Roy Disney

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5 Tips for Siblings Working Together in the Family Business

This is the second in a two-part series on siblings in family businesses. Part one covered some successful sibling partnerships, while part two give tips for success for siblings who are in business together.

Even though you may have fought over whose turn it was to use the bathroom and who sat where in the car as children, that doesn’t mean you can’t own and run a successful business with your sibling.

There are unique challenges to it, of course. You may not have chosen your sister as a business partner. You can’t easily quit and go to another business when you’re frustrated. And it can be uncomfortable to attend Sunday supper with the family if you’ve just had a disagreement over an issue at work.

Here are some tips for you and your sibling to work together successfully.

  1. Have separate roles based on skill, not family hierarchy

Just because he started with the company first doesn’t mean that sibling should become the CEO. He may not be best suited for the job and would rather use his background, education and natural skill with numbers to serve as CFO. Perhaps another sister or brother is best suited to the role, and just needs a bit more training to take over the lead position, while a different sibling might have the perfects skills and personality to run the sales department.

  1. Understand, trust and respect each other’s contributions

I imagine Walt Disney got frustrated with Roy sometimes when he didn’t immediately jump on his latest vision for their company, being concerned with how they would finance it. And Roy was equally frustrated by Walt’s tendency to continually start new facets of the company without considering available resources.

But they were smart enough to realize they each played a crucial role in the company and that it took both of them to make it successful. They needed, respected and trusted each other.

  1. Communicate frequently and put it into writing

Any business needs open channels of communication on all levels. With family businesses, making sure decisions are communicated in writing is critical, as there tends to be more verbal communication among family members.

If you’re at a family picnic and make a decision about something crucial to the business, follow it up with an email to ensure you both understood the decision you made.

Hold regular, formal meetings with your siblings to discuss the business. Make sure every partner feels heard during the discussions and that notes are taken during the meeting and distributed afterwards.

  1. Establish, tweak your mission and goals together

Maybe you and your sibling started the company with one mission, but as you took your goods or products into the marketplace, you saw that a correction to that mission is necessary and your goals may shift. Or you’ve decided you should shut down one subsidiary in favor of focusing on another.

Discuss any changes or direction with your sibling partner. Don’t assume he or she has come to the same conclusion.

  1. Establish boundaries between work and family

If you and your siblings enjoy socializing outside of the office, that’s great. But if you’re forced to more than you’d like, maybe from pressure from dear old mom and dad, seek to minimize that time together, or just request it be a no-work-talk social event.

It won’t always be easy to be a partner with your sibling. When times are tough, remind yourself that you do love each other and you will always be family. Ultimately, you share the same goals of maintaining family harmony and growing a successful business.

 

 

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Famous Sibling Partnerships that Worked

This is the first in a two-part series on siblings in family businesses. Part one will cover some successful sibling partnerships, while part two will discuss lessons for siblings who are in business together.

Running a family business is never easy, and can be particularly hard when siblings run it together. Ever since the days of Cain and Abel, siblings have fought and competed and vied for their parents’ attention. To make it worse, they often didn’t choose to be partners, but were forced into the situation by a parent.

But these partnerships can and do work. Siblings can run a successful business together. Here’s a look at three famous sibling partnerships.

The Wright Brothers, whose successful partnership led to the first functional flying machine.

The Wright Brothers, whose successful partnership led to the first functional flying machine.

The Wright Brothers

Although they weren’t the first to build a flying machine, Orville and Wilbur Wright invented aircraft controls that let a pilot steer an aircraft. They took lessons from their work repairing bicycles to figure out how to control an airplane.

Their first business was a printing shop, with Orville serving as publisher while Wilbur was the editor, when Wilbur was 22 and Orville was just 18. That business was short-lived, followed by the bicycle repair shop. Their interest in flying eventually led to the first successful airplane flights in Kitty Hawk, North Caroline in 1903.

While Wilbur supplied the research skills, Orville was the more adventurous and ambitious one. Their skills complemented each other, with Orville able to overcome any doubts Wilbur had. Wilbur said, “I confess that in 1901 I said to my brother that man would not fly for fifty years.”

Their partnership was a successful one for these brothers known as the fathers of aviation. Despite what the former president and chairman of American Airlines Robert Crandall said, “If the Wright Brothers were alive today, Orville would have to lay off Wilbur.”

The McDonalds

Brothers Maurice and Richard McDonald planned to make their millions in the movie business after a move to southern California from their native New Hampshire. When that didn’t work out, they sold barbeque and hot dogs.

In 1948, they revamped McDonald’s Famous BBQ by downsizing the menu, getting rid of car hops and streamlining production in the kitchen. They wanted a symbol for their restaurants, creating the famous Golden Arches, much to the distress of their architect. They also began franchising their concept, which caught the eye of Ray Kroc, a milkshake machine salesman.

Ray bought the national franchise rights in 1955, purchasing the company outright in 1961 for $2.7 million. Now the fast food giant takes in more than $27 billion a year.

The brother’s partnership worked well and Richard expressed no regret at selling the company. “I would have wound up in some skyscraper somewhere with about four ulcers and eight tax attorneys trying to figure out how to pay all my income tax,” he said.

The Disneys

We all know who Walt Disney is. Less famous is his older brother Roy, who was his co-founder of Walt Disney Productions. Walt was the visionary; Roy was the finance guy, generally a less flashy role.

“Walt had this idea [for Walt Disney World]. My job all along was to help Walt do the things he wanted to do. He did the dreaming. I did the building,” he once told reporters.

They started working together at a young age, delivering newspapers after their dad bought a route. Roy was a banker in Los Angeles when Walt moved there and they founded Disney Brothers Studio in 1923 to produce short live action, animated films. In 2014, the company reported revenue of more than $48 billion.

