It was 7pm and the chief executive of a family business was going through the accounts. There were discrepancies. Slowly, he was coming to a terrible realisation. It dawned on him that he might have been taken for $1 million, someone inside the business had been embezzling, big time. He felt sick to his stomach. He called the facilitator of a family business forum he belonged to. The facilitator hit the phone and within half an hour, three members of the forum popped around.
“What you need now is a forensic accountant and I know a good one I can put you in touch with,” said one member. “I have a terrific PR contact who can handle this for you if it goes public,” said another. It was getting late, they had all had families to go to and get ready for work the next day. Not to worry. They sat and brainstormed the problem. By 9pm they had come up with a solution. Relieved, the chief executive went home. Remarkably, he slept well that night.
Family Business Australia has been running family business forums since 1998. There are now 32 of them nationwide, mostly in Melbourne and Sydney. In the forums, about eight to 10 family business members get together about 10 times a year to discuss big issues, including one session which is a retreat.
The sessions go for four hours. In the first two hours, members discuss three issues: the business, family related issues and how they, themselves, are going.
The business discussions get into such details as financials, growth plans, potential acquisitions, sourcing capital, internal people management systems and consolidation of premises. The family related issues are more complex, and more personal. Then they have to talk about how they, personally, are coping. Are they getting enough sleep? Are they still at the computer at 11pm?
The second two hours are spent brainstorming the issues and questions that have been raised, coming up with advice and solutions.
Now of course, there are other business self-mentoring groups around, for example the CEO Forum and TEC. But what makes the family business forums different is that they are the only ones that allow people to explore messy family dynamics.
And it’s the family dynamics that make running a family business lonely. There can be all sorts of issues. You’re a chief executive wanting to take control but your father, the chairman of the board, won’t move on. Your son isn’t handling customers well and you’re losing sales. You want the business to continue but your children don’t want a bar of it. Your brother, who is handling the IT, is having marriage difficulties so he’s preoccupied with things other than the business. A family member is getting a good salary but they’re not measuring up. The list goes on.
The family business forum is the space where people can raise tough issues and talk them through. Other members, who have had similar experiences, offer their insights and guidance.
Pamela Low, who runs forums in Sydney, sums up why the family business forums are so unique.
“A lot of these other groups are very focused on the spread sheet and the balance sheet and the bottom line. All of those things are discussed in the forum group, but it’s all the rest of it too,’’ Low says.
“The important part is that they get to talk about issues they can’t discuss with anyone else. They need to have a place where they are heard. If you work with your family and you can’t really go to that family and bring up issues or problems or concerns. Some of these guys can’t even talk to their accountant because it’s the family accountant. The same goes for the family lawyer. So the forum becomes a practical place and has a pragmatic process where they can bring up any issue and talk through it.”
The groups are held together by strict rules around confidentiality. You can speak freely, knowing it won’t be repeated outside the group. No minutes are taken. The issues discussed cannot be disclosed to anyone, anywhere, ever. Not even to a spouse.
“I’m proud that in all my groups, over all those years, and many hundreds of hours, we’ve never had one issue around confidentiality breaches,’’ Low says. “Everyone has honoured that space so beautifully. Everyone knows that if anyone breaks that it’s over for the group because it undermines everything.”
Prospective members are given the names of everyone in the group. Of course, there’s no way anyone can talk about their financials if there’s a customer, a supplier or even someone they know there so the groups are carefully selected to avoid conflicts of interest. One member even knocked back membership in one group because the mother of a person in that group played bridge with his mother. He had to find another group. Sometimes, it can take four or five months to place a prospective member.
Of course, the forums are not there to solve problems. But it provides a valuable space for family business owners to talk about them, and try to resolve them. It’s the kind of space they wouldn’t find anywhere else. As family businesses continue to grow, we can expect to see many more forums.