Janna Hoiberg - How to Be in Business With People You Love (Without Hating Them)

You're listening to Exitcoachradio.com, the show for age 50 plus business owners. We're interviewing over 250 professional advisors for their tips, ideas, and precautions so you can be well planned. We upload new 20 minute interviews and 1 minute highlights every day at exitcoachradio.com. Come listen for a minute. Welcome to the Exit Coach radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors. Their best tips, strategies, and precautions so you can be well planned. And don't miss our one minute exit coach tip of the day on exitcoachradio.com. And now here's your host, the exit coach Bill Black. Welcome everyone. Thanks for listening. Nice to have you on the show today. Our first guest is Jenna Heiberg, and Jana is with Harvest Business Coaching from Colorado Springs, Colorado, and Jenna is going to talk with, uh, she's been with us before. Jana is gonna talk to us about family businesses and how to be in business with people you love without hating them, and that, you know, you think about that title, how to be in business with, you know, with people you love without hating them. Yeah, we all see people in family businesses and you see the strain sometimes that comes through in these relationships, and it's really something that you have to learn how to deal with, how to take your, your father son hat off and put on the president and vice president hat sometimes. So we're going to deal with this and get. Depth with this now Jana's been with us before, as I said, so you can find her past show at Exaoachradio.com. We have our indexed audio library there where you can go in and type in Hoiberg, H O I B E R G and find her past show. So I'm looking forward to digging in with it. Jenna, welcome to the show. Well, it's great to be back. Thank you for the invitation. Well, you know, it was such an interesting topic, and we got a lot of comments about it because a lot of our listeners are family businesses, and you know it intrigued them. Nobody, nobody likes the titles that sometimes that we put. There, but you know it's they have to deal with these types of issues. So I'm glad you could join us again. And if you would just give our listeners a little bit of background about Harvest Business coaching. Of course they can go back and listen to your past interview and get more in depth information, but tell us about you and Harvest Business coaching. Well, after running small businesses and small is always a relative word as to what you define as small, but running businesses for about 30 years, I got the opportunity to leave a corporate environment and get take some of those experiences and apply them. The more work I did with a lot of my clients, probably 80% of them were family businesses. And the more I did that and I played into the family business that I've been, my parents had been involved with, it just really came from there and I work with all different sizes from the small ones to the much larger that are trying to pass to the 3rd and 4th and 5th generation, and it's just, it's a fascinating business and I love being able to help with things that they know but they just sometimes need to be held accountable to do what they know. Yeah, that's a good point. So these are things that they know they should, they should leave their relationship status at home and, you know, be, be, you know, at work in those work modes, but things things carry over and there's not much they can do sometimes about that, right? It's just, it's just life. It's just what happens. And so And so a family business could be a father with his children dabbling in it, or maybe the spouses work together or maybe there's even a couple different families working in it. It could be anything from just one individual and one child working in a business and on up. They all are going to have similar types of issues, right? Absolutely. I mean there's a family business that I knew that with multiple generations with father, mother, aunts, uncles, cousins, brothers, sisters all in the business, and that is a different the dynamic actually is sometimes very interesting to those who aren't family members to try and understand how to best get ahead, how to manage within the business, how to what not to say and what to say to various family members. So there's a dynamic there that is just absolutely fascinating and That's why I love it. Yeah, yeah, it is, it is fascinating and it's just a part of life that just these relationships carry over. So you know there's a couple different situations I can think of one where the kids are just kind of dabbling part time, but let's talk about further down the road when it's established that the family business is going to become a legacy business, and that means it's going to try to perpetuate itself to the next generation or maybe even a third generation. And the dynamics that come into play because now we're not talking so much about just running a business day to day, but we're talking about how to transfer the leadership of that business and that means that there's going to have to be a relinquishment of control to someone that they might not even drive, they might not even let drive the nice car. Right, that, that's, that's exactly right. Well, it's, it's, it's in part the going to the next generation, but one of the first steps before you even decide to do that. Does the next generation really have a passion? Do they really want to be in this business? There's one business that I work with that I believe there's 5 kids in the family. Only 1 of them wanted anything to do with the family business. So the other 4 are off doing, they don't even live in the same