​Family (Personal) Challenges
 
Emotions and inability to separate business and family. Family problems and dynamics will affect the business. Divorce, separations, health or financial problems also create difficult political situations for the family members.  Emotions can interfere with business decisions, and trying to make one another happy constantly is unrealistic.
 
Tunnel vision. Lack of outside opinions and diversity on how to operate the business.  No-one, like a business coach, to ask the tough questions.
 
Role confusion. Roles and responsibilities (for active and passive family members) must be clearly defined. Absence of clear written policies and business norms for family members.  Going from family character to business professionalism can create confusion.
 
Paternalistic and Overly Conservative. Control is centralized and influenced by tradition instead of good management practices.  Older family members try to preserve the status quo and resist change. Especially resistance to ideas and change proposed by the younger generation.
 
Communication problems. Usually provoked by role confusion, emotions (envy, fear, anger), political divisions or other relationship problems create barriers to effective communication.
 
Retirement and estate planning. Long term planning to cover the necessities and realities of older members when they leave the company.

​When you own a family business, there are two types of challenges you have to deal with; Business Challenges and Family Issues. We will talk about both, this week starting with Business Issues.

Business Challenges
 
Lack of written strategy. No documented business plan or long term planning. Decisions are made day-to-day in response to problems. No long-term or strategic planning.
 
Control of operations and compensation problems for family members. Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified.  Lack of participation in the day-to-day work and supervision required. Which family members are shareholders vs. daily management.  Difficulty controlling non-participating members of the family.
 
Vision, Growth and Expansion. Each family member has a different vision of the business and different goals. Problems due to lack of capital and new investment or resistance to re-investment in the business.  What measures must be taken to grow locally, nationally, and internationally.
 
Succession Planning. Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions.  Problems when the next generation is not adequately prepared for take-over.  There are some specific issues related to the third generation.
 
Business Valuation and Exit strategy. No knowledge of the worth of the business, and the factors that make it valuable or decrease its value.  No clear plan on how to sell, close or walk away from the business.
 
Lack of talent and Training. Hiring family members who are not qualified or lack the skills and abilities for the organization. Inability to fire them when it is clear they are not working out.   There should be a specific training program when you integrate family members into the company. This should provide specific information related to the goals, expectations and obligations of the position.
 
High turnover of non-family members. Happens when employees feel that the family “mafia” will always advance over outsiders and when employees realize that management is incompetent.

You may know that Tom Gosche, Business Strategist of GLM, has been the President of the local Rotary Club of Schaumburg Hoffman Estates. This club has given time money and Energy to local causes for over 53 years. During that time, when the club was presented with a need, we figured out what we could do to help.

Along the way, we help start the Schaumburg AM Club and have been working together as much as we could to help the local community.

This project is no different. Dave Ligman, Autos teacher at Hoffman Estates High school, has been working with all of us over the years finding outstanding candidates for our Applied Technology Scholarships that helped students pay for education and training in the trades. We provided around $10,000 a year and had candidates’ winning the Rotary District 6440 Awards as well.

About a year ago, Dave Ligman mentioned to Don Minor, a long time Rotary member and very active with our Applied Technology Scholarships, that many students still need help getting the tools they needed for the training and beyond. Don found fellow Rotarians that could help put this together. Cris Hinojosa, owner of BNC Auto Body, gather the tools list and made contacts in getting quality tools.

Don enlisted the Help of the Schaumburg AM Club and Jim McKenzie came in to help. Holly Fath, our Club’s Youth Service Director became a cheerleader for the cause. After a short presentation at our meeting, hearing from a student we had award scholarships to in the past, we asked for financial support of the members in the club. Now, here we are giving the first set of tool kits to worthy students to use during their education and beyond.

I know there are many clients of GLM who are in the Auto industry. If you are interested in helping young students and potentially future employees, please contact Tom Gosche tgosche@scherotary.org 

Here is a Daily Herald Article Highlighting the program:
https://www.dailyherald.com/entlife/20220707/rotary-clubs-give-district-211-automotive-students-jump-start-on-careers