Breaking Barriers: Building Better Family Businesses | Sara B. Stern | Ep 121

Sara B. Stern  00:00

A lot of advisors tell family business owners to keep their spouses out of it. Don’t share the bylaws or the governance, you know, pieces of the business, don’t share the financials just keep, you know, family separate from business. And unfortunately, that leaves the spouses in the situation where, sadly, the only thing that we hear is when things are so bad that the family business owner comes home and complaints about something. So they’re very insulated, typically from the good side of the business. And they have a front row seat to the dark side or the hard side. And that’s especially hard then for spouses who are the parents of next generation owners. And if they lack insight, or they’ve been kept separate from the business, they’ll want to push for things like making sure that all the kids work in the business, making sure that all the kids make the same amount of money, you’re at the same level of responsibility. And it ends it ends up being incredibly dysfunctional for the family business. And they don’t even realize that what they’re pushing for is not good for the business, good for the family, because they’re really coming from a place of, you know, loving their spouse and loving their kids.

Debra Chantry-Taylor  01:17

Good morning, and welcome to another episode of Better Business better life. Today, I am joined by what I like to call my US twin. So Sarah, be stern, we had a bit of a joke the other day that if we had grown up in the same country would have been the naughty girls at the front of the class, who were always asking all the questions, and just disrupting everything, but we would be having fun with it. So hey, welcome. Great to have you back again, Sarah.

Sara B. Stern  01:40

So great to be here. Thanks for having me.

Debra Chantry-Taylor  01:42

That’s okay. Now those of you who don’t know, Sarah, B. Stern, is actually a very well recognized family business advisor over in the US, she does a lot of work with many, many family businesses, and not only with the owners of the family business, but also with their spouses, which we’ll talk a bit more about today. So, Sara, Tara, give us a little bit of an introduction. Tell us what you’ve been up to. Since last time you were on the show.

Sara B. Stern  02:03

Well, thank you so so much for having me. I since the last time I was here, I released my second book. And it’s for the people who are married to family business owners for those spouses. And I have to admit, I didn’t plan to write this book. But I realized there’s nothing else that I could find on the planet, for people are married to the owners of family businesses, and there’s a huge need. And so I was really excited to put this it’s really a handbook. I call it a handbook for spouses of family business owners.

Debra Chantry-Taylor  02:35

Yeah, because your first book I, I use it a lot with my clients over here in New Zealand. It’s a it is a handbook more than a book, right? It’s, it’s really designed to get you thinking and to start to do exercises. It’s it’s not just about reading the theory and the academia behind it, but actually getting your hands dirty and answering those questions. And the new book is similar, right, but it is written specifically with the spouse in mind.

Sara B. Stern  02:56

Yes, it is very similar. I jokingly said once that what I really do is I make adult coloring books because there’s lots of whitespace, there’s place to write. So same idea here with this one is the first is it’s meant to be picked up written in dog eared pages, the whole nine yards and really to help people make decisions and start conversations.

Debra Chantry-Taylor  03:19

Perfect. So we’ve talked a little bit about family business in the past. And obviously you and I are a big fan of using the EOS models and framework to help those family businesses. What are the biggest challenges that spouses or family business face? Like? What what are the why? How is it different for them?

Sara B. Stern  03:34

Yeah, oh my gosh, I’m going to not give you the top 20 I’ll just try to leave it at two or three. But one of the big ones is, at least in the US. And I think this is true in a lot of other parts of the world. A lot of advisors tell family business owners to keep their spouses out of it, don’t share. The bylaws are the governance, you know, pieces of the business, don’t share the financials just keep, you know, family separate from business. And unfortunately, that leaves the spouses in the situation where sadly, the only thing that we hear is when things are so bad that the family business owner comes home and complaints about something. So they’re very insulated, typically from the good side of the business. And they have a front row seat to the dark side or the hard side. And that’s especially hard then for spouses who are the parents of next generation owners. And if they lack insight, or they’ve been kept separate from the business, they’ll want to push for things like making sure that all the kids work in the business making sure that all the kids make the same amount of money, you’re at the same level of responsibility and it ends it ends up being incredibly dysfunctional for the family business. And they don’t even realize that what they’re pushing for is not good for the business good for the family because they’re really coming from a place of you know, loving their spouse and loving their kids. Yeah.

Debra Chantry-Taylor  05:02

Okay. And so, yeah, I can see how that can create some really major issues in the family business. So what do you, what do you advocate for? How do you say that they should get involved?

Sara B. Stern  05:13

Yeah, I start with this idea. And we got to talk about this before, of the three circle model that came out of Harvard, the three circle model of family business, and helping spouses understand that there’s the three circles, there’s the family, there’s the business, and there’s ownership. And that I mean, especially helping spouses understand that the definition of fairness in each of those three circles is different. Often in the family, the idea of fair is equal, everybody gets the same dollar amount or a similar type of gift. But that fair inside of the business is shouldn’t be that it should be more like you are qualified for the job and you’re paid, you know, the market rate for the job, for example, that’s what fair should look like in the business.