town. They live in different parts of the country doing very different things that they're passionate about. What this business owner did that was great and we're passing from the 4th to the 5th generation in this case is they laid out, OK, here's the child that wants to do it. We're going to figure out how to make it fair to everybody else because it's still an inheritance and that's where a lot of times, especially in the passing, there becomes conflict is we talk about that money thing. And if Green was have envy for a reason because that's that's where the tussles end up being is, well, is he gonna get more money than I am. Mhm. That's a great point. Everybody, everybody has a conflicting desire or need from that business. The child that's working in the business wants to grow it and really may want to sell it down the road, but they really want to focus on growing and others just might just want their distributions as they happen, right? That's exactly right. Or there is a glamour out there and all of us business owners are chuckling at this point in time about how rich business owners are and how much fun it is to run a business and how stress-free it is, right? For those who've never run a business, isn't that what you often get? Oh, that must be so great to run a business and you just sort of put your head down on the table and go, at times it is, but at times it's not. But the family, the rest of the, the kids go, oh, he's just having so much or she's having so much fun running this business and the Monday night quarterback on what should be done and shouldn't, and that's where a lot of the emotion plays into, especially passing from one generation to another, which is where your question was coming from. So yeah, they don't realize what it's really like under the surface, and it might look all great on the surface, and they probably would never realize what it took to get there in the first place. I mean, you know, probably a lot of sleepless nights and and stretched credit cards maybe and near, you know, near misses and all kinds of things that might have happened along the way. So they don't have that appreciation. So, so those are some of the challenges, but in, in this, in this situation where family businesses want to create a next generation of leaders out of, out of this group, what are some of the challenges they face? Well, leadership, I do a lot of speaking on the whole concept of leadership, and there's a lot of misnomers about what real leadership is, and everybody wants leadership, but they haven't necessarily gone and defined what it is, and you can get a whole bunch of leadership definitions just by going on the internet, but my question is what are you looking for in leadership and what are you looking for for each of the members because If you've got, let's just take it simply, you've got 2 kids in the family, they both want to be involved. 98% of any parent that I have ever talked to has said that each one of their kids has very different personalities, very different skills, and very different ways of contributing. Leadership from the current generation is figuring out where the next generation can fit in that leadership. One of them might be outgoing and very good with customers and sales. And the next one might be much better on strategic planning or financing. It's really figuring out how that they're going to be able to fit together, how they can work together, and going back to something we talked about in the last interview, what are the roles and responsibilities that each of those kids are going to have so they can develop the leadership in those areas to move it forward and So really taking some kind of an assessment tool or a process and really defining the kind of the strengths and weaknesses of each of these potential new leaders and figuring out where they need to work on or or do they, I mean, here's one question is, does it make sense for a business owner to nominate. More than one successor leader in their business, or is it just a nightmare for disaster? So, um, uh, what is a camel? Camel was created by a committee, right? It was a hor was that the same the horse created by a committee, OK, so to have more than one person in charge of something is really in inviting conflict unless. And I've seen this done right once and all the clients I've dealt with, and this wasn't actually a family, but they two people had 50/50 ownership in a business which I never suggest because it's I've seen far more ways of it going wrong, but what they did is it what they did is one of them. That had 50% was named president and they had final say on all these things. The other one was named head of operations or director of vice president of operations. I don't remember the title, and they had control over everything. But if it came to a tied vote where he thought one. And she thought another because it was a male female because he was president, he got the 51% vote when it came to that. So it was very structured, but very seldom is that how it ends up being structured. And so you get this tussle. And if none of you have gone and looked up, I'm spent many years in New England, so I've been following the whole market basket family business. A fiasco, Harvard Business case study, you know, that's going to be done in the future. That is a family business, the conflict and the structure really not didn't get done well and it about destroyed probably close to a billion dollar company and it's a fascinating story. We don't have time to go over it, but I would suggest you look it up to see what went on because it's, it's, it's interesting. Oh yeah, yeah, that's, that is fascinating. And so, um, now why, why is it harder to