In a recent Club E event at the Minneapolis Club, Rick Brimacomb hosted a panel discussion featuring Jon Keimig, Director of the Family Business Center at St. Thomas; Tom Hubler, family business consultant and author; and Rick Wall, CEO and Chairman of Highland Bank. Together, they explored the unique challenges, opportunities, and strategies for thriving in family businesses.
Balancing Family and Business Systems
Tom Hubler introduced the foundational concept of balancing the “family circle” and the “business circle.” These two systems often overlap in family businesses, creating potential for tension. Hubler emphasized that successful family businesses embrace structure and formality to create harmony between the two. He noted, “It’s because you love each other that you need structure and formality.”
Rick Wall shared his own experience at Highland Bank, explaining how implementing governance early helped his family navigate the complexities of running a family-owned bank. Wall highlighted the importance of professional advisors in facilitating these structures, especially during generational transitions.
Emotional Equity and Shared Vision
The discussion highlighted the importance of fostering emotional equity within families. “Families that succeed long-term invest in emotional equity while building financial equity,” Hubler explained.
Jon Keimig stressed the value of creating a shared vision. He recommended families define their goals collaboratively by considering their unique history, values, and long-term aspirations. “It’s not just about the vision,” Keimig noted. “It’s about the process of coming together to define what success means to each person.”
Managing Conflict
Conflict is inevitable in family businesses, but it doesn’t have to be destructive. The panel provided actionable strategies for addressing disputes:
Active listening: Understand the root cause of disagreements rather than focusing on surface-level issues.
Forgiveness: Hubler shared that families willing to forgive can move forward stronger.
Third-party advisors: Keimig underscored the importance of skilled advisors to navigate complex family dynamics.
Hubler introduced his “Managing from the Heart” framework, which includes hearing and understanding one another, acknowledging differences, and communicating with compassion.
Transitioning Leadership and Professional Management
As family businesses grow, transitioning leadership becomes a critical challenge. Rick Wall shared insights from his experience, noting that early planning and governance structures can smooth the path for the next generation. The panel also discussed the value of bringing in professional management, particularly when younger family members are not yet ready to lead.
Keimig highlighted that ownership and leadership do not always need to overlap. “Professional management can bridge the gap, allowing family members to focus on long-term ownership and strategy,” he said.
Dispelling Family Business Myths
The panel also tackled common misconceptions about family businesses. Keimig debunked the widely cited “shirtsleeves to shirtsleeves in three generations” myth, explaining that this narrative lacks a solid foundation. He emphasized that family businesses often outlast non-family businesses due to their long-term focus and commitment.
Key Takeaways for Family Businesses
Governance is essential: Establish clear roles and processes for decision-making early on.
Invest in emotional equity: Strengthen family bonds through appreciation and recognition.
Create a shared vision: Collaborate on defining goals and values for the future.
Address conflict proactively: Use skilled advisors and structured communication to navigate disputes.
Plan for transitions: Prepare the next generation for ownership and leadership roles.
This Club E event underscored that while family businesses face unique challenges, they also hold unparalleled potential for success. By fostering communication, building strong governance, and investing in emotional equity, families can create businesses that thrive across generations.
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