations of others. The process of adopting Operating Covenants alleviates erroneous assumptions and gives everyone who could crash the team and/or impact the fulfillment of a unified vision the peace of mind that all members of the team are pulling in the same direction. During Operating Covenant process everyone would communicate, refine (where necessary) and ultimately affirm reasonable expectations of each other that will give the owner/operator and all those associated with the succession vision the confidence and freedom to engage in team endeavors without reservation that they are not being respected and/or their needs are not being fulfilled.  

The purpose of Operating Covenants is to bring formality to the acknowledgement of reasonable expectations. This formality facilitates effective interaction which notably includes accountability, between otherwise complex relationships involved in a team initiative such as business succession planning. The process of formality recording reasonable expectations provides the foundation for confidence and freedom to make a commitment to a team initiative. Expressed reciprocally, the purpose of Operating Covenants is to preclude unreasonable expectations that become embedded obstacles to efficient and effective communication and ultimately evolve into vision conflict.  

Operating Covenants are pursued at the pleasure of the higher power because he/she believes that clarifying expectations is in everyone’s best interest. Obviously, the owner as the highest power within a family business could conclude that he/she does not need to waste time on silly covenants.  This owner recognizes that he or she could just dictate to everyone that “it’s my way or the highway.”  Although dictating to some degree would relieve erroneous assumptions, team leaders must be aware that team conformity and commitment are internal elections. It is easy for one to say they are a team member and they will do as they are told while on the inside they are committed being an organizational terrorist. Dictatorial, positional leadership may accomplish short-term goals, but long term leaders inclined to dictate should be aware that passive resistance will only follow while the leader is present and strong-willed resistance will just disengage ASAC (as soon as convenient).  Both forms of passive or active vision conflict under the best circumstances result in internal withdrawal from the succession commitment and under the worst case circumstances result in obvious sabotage of the leader’s vision.  

I suggest that the preferred course of action is for all members of a team to confirm acceptable/reasonable expectations that will motivate everyone to choose to work together. Vision conflict does not happen over night and it is not resolved overnight. The development of Operating Covenants is a deliberate process that begins with private meetings with a facilitator to allow everyone to have an opportunity to release their genuine feelings regarding expectations. In many circumstances, family members or managers must be given time to articulate their feelings regarding the unreasonable expectations they have struggled with in the past before they can look to the future. The process allows all operators to have an opportunity to express their perspectives that are probably the foundation of unreasonable expectations. The process of discussing, refining and ultimately reducing expectations to writing, leads to enlightenment as to what is unreasonable and the reasonable. The exchange of feelings and ideas with an experienced facilitator in private filters out the bulk of the unreasonable expectations that otherwise expressed face to face with the other party would create team and/or family confrontations that could have long range deleterious impact.  

When all parties are confident in their expectations of others, enlightenment continues as the presumed reasonable expectations are exchanged, again in private with the facilitator. Reaction to expectations in private allows for more emotional filtering that avoids unnecessary confrontation with family members or key managers. The facilitator who has experience dealing with dysfunctional family and management dynamics helps manage reactions and coach all parties in the direction of more reasonable expectations.  After one, two and even up to three exchanges, with the confidence that eighty to ninety percent of the expectations would be considered reasonable, the family members and/or managers are brought together face to face to work off the edges and confirm that the expectations are worthy of a covenant and that everyone will do everything possible to fulfill and accept cross accountability when a reminder is needed that someone is operating outside of the reasonable expectations.

Reasonable expectations and the willingness to accept cross accountability is the silver bullet to team synergy. Communicating, discussing and agreeing upon the ownership, operating and family interaction expectations enables intense, motivated business operators to maintain productive relationships during the predictable periods of stress that accompany business operations. Operating Covenants relieve or preclude Vision Conflict.

 Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.