reproduce leaders in the next generation of family business? I think in part because leadership is something, there is an aspect that leadership does come with age and. The current generation that is leading has that benefit of seeing things as to how they were, but they forget what they learned, and they forget that failure, their failures is what has made them who they are today. So I'll ask you and I'll ask anybody that's listening, do you remember all of your successes? Uh-huh, no, not really. And what did you learn from them? But I'll bet you you can pretty quickly go and share all your failures and what you learned from them. Good. Because we remember where we screwed up, but in a family business, they don't necessarily want, do you want your kids to fail? No, we never, we never, we don't want our kids to fail, but that's exactly what they have to do to really learn what leadership is. They've got to be able to try things out and a lot of times as as parents, we don't let, especially in the family business, we don't give the kids room to fail to try it, to learn, and guess what, they might just succeed where we don't think they will. So as a result they don't get that experience. Well, that's a great point and also things have changed and are changing so rapidly in the world of technology and marketing and different ways of reaching out to customers that an old mindset just won't cut it moving forward. So if somebody's holding on and holding back, but what you just said. Made me think that a lot of it's probably based in fear because perhaps the older generation in the business hasn't planned properly and they have too much riding on the success of this business into the next generation for their own retirement. And so they have, there's a lot of fear there that if they do mess up, then there goes our retirement and that that creates a lot of tension, doesn't it? Well, apparently Jenna apparently. Apparently I'm doing a solo act here. I don't know exactly what happened. Janet, are you with me? Oh, that that's, that's too bad. We're, we were talking about the fact that, you know, a lot of times there's a lot riding on a family business, and if the parents haven't planned properly, then the younger generation really has to make the business work. Or else the parents' retirement is at risk, and that can create a lot of fear and conflict in a situation. So, Jenna's coming back in. Let me see if we can get her back on the line. I am here. Hi Jana, we've got your back. OK. Hey, you were talking about technology, I believe, and all the choices of technology and how technology just changes and makes our life 100% better all the time. Yeah, and then I made another point, and that was that you really made me think that maybe a reason there's so much fear in the older generation that the younger generation is going to make a mistake is that they themselves have not planned well enough so that there's so much of their retirement riding on the success of the business into the next generation. And so a very large portion of business owners, when I go to them and I say, well, what, what have you put aside for your retirement plan? And they say, you look around here, this is my retirement plan. So the business is their retirement plan, and they don't have a plan B. OK, so that's, that's to the point that the fact is that the, the, the older generation needs the business to succeed. They can't afford a failure because of a failure or that cash flow now has to. Support them into their retirement years and a hiccup, let's even if it's an economy hiccup like in 2008, we had a lot of business owners that said, you know, here's the problem is I have a note owed to my parents. For this business now what am I going to do, default on that note? There's no cash flow and you know I need income. My family needs income, and I have to pay this note. So what do I do? And it's a very tenuous situation. So it goes back to the owners of the business planning well far enough in advance so that they don't have, they don't have to, well, they can afford a hiccup in a business situation. Um, they can't afford the whole thing to go down the tubes, but so there's a lot of fear built into that. Maybe it's not even so much that they don't trust the younger generation, but they fear that they're going to lose everything that they've worked hard for if the business doesn't make it. So the quote that comes to mind is from Stephen Covey, I believe, and it's Begin with the end in mind. And if we run our business with the understanding that at some point we will exit our business and always having that as a part of what where our planning is, and your example is exactly true and I see it all over the place is so you've got let's just take 3 generations. The first generation that started it, they passed it to the second generation who still Paying off the first generation who's now gone and the 3rd generation is doing it who's now paying the 2nd generation. You have an entire family that is depending on your running this business well and and that that has a dynamic that that plays into it. Now it can be done and it can be done very well. I don't want to be discouraging the business owners who are looking to do this because it could be discouraging, but it is going and being intentional. And it's being intentional understanding that the future, you know, we all have to take risks. We all have to move that forward, but it is having that plan B and being intentional in how you go and do things. That's a great point, you know, and, and when you think about legacy businesses and businesses that have transferred from generation to generation successfully, it's probably, they probably weren't