"We need a family constitution!" (or charter, or protocol...)
This is sometimes the way families approach advisors. In some ways the request is: "Can you please help us find the magic formula (or "Tables of the Law") that will make us able to own this business together, in our new ownership / family geometry, without conflicts?"
And yes, probably, in a few months or years, this family may ratify its constitution. And this constitution may prove very useful. But if they have not, in the process, discussed their real issues, the whole exercise can be useless. So, the first objective of the process should be to ask the question: "What are the key issues that we face, or are likely to face soon? What is it that we need to talk about, maybe for the first time?"
A family called me because a new generation of cousins was leading and owning the company, and the family leaders wanted to invite their cousins to write their values. This exercise would be the "founding act" of their generation, and most likely a key element of a future family constitution. Listening to the leaders, I understood that there were tensions that were not talked about in the family. So, instead of focusing their planned family meeting on writing the values, we decided to open and ask the family members: "What are the questions that you think we should be working on?" We used participative methods: each person could fill as many cards as they saw fit with their issues, we posted and grouped them by theme. We were thus able to identify several issues, such as communication (as in most families) or the role of women (same!!), governance, next generation, etc... Values were one of the topics, but not the most urgent one: the most urgent was communication and the frustrations accumulated by some women of the family who had not been treated like their brothers.
Similarly, a smaller group (parents and siblings) called me to help them write a constitution. After 2 sessions, the father asked for examples of other families' charters and said that he hoped to finish the charter at the next meeting. What he had not yet realized was that his children were just starting to have real exchanges about their past experiences, conflicts (in childhood and at work), desired behavior, etc... These exchanges were major steps toward the construction of their family enterprise. They would lead to written agreements, but later.
The family charter will be useful once finalized and agreed upon: it will formalize agreements and will serve as a reference in future decisions and dilemmas. But it is also useful before being written: it is a concrete way for families to express their need to work on a new system. The sentence “We need a family charter” means that the family is ready to work on its new dynamics.
In conclusion, the family charter will not come by miracle and help solve all existing issues. The issues will be solved because of the discussions, sometimes difficult, that the family holds. These discussions are the essence of "Fair Process", a notion that Ludo Van der Heyden, Randel Carlock and myself adapted to the context of family firms.
In a research on the sale of the family business, Sabine Klein and I found that the most painful sales occurred when the family had conflicts AND rigid governance structures (including agreements). Communication could not take place!
So... Next time a family comes and says “We need a family charter”, what will happen?
(Thanks to Paul Delahaie et Catherine Tanneau, Variations (change management experts and coaches): the idea of the title came from a discussion with them)