Debra Chantry-Taylor  05:59

Absolutely. And then of course, you’ve got the ownership thing as well. So I mean, it’s really important that you actually understand each of those and how they fit together. And, and there’s ways to make sure that your family is well looked after. It doesn’t have to be through the business, does it?

Sara B. Stern  06:13

Yes. And that’s so important. I, I like to help spouses understand too. Each of those three circles should have its own leader and its own set of decisions. And how you take care of the next generation is really a family circle decision. It’s not a business circle decision. And so many family businesses just put those three circles in one and say, well, if we’re going to take care of the family, they all need to have a job, or they all need to have ownership and they need to get a check every two weeks or every quarter. And sadly, that’s really hard and dysfunctional for most families.

Debra Chantry-Taylor  06:47

Yeah. And not only affects the family, but it affects particulars. We’re working with the business most of the time, it affects the business as well, if they’re seeing that sort of stuff go on in the business, don’t they? Because I know you you did a series on LinkedIn, which had me an absolute stitches, where you, you talked about some of the things that you know how, how not to run a family business, if you like. And it was things like, you know, letting your auntie Mabel, do the job just because she’s your auntie and things that we we kind of see. But we often we don’t call out because it’s perhaps it’s just become the norm. Yeah,

Sara B. Stern  07:18

oh, my gosh, I do. I actually just said this a couple hours that I ago that I think my next book needs to be how to fail in your family business. Because people love that. And I have to give credit where credit’s due, Alex or Mozi wrote a bunch of Twitter tweets, that’s the word about how to stay poor. And I took that, and it inspired me to write this how to fail in your family business. And it’s so true, right? We just assume people just assume, you know, keep your auntie, you know, you wouldn’t want to be mean to that person. You wouldn’t want to make them feel uncomfortable. But sadly, what’s happening is you’re making everybody else around them feel uncomfortable. And usually that Auntie Mabel knows they’re not good at their job. And so they are uncomfortable anyway.

Debra Chantry-Taylor  08:05

Yeah. So it’s actually you have the conversation, and you sort of work out whether there is a role because there may, there may be another role in the business that potentially Auntie Mabel is good at doing. But she has to really get it one to have capacity to do it. Or it might be that actually, she, she might prefer to go off and do something completely different, and not actually be involved in the business. But it’s a tough conversation to have, isn’t it?

Sara B. Stern  08:27

Yes, it’s so hard. And I just heard this great speaker at the EOS conference. And she was saying that her dad gave her this advice that everything’s hard, right, it’s hard to keep this person who doesn’t get the job, want the job and have the capacity, it’s also hard to have the conversation, pick the hard thing that moves you forward in a more positive way. And I was so inspired by that. It’s just so true, especially in family business.

Debra Chantry-Taylor  08:51

And I think it goes back to the old adage of short term pain, long term gain, because in the long term, using our example, Auntie Mabel will be happier, the business will be happier. And in actual fact, potentially, it means the business can run much, much more effectively, much more sustainably, much more profitably. And then actually the whole family benefits anyway. So yeah. Okay, so I’ve been very fortunate to a couple of your courses just recently, which have been absolutely fabulous. He did a lot of work with the businesses but also with business advisors to help equip them for for looking after family businesses. What What is it important to know if you are a family business advisor?

Sara B. Stern  09:28

Oh, thank you for asking that question. In my opinion, there’s a couple of really important things. Number one is, especially in a second or third or fourth generation family business, especially in smaller communities. The people leading the businesses have suffered in many situations under never having someone tell them they do something wrong. You know, especially and I say especially in smaller communities, you know, so a kid might grow up and their grandfather grandmother’s name is As on the library or whatnot, and even as a young kid, everybody kind of treats them really carefully. So even as a little kid, maybe their teachers or their coaches eat, don’t even tell them, you did it wrong, your opinions not good. I disagree with you. And so as an advisor to family businesses, I think it’s really important to be brave, to be courageous, and to give family business owners the gift of pointing out where they’re making mistakes, of sharing your expertise and keeping them from going in dysfunctional or scary directions. Most family business owners I’ve met in my life, appreciate it so much. And it’s so rare that someone’s truly honest and truly clear when they think that owner is going in a wrong direction. That’s number one.

Debra Chantry-Taylor  10:48

Yeah. And actually, I was thinking about this another stock, not just in family businesses, but in all businesses. Often we ask people like our lawyers and our accountants to be part of our advisory board. But really, they’re a service provider, which means they’re probably not going to have the tough conversations because they’re relying on you for a paycheck at the end of the day. So. So I think, as a family business advisor, we have given the permission to actually have those more difficult conversations and to point those things out. Whereas your lawyer or your accountant probably isn’t going to do that.