completely just by chance. There was Probably a lot of planning that went into that because you do have things like transfer taxes amongst generations and estate taxes that need to be planned for and some of these things are things that can be planned for. Of course some of them operationally, you just have to have a good a good mission that people adhere to and hopefully that's hanging up on the wall somewhere. So what do you think, what do you think, you know, this, this concept of legacy businesses, um, what is the biggest threat to legacy family business enterprises, Jenna? Sometimes it's recognizing that the legacy, the people who are going to step in from a legacy perspective, they may be a good engineer, they might be a good salesperson, but none of the legacy are the right people to run the business. Therefore, sometimes you've got to pull somebody outside of the business to go run it. Maybe it's you've got to bring in a president who's going to run it. They may never have ownership in the business. It still may be a family business, but the generation it's been passed to, so it's really looking at the skills and the desire. So when it is passed, you've got the right people coming because all of us know in any other type of business, having the wrong person at the helm. can be a disaster across the board, and I've talked to a lot of kids who have had the opportunity and they say I have no desire to run the business. I want to work in the business but not run it, right, promote him, it's, you know, the Peter principle is promoting to your greatest level of incompetence and if they're not competent to do it, don't have them run it. I, I, you know, it's interesting you say that. I just had a conversation with someone the other day that said, I'm the CEO of my family business. What does a CEO do? I mean, seriously, and you have to sit back and go, oh my gosh, this is a person, you know, Dad still comes in every day and still does a lot, but he's anointed the son, the CEO, and without even being clear and purposeful about what a CEO does and should do, this is, if Dad dies, this business could be in real trouble very quickly. Um, and so, so what you're saying is that the biggest threat is not acknowledging that businesses need above all capable managers and capable management. And even if you want to put your son in charge as a CEO, you have to make sure he has good people surrounding him. CEOs don't have to run the business, but they need capable people that do, right, in position. And you may need to have, you may, you've got to have that trusted adviser, so maybe it's a coach, and that's what a couple of my clients have done is they've transferred. They've also realized that them in this case is all it has been dads. Dads realized that the worst person for to coach this next generation is them. And they need some fresh ideas. And besides, how well do we always listen to our parents, OK, as far as what they have to say. So I can say the same thing that the dad may have said, but I'm not that. I don't have that history of bringing things into play. And so if you want to be CEO, great, make sure you that they get the training, that they've got the right team around and that they understand financials, understanding your financials and what truly creates profit and what truly creates loss is critical and therefore has an impact on the business as well. Great point. You know, and those are great skills and there is that need to to acknowledge that your kids may be a great CEO, but they may need to know what it takes to be CEO, and that's something that that's up to you to train them. Jana we're out of time, but it's always a pleasure, and I'm so glad you called back. I always like the second time around because we get to go more in depth into some of these things, but I have a, I have a feeling. have a 3rd interview in our future because we're just starting to scratch the surface of all this stuff. You have a book that's called How to Be in Business with people you love without hating them, and I I really love that title, and Janat, people can get that on Amazon and they can get it at your website, I believe, too, right? That's correct, Jana Heiberg.com and as your listeners have questions, have them send you questions that they might have that maybe we can just take some questions from the audience and discuss some of those topics. So if people have got some topics they want us to talk about, let us know and we can create that third one based on what the audience wants to listen to. Great idea. I love that idea. Janna Heiberg is J A N N A H O I B E R G dot com. And uh would, would you take a call from a listener yourself? Absolutely. You can reach me at 719-358-6936. So that's 719-358-6936, and I'd love to be able to talk with you. So listeners, this is, you know, this is something you need to look at. Do you have a situation where there's some, some tension or some need to really plan this out and think down the road? This is an opportunity to talk to someone who's an expert at it. So give Janna a call. Janat, thanks very much for joining us again. It's been a pleasure, and I look forward to the next one. All right, very good. Have a great day. Thank you. You too. I've been talking with Jana Hoiberg of Harvest Business Consulting. We're going to take a short break. We'll be right back. You're listening to Exitcoachradio.com, the show for age 50 plus business owners. We're interviewing over 250 professional advisors for their tips, ideas, and precautions so you can be well planned. We upload new 20 minute interviews and 1 minute highlights every day at exitcoachradio.com. Come listen for a minute. Thank you for listening to Exit Coach Radio.