Despite any lingering childhood issues, siblings can form successful partnerships. Come back next week for tips on how to run a business with your brother or sister.

 

 

 

 

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How to Encourage Innovation in the Workplace

This is the second in a three-part series on Innovation. The first in the series, “Innovation Distinguishes Between a Leader and a Follower,” provided some examples of companies like 3M that have stayed successful for decades by continuing to innovate. These next two parts focus on the steps to encouraging innovation.

In my last post, I wrote about the need for businesses to continually innovate. As Steve Jobs said, “Innovation distinguishes between a leader and a follower.”

But innovation isn’t something you can just mandate, like telling your employees they need to schedule their lunch hours at certain times. And it’s not just adding a line item to your budget under the column “Innovation.”

Ironically, results from innovation and creative thinking are often not related to the amount of money spent. As Steve Jobs also said, “Innovation has nothing to do with how many R & D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R & D. It’s not about money.”

So what did he say it is about? “It’s about the people you have, how you’re led, and how much you get it.”

After reading my last post, I hope you get the need for innovation. So let’s talk about how to hire people that will help you innovate.

Hiring the Idea Generators

Any manager knows there are differences between the people who excel at coming up with ideas and those that excel at execution of those ideas. A successful company will have a combination of both at all levels. And never has it been more important to find those idea people.

As Richard Florida, an American urban studies theorist, said, “Access to talented and creative people is to modern business what access to coal and iron ore was to steel-making.”

Consider Walt and Roy Disney, co-founders of Walt Disney Productions. Walt was the big idea guy, while Roy’s expertise was in finance. “Walt had this idea [for Walt Disney World]. My job all along was to help Walt do the things he wanted to do. He did the dreaming. I did the building,” he once told reporters.

But it’s a lot easier to review a resume and determine if someone can handle the financial area of your company. How can you scout for people good at generating ideas?

There’s no particular college degree that would indicate a person’s creativity. Some of our generation’s best innovators famously didn’t finish college — I bet you can name three right away. (Think Facebook, Apple and Microsoft.)

And the people who did come up with great ideas aren’t always recognized for them. Ironically, the person who invented the fire hydrant remains unknown because the patent was lost in a fire at the patent office in D.C. in 1836.

Here are a few tips to find and hire these Idea Generators:

Ask your current employees

The people you have on staff, particularly the more creative ones, probably already know some people they admire as idea generators and would like as co-workers. Let your staff know of your efforts, recruit among their recommendations and offer a referral bonus

Tailor your interview questions to identify them

Ask questions that will reveal a candidate’s creative past. Ask for ideas they have come up with and implemented at previous workplaces or any organizations with which they have been involved. You may find someone who volunteers at an organization who came up with a killer fundraising idea.

Add innovative features to the interview process

A friend’s son recently underwent an hour-long interview exclusively devoted to brainteasers. In a previous post, “Tips on Hiring from the Corner Office,” I wrote about a company that leaves a candidate with a calculator, pencil and a sandwich and returns in two hours. That’s for analysts positions at a $2 billion hedge fund, but you get the idea. Just as you are judging your candidate, they are judging the innovation of your company starting with the way in which you hire people.

Present an environment that encourages creativity

Idea generators want to know they will be in an environment that will foster their creativity, not stifle it. For tips on how to create such an environment, read the third part of this series.

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When An Entrepreneur Needs to Hire a Professional Manager

Every successful entrepreneur of a certain size company figured out at some point that he needed to hire a professional to run the company so he could do what he does best — create new products and services, explore new market niches and consider new ways to market existing products and services.

Every company needs a balance between the creative visionary and the person who can focus on the day-to-day activities of running the company. The skills and vision needed to start a business are not the same as those required to keep it running.

Walt Disney dreamed up ideas for Disney. But it was his brother Roy (right) who found the money to fund his big dreams.

Walt Disney dreamed up ideas for Disney. But it was his brother Roy (right) who found the money to fund his big dreams.

We are all familiar with Walt Disney, the creative genius behind Disney. How many people know that he actually started the business with his younger brother, Roy? Walt was the creative one, but Roy is the one who raised the money and kept it financially stable. In terms of revenue, it is now the largest media conglomerate in the world.

Mark Zuckerberg hired Sean Parker as the first president of Facebook in 2004, and although Sean was later ousted for his excessive partying, Zuckerberg has said, “Sean was pivotal in helping Facebook transform from a college project into a real company.”

Sometimes I am asked at what point an entrepreneur needs to hire a professional manager. There is no particular formula. It totally depends on the industry and the needs of the company. It could be at the $1 million level or one much higher, or even in some cases, lower.

As an indication, here are two signs that it may be time to hire a professional to help you run your company:

1. You are no longer doing what you do best

Rather than focusing on innovations to keep your company growing and increasing market share, you are spending more time on areas like accounting and managing a growing workforce. Getting help in those areas will allow you to focus on using your personal strengths to improve the company.

You may be one of those entrepreneurs who actually is a very good manager and things have been going well so far. But you can only handle so many jobs, and if you are spending a majority of your time managing the company, who is managing the innovation to make the company continue to grow?

2. Your company has outgrown your ability to handle it on your own

A professional manager will not only take over some of the workload, she can bring new skills to the company and instill best practices from experiences at other businesses. She can also analyze the strengths and weaknesses of your business in a way you are unable to as the founder of the business.

A successful entrepreneur is one that is able to recognize when he needs to hire professional help and is then able to make the transition to having someone else handle the day-to-day management.

For tips on how to hire the right professional, see my column “How to Search for Superstars.”

Look for me November 10 at 4:30 at the Book Festival of the Marcus Jewish Community Center of Atlanta. I’ll be discussing my book,  ”How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.” The event is free and open to the public. Click here for more information.