Sara B. Stern  11:18

Yes. And I boy, in my heart of hearts, I wish more lawyers and accountants felt that they could do it and would even start the relationship by saying, if you work for me, I’m going to say the hard truths. But absolutely, if if those folks can’t do it for any other advisor, helping with succession, conflict, EOS implementation, any other sort of system implementation, you know, while we do rely on the paycheck to do it, I think we’re so much more valuable. And we’ve earned the paycheck when we say the hard things, when we point out the difficult things and help them move into a better hard place than the current hard place they’re in.

Debra Chantry-Taylor  11:54

And when we often do have plenty of danger, I don’t know if you’ve ever seen but I actually have cuddly toys in my session room. And one of them is actually a sacred cow. And the other day, I actually found myself holding the sacred cow. And I sort of said, Look, you can’t attack me because I’ve got the sacred cow in my hands. But I don’t need to bring something up. And it was, I think those you know, that’s what gives us a little bit of fun to it. But also it gives us the permission to have those difficult conversations by hiding behind a fluffy cow, if that works for you.

Sara B. Stern  12:24

I think it’s genius. It’s so genius. I’m, I’m sure you have people say this to you, too. People say to me, Oh, you work with family business, you must like drama or, or you must like, you know, tears or whatever. And I think I feel like I work with the most courageous people, the most passionate people on the planet. And I actually don’t see that much drama, because people mostly will do the brave thing, even if it means they have to hold the fluffy cow or the fluffy elephant or whatever. In order to do it. They do it. And it’s incredible.

Debra Chantry-Taylor  12:54

Yeah, absolutely. Okay, so that’s the first kind of tip that you’d have them what what else would you say to people who are working with only businesses? Yes.

Sara B. Stern  13:01

So that’s absolutely the first one. The second one is to always keep that three circle model of family business in your mind as an advisor, and help that family business owner or next generation owner or spouse to really understand is the right circle making the decision here. A lot of businesses fail to make the business decisions, they let the family do it, or vice versa. That is really huge, I think. Yeah.

Debra Chantry-Taylor  13:27

And of course, this this podcast is really aimed more at the businesses themselves. And it’s, it’s for those little for those three circles for a little bit just to give them a bit of a sense what we’re talking about. So we’ve got the Family Circle. First and foremost, tell us a bit about the family circle. What does that look like? What does that mean?

Sara B. Stern  13:42

Yeah, so I actually I’d like to go in a little different direction, you can pull me back if you want. But if you think about the family, the business, the ownership, the family circle, the business circle, and the ownership should all have leaders. So the business should have you know, in the Eos world of visionary and integrator, lots of other businesses might call it, you know, the managing director, Executive Director, President, CEO, or whatever. A common term in the US is the Chief Executive Officer, the CEO. The family circle also needs to have a leader. And there’s some research and literature in the family business world that calls that leader of the Family Circle. They also call that role the CEO, but it’s the chief emotional officer. And I think it’s super clever, right? And somebody laughed once and they said, Oh, yeah, we’ve got a chief emotional officers like No, it’s not the chief emotional officer. It’s the chief emotion officer meaning or, you know, the not chief, you know, being emotional, but it’s that person leading the family. It’s often that matriarch or patriarch who’s making sure everybody gets together, who sometimes is saying, you know, quit fighting, cut it out, you know, get your heads on straight, but they’re really the On Off and who holds the family history and the family traditions, and make sure that that that perpetuates over generations. So that’s hugely important in that family circle. Other things is for on the family side is having family meetings that aren’t about owning the business and aren’t about running the business, but their family meetings that are about the family’s assets, whether it’s money, property, family heirlooms, that kind of thing. You know, it’s important. And then also family meetings are about talking about traditions, conflicts, discussions, how do we take care of the next generation? How do we educate the next generation? That’s just huge. And then, of course, the business has the business conversations, they need to have an ownership and it might be very similar people in each of those meetings. It probably will be in a family business, very similar people. But you’ve got to get the right folks in the right meetings, and make

Debra Chantry-Taylor  15:58

sure you’re wearing the right hat. Right. So in this particular meeting, this is my role in this other meeting. This is my role. Yes. Yes. Yes. Yes.

Sara B. Stern  16:07

Your brother and sister and the other one, you might be running the business? Yes. And the other one here, the owners making a decision about if you buy something or sell something?

Debra Chantry-Taylor  16:16

That’s a really good example. Perfect. Okay. So that was Tip number two, I think that we’re talking about what about? Yeah, keep that in mind all the time. Because I think you said I think they get very mixed up very easily. Or actually, some people don’t even realize that you exist, or that there is a role for those three things. And I think, once you start to do that, and can be really clear about the hats that you’re wearing, and which meeting you’re in, it just gives some real clarity around how we deal with it.

