Chart Is Aimed at Easing Change of Command at Family Firms
To the uninitiated, the colorful design looks like a television test pattern. To the initiated it . . . still looks like a television test pattern.
But it’s not a test at all, television or otherwise, says a creator of the Family Fortune Wheel. It’s more of a quiz.
A glance at the circular chart covered with numbers leaves some scratching their heads, but one of its creators says it helps family businesses prepare for a change of command.
“It’s a very practical way to get a quick overview of the family-owned business,” said Stephen Woodworth of the California Family Business Institute in Westlake Village.
Family-run companies are often not as prepared as they think they are for a younger member to take over when a CEO retires, Woodworth said. The wheel is a visual aid showing a business’ strengths and weaknesses.
“Succession is not an event, it’s a process, so you need to prepare for it well in advance,” Woodworth said. “You need to determine what are the important things that need to be developed.”
Perhaps not surprisingly, the chart is the brainchild of an investment banker (Woodworth); a business psychologist, Ralph Daniel; and a marketing strategist, Nelson Dodge, all county residents. Each specializes in family business.
There are unique problems in running a family operation, Woodworth said, such as keeping work issues separate from family matters, sibling rivalries and estate planning.
The trio have seen those problems from different perspectives, he said. In 1996 they pooled their talents and focused on one area, helping older family members retire to let a younger member take over the company.
Using case histories, they created an “average” company profile against which they compare a client’s information.
The client’s employees answer questions about how they perceive the company, then Woodworth and his partners compare the answers to their “average.”
They list the results on the wheel in 12 categories, including family relationships, CEO readiness and management structures. They score the results on a one-to-six scale, to show the company where it needs to improve for a successful changeover.
The wheel’s creators hope it sparks family discussions, Woodworth said. It garnered interest at a trade show in Chicago last fall, and some Ventura county companies have already tried it.
Steve Blois, co-president of Blois Construction in Oxnard, had been working with Daniel and tried the wheel at his suggestion.
Blois said he and his brother had been reorganizing their business to operate less as a family and more like a business.
“You could say it was a litmus test,” he said. “It was to check to see if the other things we were working on were having any effect.”
His company scored well on the wheel, he said, even though he didn’t entirely understand how.
“It looked like a ‘black box,’ but it was explained pretty well,” he said. “I don’t think we have to understand the mechanics, that’s their deal. We understood the output.”
Woodworth and his partners have been marketing the wheel over the Internet and through the mail. He said if the wheel is successful they may create another model for other small businesses.
