|Thoughts on Business Law Topics|
|Seeing the Blind Spot
December 5, 2018
I am excited to report that “Seeing the Blind Spot” — a book I have co-authored with Mariana Martinez, Psy.D — will be published early in 2019. This book is a collection of family business case studies and accompany commentaries. We hope it will become a valuable contribution to the literature in this field, and that professionals who advise family businesses will find it particularly illuminating and beneficial.
April 2, 2017:
Today I served as a judge for the Georgetown University entrepreneurship competition.
July 24, 2016:
Attached are the slides for a presentation I recently did for WebCredenza, Inc., on the topic of buy-sell agreements. Buy-Sell presentation June 2016
February 22, 2015: Family business succession planning usually requires a multitude of skills and disciplines. It is common for such planning to include elements of financial planning, organizational development, executive coaching, law, mediation, accounting, among other elements. Also, the execution of that planning often occurs over the course of several years, which adds to the complexity of such planning and uncertainty of outcome, even under the best of circumstances.
It should not be surprising therefore that sometimes all the King’s horses and all the King’s men cannot prevent such planning from failing. One factor in such failures is typically ineffective execution. But often there is another problem at work: the failure of the planners to acknowledge that planning rests on multiple assumptions, the validity of which cannot possibly be known or determined at the time planning is being done. For example, one assumption may be that family members will cooperate as necessary for the best interest of the business, or in the case of a multi-generational family business, develop the critical sense of stewardship that Jack Moore and Terry Phinney have identified (see http://www.msbdcse.com/tag/family-business/). Another may be that the financial projections for the business (such as the cash flow from the business, necessary to achieve certain operational and buyout goals) will be met. If at least one of those assumptions proves to be incorrect, the succession plan is almost certainly doomed, regardless of the quality of other planning involved.
Unfortunately, many plans are do not contain the flexibility necessary to account for the possibility that some or all of those assumptions may be wrong. Thus, the one indispensable element of many plans (and unfortunately a missing element as well) is modesty. Where there is modesty, there are alternatives, fail-safes, work-arounds and contingencies. Those characteristics reveal a planner’s acknowledgement that not all things are known or can be known, and that the highest achievement of planning is to modestly admit that.
January 9, 2015: My friend and colleague Mariana Martinez and I co-authored an article which appers in the January/February 2015 issue of “Family Business” magazine. This article addresses the impact that restrictive gifts and other similar devices have on multi-generational family businesses.
October 6, 2014: Today Hewlett Packard announced it will split into two companies, one that contains its PC and printer businesses, and the other consisting on its enterprise business, which sells computer servers, data-storage gear, software and other services to corporations. The move appears to be designed to give each of those companies a more concentrated focus as they attempt to compete in a rapidly-changing tech environment.
Whether the split produces the benefits the HP Board is seeking or not remains to be seen. Nonetheless, the split is a useful reminder to all boards and owners to periodically review the structure of their business(es) to ensure the structure meets the relevant operational, financial and strategic goals. Truly separate lines of business — particularly those that have different financial needs or present different liability risks – should always be housed in separate corporate vehicles. That is only one of many circumstances which should lead to corporate reorganizations such as the HP split.