Sara B. Stern  16:42

Yes, and that’s, I mean, connected to that three circle are two tips that I like to give advisors that can be helpful. One is to literally teach your clients to put on pretend hats and say, who’s talking to whom in the room, whether you’re an attorney, or a CPA, or a family business adviser who’s helping a family business through conflict or succession, to take a moment and say, Who is in this room who’s talking to whom right now. So that’s one tip connected to that three circle model. The other one connected to that is I always advise and I always suggest to advisors that they advise their family businesses, to literally think of that three circle model as three separate tables, and the importance of sitting around each of those tables on a regular basis. You know, one might be a family dinner, right? That’s one table just getting together and having fun. Another is a leadership team meeting strategically making decisions about the business and who works there. And the third, is that ownership table, and why do we own this business? And do do we want it to grow? Are we willing to invest in it? How much money do we need out of it, having those conversations and doing that on a regular basis, even when things feel like they’re really smooth and going? Well, it’s still important to sit around those three different tables on a regular basis.

Debra Chantry-Taylor  18:06

And I suppose it’s a little bit like the level 10 meetings that we use in EOS. You know, I have some clients that say to me, oh, you know, we have to go for 90 minutes, don’t worry, it’s like, well, no, you should definitely have them regularly. If you happen to finish a little bit early, that’s fantastic, then you can go and do something more social or, or do work on your rocks. But it’s actually even, you’ve got just to have them on a regular basis, people know that they’re there. And if you happen to finish a bit early, then that’s great. There’s nothing wrong with it.

Sara B. Stern  18:30

But come to the table, you know, what I will often say to is, don’t go over. Yet trust that you can get the most important stuff done in the time that you have. Don’t just let it go on and on. Right, because unfortunately, that’ll happen to where they just go on and on and on. And it stops really being it might feel productive, but it’s not productive anymore.

Debra Chantry-Taylor  18:52

Yeah, no, that makes perfect sense. Hey, just go back to your hats, hats. Yeah, analogy. I used to I used to have a friend who was actually I met them through going out and trying to find an agency to work with an advertising agency, and I met this couple who run this advertising agency. And we became very, very good friends, which can be a little bit challenging at times. Because when you’re very, very good friends to somebody, and they’re providing services to you. I actually used to literally say, Hey, I’m now putting on my, my client hat. And I don’t you know, I’d much rather stick my head on a toilet than have this conversation. But I’ve got some challenges around what’s going on with my with my client hat on. And then I would you know, we’d have the conversation I’d say right now I’m taking my client had off. Now let’s go grab a glass of wine, and we can kind of be friends. But I had to, it was really important for me personally, because it actually gave me permission to go, Hey, I love you as a friend, as a family member, whatever it might be. But in this particular situation, this is the role that I am here for so I have to put this hat on.

Sara B. Stern  19:50

Oh my god, that’s so beautiful. I’ve shared that three circle model with so many people who say Oh, everybody needs this actually. Right. Everybody in the world everybody in business This needs this. And whatever the label of the three circles are, is kind of irrelevant. But I had this great. I got to observe a family business have this amazing conversation where they were trying to figure out who should be the leader of the sales team and the founder, Dad was done. He’d done it for almost 40 years, he was tired, it was time to find someone else to do it. And a next generation daughter was saying, I really think I could do this. And he was kind of trying to talk her out of it. She was starting to feel upset tears were kind of welling in her eyes. And finally, we stopped and said, Who’s talking to whom, and we realize dad was talking to colleague. And when we got dad to stop talking, and you know, the owner, and the sales leader to talk to his colleague, he had complete faith in her. But when the dad was talking, he was trying to protect her and her young family and her time, and it was really uncomfortable, mixed up feelings were getting hurt. And then once we got the right hats on, it was clear, it was healthy, just like you and your friends. Yeah, that’s, that’s

Debra Chantry-Taylor  21:07

fantastic. I love that. Yeah. I mean, I know I, my family, sadly, aren’t with us anymore. But I know that when they were around, I mean, we had a very complex relationship. We all loved each other dearly. But we, we were quite similar in many respects, as well. And so we’d have these things. And it’s right. Even though I was you know, in my early 50s, when my father passed away, he still treated me like a child much of the time we were actually together. And they just can’t help themselves, right. So it’s important to recognize that they’re just they’re doing what they think is absolutely best. It’s, it’s coming from a place of love. Yes, yes.

Sara B. Stern  21:39

Yes. Can I say one more tip for advisors? Yes, I should have said this first. I think there are times when it makes sense as an advisor to meet one on one with different family members. But I think that is those opportunities are few and far between. I think it’s so much healthier as an advisor when you get people in the room together, and they hear the words out of each other’s mouths. And you’re helping them learn to have those hard conversations, versus an advisor getting in the middle of that. And I see so many advisors just start out every engagement no matter what going and having these one on one conversations. And I think I know this is going to upset some people who hear this, but I just think it’s it’s actually quite, it encourages the dysfunction, instead of encouraging the hard, hard conversations and helping them learn to say these hard things to each other. Yeah,

Debra Chantry-Taylor  22:33

I mean, we have this with not only family businesses, but any business that I’m working with, as well, I always have to look, I’m completely available for you in between our sessions. But if they ring up and they’ve got some kind of issue with with a person with something’s gone in the business, I go, that’s great. Now, please take that to your next level 10 meeting, or if you’d like we can bring it up at the quarterly. But I’m not going to try and help you solve that. Because that’s actually a team issue to resolve not an individual. Yeah, yeah, why not have that conversation with somebody?

