Jasper Shipping, Inc.

Situation

• Family: Elderly father/founder; two brothers and a sister are active; one brother is a passive owner; elderly mother is an active “mediator.”
• Business: Shipping, warehousing, logistics, and real estate interests.
• Ownership: Father and mother were reluctant to sell the business to their adult children and to recede from daily operations; they've have been stalling for 12 years.
• Crises: Losing $600K/month; sister “left” the family-owned business (FOB) in a rage; major battle over the going-forward business strategy.
• Leadership: The three active siblings have complementary skill sets (strategic, operations, and sales) and, on paper, would be able to carry the business forward.
• Core Issue: The supercharged, emotional issues swirling around, which are causing everyone to work at cross-purposes, behave non-rationally, and interfere with the FOB CSF’s—focus, determination, courage, and teamwork.
• Not Happening: Formation of a Holding Company; Intentionally Defective Irrevocable Trust; Family Limited Partnership; redesign of accounting system, per Holding Company reorganization; business valuation.

• Preserve Family Relationships: Parents with their three active adult children; father with his daughter; active adult-children with their passive brother.
• Coax the Sister Back In: Her departure would cause a meltdown, plus she was getting ready to do something non-rational (buy a business to “prove herself”).
• Align the Three Actives: The relationships among them had been battered and bruised by all the turmoil; their bond needed to be shored up.
• “Reality Therapy” with Mother: On many issues, Mom thought and spoke for Dad. She saw the lay of the land more clearly than he (e.g., his age/health, the high “feud potential” within the family; etc.), but she was ambivalent about standing firm on the side of family harmony.
• Get Dad to Do the Right Thing(s): By hook or by crook—otherwise, everything was going to implode—the Family and the Business.

Solutions

• Conduct initial half-day interviews with each family member to establish rapport and credibility, triangulate to an approximation of reality, and assess the breadth and depth of the family’s talents and abilities.
• Administer web-enabled assessment survey to all family members and key non-family management. This organizational 360 produces objective data to counter-balance the interview findings and assist in the process of triangulating toward a balanced understanding of the situation.
• Facilitate "Family Councils" to resolve conflicts, prevent self-defeating and non-rational behavior, negotiate compromises, promote harmony, surface creative solutions, and move the family toward a mutually beneficial resolution of the difficult situation.
• Convene "side-bar" meetings to support the underlying consulting strategy—meet alone with the parents; meet alone with the three active siblings; meet alone with the passive sibling; and initiate one-off phone conversations—utilizing this form of “shuttle diplomacy,” as the need arises.
• Reorganize the business roles of the four key players; negotiate with Dad to assume a marginal role; invite the daughter back to run her former division; elevate one brother to run the division that Dad was “running” (this brother was seen historically as “just” a sales guy); and formalize the most talented sibling’s role as CEO.
• Advise the sibling team on how to operate effectively as a team, with a clear and smart division of labor, playing to each other’s strengths, communicating with finesse, preserving harmony, and executing on an effective turnaround of the business.

• Dad stepped back and out of the business.
• Dad transferred ownership of all meaningful entities to his children.
• The “governor” was removed from the siblings’ incomes, and they were compensated more in line with their roles in and contributions to the business.
• As their tax advisor observed to us, “The business has made a tremendous turnaround,” going from bleeding $600K/month to showing a monthly gross profit of  $250K-$350K.
• The family is moving ahead on sorely needed tax and estate planning.