Sara B. Stern  23:01

Yeah, I same thing. I’m happy to listen, I’m happy to hear you out. But I’m always going to point you back to each other. I’m not here to fish for you. I’m here to teach you to fish.

Debra Chantry-Taylor  23:12

Absolutely. And it’s interesting. I’m back studying again, at university doing my next part of my family business accreditation fan of his advisor accreditation. And I think the best part is, in the beginning, it is worthwhile having a conversation about the family as a whole. And what what is the family history, what’s the family tree, getting a bit of sense of where the family has actually come from, because there’s a danger of kind of thinking that all families are the same. And they have the same kind of issues. But they may have come from, if you understand the family history and where they’ve come from, and how they’ve got to where they are, you can start to pick up on some of the things that might become issues in the future. So I think at the beginning, it’s nice to do that. Yeah.

Sara B. Stern  23:53

For first of all, I love that you’re doing this next part of your education, I bet it’s a blast. I don’t know how you find time to do all the things you do. So that is incredible. But I completely agree. And it’s Well, for one, it’s fascinating, of course for me as an advisor, but often for them, their eyes become wide open, and they notice these trends that happen generation after generation that they didn’t realize were happening. Just keep happening. So I think that’s super fascinating. And I think it’s really important for advisors to really help a family, family business, but help them understand on the family side. Why are we a family? What’s important about being a family? What are we about? What’s our identity? You know, kind of similar to the core values we talked about in EOS? What are your values as a family and then do the same thing on the ownership side too?

Debra Chantry-Taylor  24:48

Absolutely. Yeah, it makes perfect sense. Yeah. Okay, cool. So, we’re gonna go back into the spouse stuff now. So I want to find out more about so you have been you’ve obviously got the book, which as you said is a real hair Walker, an adult coloring book. I love that. And I know I highly recommend it. By the way, I actually, Sarah very kindly bought some to Dallas for me when we caught up in Dallas, I brought some home in my suitcase. And so if anybody wants to grab hold one of these books over here in New Zealand, they’re more than welcome to come and give me a yellow. I’ll drop one off to them. But the so you’ve got the handbook, but you’ve also developed another tool, haven’t you to help with this? Just by the way, the book is called married to the family business. Is it? Is that right? Yes. It’s

Sara B. Stern  25:29

called married to the family business, a handbook for spouses of family business owners. And thank you for offering to get the book to people. I really appreciate that.

Debra Chantry-Taylor  25:38

Oh, look, as I said to you, before we got on the podcast we had, we actually had the chairman of the family business association from New Zealand over in here doing a podcast of the day, we had such a great time talking about family business, but I actually gave him both of your books, and he was just blown away here. Because there isn’t the thing I love about them. You know, I always say that the brilliance is in the simplicity. And I have think I’ve read every single family business book there is out there. And often they are huge. They’re academic, they’re chunky, and you kind of go I don’t, I can’t even I can’t even find the time to read it myself. It’s like it’s so I can’t imagine a family business would but yours is just beautiful and simple. And he was the same as Oh, this is like really good. Because it’s such a simple tool to use, as opposed to a lot of it, which is based on academia.

Sara B. Stern  26:18

Yes, yes, I that. that frustrates me so much when books are thick and hard to read and have four syllable words, and I’m like nobody needs if they’re, if you can’t turn it into a contraction, what’s going on here? So I cannot understand that. But anyway. Yes, so I have created an online resource for the spouses of family business owners. And what I think is so fascinating is when I first started marketing it, people thought it was for the to the couple to participate in, yes. Which makes me think, Oh, I probably should build something for the couple. But this really is for that person who’s married to the family business owner. And it’s meant to help them really dig in and understand the three circle model, understand the role they’ve played in either helping the family business be healthy or not healthy. really help them understand the idea that a very common thing that happens in family businesses, is people create communication triangles. And a lot of the time they’ll go to the spouse and say, oh, you know, your spouse is so mean to me. Right? And then the spouse will go to that person say, Oh, you’re mean. And they’ll say, I’m not mean that person’s mean, right. And they get in between relationships. And so it talks about how to identify triangles, and how to get yourself out of them, because it’s really not healthy for the individual or anybody who’s involved. And then I give them some tools to identify that, and then really work through their own ways of thinking and understanding how they want to participate or not in the family business.

Debra Chantry-Taylor  27:55

Okay. And so as we said, it is a book that you work through, it asks you some questions, it gets you to think about getting paid, write the answers down there. But your online course I’m assuming it’s a little bit different. So the book Yeah, the book is about writing things down. The online course is a series of

Sara B. Stern  28:09

Yep. So I should say I was describing the online course there. So the book is a chance to write down think about it. The online course goes deeper into things, including the triangles, and how do you manage? How you’re thinking about this? And how do you actually change your own way of interacting? So the online course it’s five different sessions. And there’s actual actually several points in the sessions when I say, Okay, hit pause right now, please write down your thoughts. So it’s in many ways similar to the book and that there’s some learning and then writing and thinking, and then learning and writing and thinking and making some commitments to yourself. And it’s really designed to be something you come back to every 90 days to help you go deeper into your understanding. Yeah,

Debra Chantry-Taylor  28:55

so it’s a book on steroids in terms of it gives you fantastic, that’s what I should have called it. Brilliant. And I do find it fascinating because you I just saw your journey where you know, you launched it. And then you had all this feedback that people thought it was for couples and it really was for the spouse. So I think there might be something in there. I mean, I we only have a very, very small business at the moment. But I always wonder because my husband is not involved in the business. But I always wonder about, you know, I don’t think he quite fully understands what goes on and how do I get him more involved? There must be some a workshop there for couples, I’m sure.

Sara B. Stern  29:28

Apparently, there’s a desire for it. So yes, that’s right. Either you or I need to create this.

Debra Chantry-Taylor  29:34

Yeah. So I mean, I’m really interested with both you and I we love the family business. And I think it’s because I love I love the fact that we can actually help them get a better family life by helping them get a better business life and I think that’s what kind of drives me and motivates me. I always say that life is too short, you know, having lost all of my family and very short period of time. You know, I don’t want anybody to not spend the time good quality time with their family. I was very lucky to spend good quality time with my family. So what do you think the main differences are between a family business and just a normal privately owned business? Yeah.

Sara B. Stern  30:10

Well, on one side, I would say there often aren’t that many differences, because often a privately owned business will have maybe one other random family member in there. Right. But But, but I will say, when you’re looking at multi generational family businesses, I think the biggest thing is the horizon. You know, a family business, a family, a business that isn’t thinking about the next generation owning it might be thinking about, who are we selling it to? Are we going to close it? How much do we have to grow it to sell it for a better price, you know, have some of those different kinds of priorities. Whereas in a multi generational family business, they’re often thinking 3040 5060 100 years out about building the business for the family. And often they’re thinking about the community too. And for me, that’s what gets me so excited about working with family businesses. I know the numbers in the US that family businesses tend to have people work for them longer. Those owners give more generously to their communities. They invest in things like parks and art and schools and music, right? I know those statistics in the US, I’m guessing they’re pretty similar around the world. Yes, they really, really committed to their communities and their employees, because I believe their timeline is so far out, decades out, versus maybe 1215, maybe 20 years for other businesses who probably have a sale in mind.

Debra Chantry-Taylor  31:47

It is really interesting, actually. Because when you start looking at, you know, what are actually family business, some of the biggest brands around the world are actually family businesses. And here in New Zealand, I’ve been learning a lot more, you know, you’ve got the Barfoot and Thompson’s have been around forever in a day. It’s a big, they’re a big brand, but they’re actually a family business, too. And like you said, they support the community, they reinvest they are, you know, they really want to keep those things going. So it is interesting that we think, I don’t know, I think before I started working with family businesses about sort of 1516 years ago, I imagined it was just small business, you know, because a family business. Actually, when you look at it, there are companies that have been around, as you said, for for hundreds of years that have handed it through. What happens though so many, not every family member or not every family has somebody in the family who can take over the business. And maybe you don’t want to get rid of it. Because you know, just because you haven’t got a son or a daughter or an uncle and auntie or a cousin who can step into your role. What do you do if you want to still keep the family business but want to remove yourself from the day to day of that family business?

Sara B. Stern  32:50

My gosh, Deborah, it’s such a good question. And one that I think a lot of family business leaders and owners get surprised by, they just assume if I own it, I’ve got to run it. I must not only work in it, but I have to lead it, you know, and I have had the chance over the last dozen years to meet several family business owners who don’t even work in the business. I got to meet one family business owner who what his job is because it’s his favorite thing to do is mow the lawn loves mowing the lawn, they have several locations, and he’s mowing the lawn all the time all summer long. He does not he doesn’t run the place. He has a boss. That’s it. So it really works well. And there are plenty of family businesses that have owners who don’t work in the business are never going to work in the business or owners who aren’t running it. They’re doing payroll or mowing the lawn No. And I think it’s a beautiful model to think of we can own this asset and let somebody who’s uniquely skilled run it.

Debra Chantry-Taylor  34:01

I had the example with a family business the other day, a little while ago, a couple months ago where the father who was the founder of the business felt like he did have to be the leader. He had to be the person driving it all. And as we work through the ers process, there was this kind of lightbulb moment about six months in where he kind of went, you know what, I don’t think I want to be the visionary and it’s like, oh, okay, so tell me what do you want to do as I want to do research and development stuff? That’s all I want to do? is fantastic. Okay, now we know what you love what you’re great at. And I think it actually made him realize that he didn’t, you know, when you start to define what all these accountabilities are and what’s available. He was going well actually, I don’t think I want all of that. I just wanted this very specific thing here. And it was I mean, I just made my heart sing cuz it’s like wow, here he is like he’s been committed to doing all this stuff when in actual fact, all he really wants to do I think it’s similar to mowing the lawn maybe not quite but it’s that was what he wanted to do. It’s perfect. You don’t you do not have to run the business.

Sara B. Stern  34:57

Don’t have to run it. You don’t have to even worry work there, you don’t have to. It’s just so amazing when I, when I’ve seen people go through what you got to witness, recently, there’s so much freedom, they get lighter, like, Oh, I could just do what I’m suited for and let someone else run it is so healthy. And sadly, I think it’s actually quite uncommon. But I want it to be more and more common. I mean, why? Why? Just because your great grandmother wanted to start a business, would you want to be in the same industry? Like why there’s no reason that should happen? You know, so it happens in some businesses. But sadly, I think there’s a lot of next generation family business owners who suffer with things like, you know, drug abuse and chemical abuse, because they feel trapped by the business. And it’s very sad. They don’t have to be

Debra Chantry-Taylor  35:50

that subsidy, right? I chose. There’s another family businesses here in New Zealand that I’ve seen where it wasn’t actually don’t you know, the sons and the daughters actually wanted to take it over actually not being a cousin. And so as I guess, as your family gets bigger, you’ve been around for a lot longer, you do have more options. But like you said, I mean, if I’d followed my father, I’d be in it sales if I’d follow a mother and be a travel agent, and neither of those things, but it really appealed to me. But that’s what your business is saying. Right? As well, you should come and do what I’ve been doing, because that’s what I wanted to do. You know, you look like that. It’s just a bit silly, really, isn’t it?

Sara B. Stern  36:22

It’s absolutely ridiculous. Like, why would that even happen? And it certainly does. And of course, we’re you know, some people grew up with fond memories of the business as the only thing they can imagine doing right. But, but I don’t know why we would think that the next generation would just be really excited about the industry we happen to be excited about. Yeah, that’s true.

Debra Chantry-Taylor  36:42

And I think that’s what I really love about Eos, I think that it actually does give it gives that framework, it gives the opportunity to actually question things that maybe have never been questioned before. You know, you can actually go through the whole process and kind of go, Okay, this is a structure we’re looking at that we need to run this business. Do I really want a part in this? Or what part do I want to play in it? And often, they’ve just naturally assumed this is what’s going to happen. Now you’re giving them a chance to go, oh, actually, I wouldn’t mind doing this or, or actually, I wouldn’t mind not being in the business. That’s an option, too.

Sara B. Stern  37:13

I love reminding people that when Gino Wickman created Eos, the seeds were planted when he was working with his own dad, in the family business, and they sold that business. I just love reminding people. I mean, some people are like, Oh, he sold it. But you know, he was working with his dad, when he started creating these I can only imagine he had family business in mind as he created this tool. And I’m never going to ask him because I don’t want to find out he didn’t. So I don’t

Debra Chantry-Taylor  37:42

know, I find really fast, I guess I mean, I’ve always had the pleasure of meeting Gino in person at that the conference this year. But he’s obviously been the visionary for a long, long time with EOS before he and now we’ve gone on to our third visionary, a family business. He was the integrator. So it’s interesting too, that you know, his dad was a visionary. He was the integrator I think in different businesses and the different requirements, you actually may end up wearing different hats. I’m embracing my vision Rhenus. These days, I’ve been an integrator for other people for most of my life. So you know, GM roles are very much about managing the business and the minut detail on the people. I did that for many, many years. But in my own business, I’ve realized reading rocket fuel again, it’s like, Oh, my goodness, I am a typical, typical visionary.

Sara B. Stern  38:25

And I think you’re really onto something with that. I’ve seen a lot of people be an integrator because they thought they should or they just happen to be good at it when they were young. And they just kept doing it or whatever, right. I’ve actually seen family businesses too, with this idea that the only way you can ever be the visionary is if you work your way up from let’s say, you know, doing stuff to be on the leadership team to being the integrator to being the visionary. And it does not work that way. Thank goodness This was had this was in November, I was with a family business. And they had been working for three years on getting the next generation leader prepared to be the integrator and they finally realized, oh, my gosh, she has all the vision to be a visionary. They can hire an integrator. She doesn’t have to spend a decade in that integrator seat and then be a visionary. It changed everything. Everything changed when they realize that.

Debra Chantry-Taylor  39:21

Yeah, it’s also really funny because I think I’ve always sort of wondered, not what I love EOS. I know what EOS does. But I always wonder what other people saw when I actually presented it and what they sort of took out of it. And I’ve been presenting to a couple of my colleagues who are leadership coaches and working with businesses and one of them actually said to me, he thought the thing that was most unique about EOS for him was the fact that he was a visionary role. The fact that there is a visionary and an integrator gives permission for people who are founders to remove themselves from the day to day running of the business, and actually take on a role that really adds huge value to the business but doesn’t need to be involved in and I think in a lot of traditional structures or opera writing systems? It is it’s about hierarchy like to do you have to work your way up. And before you get, actually, this is about here’s a box. And if that is your unique ability, and that’s what your God given talent is, then, you know, get into that box and start doing that stuff.

Sara B. Stern  40:13

Yes, yes, it’s so freeing. I, I recently was talking with a family business. And they tried to put these two brothers in the visionary seat because they thought, well, that’s the only fair thing to do. Luckily, they stopped doing that. One of them was just uniquely skilled to come up with wild and crazy ideas and see the future of their industry and make connections, the other ones a genius project manager. And that’s what they do. Now, once the visionary ones a project manager, they have a non family member as the integrator, it works. But when they both felt like they had to share this, like job of being the top boss, it wasn’t even visionary stuff. It was just hierarchy, which is not the point. So

Debra Chantry-Taylor  40:56

yeah, actually, that’s my last question for you brought something else to mind. So, you know, often in families, there is an expectation that yes, let’s say two siblings should be paid the same amount and should do an equal role in the business. But that’s not always the right thing to do. Right? So how do you work through getting people into their right position? So they’re actually doing the stuff that they love and really enjoy what they’re doing? But that you can’t that they can be looked after? If you like by the family? There’s ways to remunerate without having to do it through the business, isn’t that? Oh, gosh,

Sara B. Stern  41:27

yes. And this is really something that’s important, I think, for the spouses that I work with, is because it’s often they’re, they’re the ones motivating that idea that they should have an equal role and get paid an equal amount for certainly in the business. And actually, here’s a funny thing. I believe what I’m quoting here is research that was done in North America. So this is not global numbers. But what research found is most family businesses underpay their family members, even though there’s this like, concept that you know, you work for your dad, you’re making too much money, it’s actually research says they get underpaid. But anyway, so I like to say just pay your people market rate, it’s the easier way just pay him the market rate. I don’t care if there’s $70,000 difference between your kids or 100 or a million, pay them a market rate. But please, when it comes to, if you’re paying for weddings, or cars or giving gifts at holidays, or birthdays, make that equal, right, make that equal, don’t and then you know if one of your kids makes $10,000 a year and the other one makes 100. Please don’t give one kid and $90,000 gift and the other one nothing like Please no. Fair’s fair, fair is equal in the family. Fair is market rate in the business, and then ownership that can be equal or not, you’ve got to get really clear about what is your philosophy about ownership and some family businesses do say, you can’t have ownership unless you’re running it? Well, okay, if that’s the case, or others say we don’t care what your job is, we don’t even care if you work there. You’re going to be equal owners. That’s up to you the philosophy of ownership, but man make the family side fair as equal make the business side fair as what your kid could make somewhere else.

Debra Chantry-Taylor  43:18

Market, right? Absolutely. And that’s a difference between I mean, we in a traditional kind of non family thing. It’s governance versus operation. Right. You know, you may well be a shareholder, and you may even be a director, but your role in the business of it is that of a lawn mower, then you’re gonna get paid the right that guy gets paid.

Sara B. Stern  43:38

Yeah, yeah. I don’t get paid appropriately for that job.

Debra Chantry-Taylor  43:41

Yeah, yeah. Yeah. Hey, look, we could talk all day, but we unfortunately don’t have all day. I’m going to ask you before we finish up, you know, where can people find this really great information. So I know both of your books. So the first one is called staff here.

Sara B. Stern  43:56

Yes. Start here to guide your family business succession. Yes. That can be found on Amazon or with you. Yes, the second one is called married to the family business. And that’s a handbook for spouses of family business owners. I’m also on Amazon or with you. And then though the workshop that I created for spouses can be found at healthy family business.com Believe it or not, nobody bought healthy family business.com before me, it was just you know, cheapest could be so the there’s another fun thing at that website, I made a very short assessment that they that a family business owner or leader can take to identify where they’re really healthy and where they’re not. So that’s there on that website. Wonderful

Debra Chantry-Taylor  44:41

sites. That’s healthy family business.com. You can find your books on Amazon and of course, Sarah Beeston on LinkedIn if it wants to talk to you as well. Hey, Sarah, thank you so much. Again, I always enjoy talking to you and can’t wait to see you. Again in person. Hopefully not too far away.

Sara B. Stern  44:57

Yes. Thank you so much for having me and I I really look forward to making trouble with you in person soon yes sounds good thank you.