Disengaging 9 | Family Meeting at Cannon Bridge
Disengaging 9 | Family Meeting at Cannon Bridge
Peter has been wound tight ever since the Cannon Springs Farm board meeting. He’s been fretting, pacing, grinding his teeth at night, acting snappish when anyone interrupts him unexpectedly. Unnerved by Joyce’s anger—about Pete Sr.’s will, about the vineyards’ financial situation—he has resolved to be a more active shareholder in Cannon Springs Farm and has been talking regularly with Joyce, Grace and Matthew. Joyce hasn’t changed her attitude much, but Grace and Matthew seem to appreciate his attention and have welcomed his calls and visits to Potter Valley and Clear Lake. Yet Peter is still on edge, and I think we’ll have to wait for the financials at Cannon Springs to take a turn for the better before he comes back around. At least, I hope things get better at Cannon Springs.
Our daughter Mia, who is working for Joyce’s daughter Grace over at Cannon Springs’ Clear Lake vineyard during her gap year, was the one who suggested that we should have a family meeting. She can feel the tension between Joyce and everyone else at Cannon Springs, and I think she is worried that it will infect us here at Cannon Bridge Winery. I can understand her concern—Jacob in particular has been ranting about Joyce and her behavior at the board meeting. Jacob’s nature is to react to tension by exaggerating it—if someone is worried, he will panic; if someone is angry, he will blow up. Peter’s instinct is to take on others’ stress and try to reduce it, but Jacob is an emotional amplifier.
Anyway, Peter took Mia’s suggestion much more seriously than I thought he would. He asked her to do some research on family meetings and to come up with a proposal for an agenda. This is what she gave him:
People to attend: Dad, Mom, Jacob, Mia, Jay
- Make a code of conduct
- How is everyone doing? Go around the room – everyone gives a 2-minute update
- Business update: Dad and Jacob tell us how Cannon Bridge Winery and Cannon Springs Farm are doing
- Family employment opportunities
- Summer vacation plans
- Go out for dinner together
I was certainly impressed by how seriously Mia was taking this, and I think Peter was too. So, we scheduled the meeting for the following Friday evening, and I made a reservation for us all at the new farm-to-table place in town.
I could not believe it when Mia told me I couldn’t go to the basketball game Friday night because I had to go to some family meeting. I mean, come on! We are undefeated and hosting the defending division champs! But Mom and Dad told me Mia was right, and said I was expected to be in the tasting room at the winery at 5:30 sharp—and I had to be showered and ready to go out for dinner, too. So, I had to rush home from cross country practice. I was surprised when even Jacob showed up on time—he is late to everything.
We started by writing a code of conduct on a flip chart. Pretty obvious, if you ask me: put your phone away and don’t interrupt. Then, we went around the room and everyone gave an update on how they’re doing. This seemed really stupid to me—we all live in the same house! But I honestly hadn’t realized all the things I didn’t know. Like, Mia is waiting to hear from a few smaller colleges out east, and not just our big state universities like I thought. And Jacob wants to hike part of the Pacific Coast Trail this summer with his girlfriend (if Dad will give him the time off). Mom is thinking about becoming certified to train service dogs. And Dad—who has always been a swimmer—wants to do a triathlon in the Fall. I told him I would help him with the running part. Who knew all this stuff was going on under our roof? I told everyone that senior year was going pretty well but I wanted to do what Mia did and take a gap year and relax a bit. Mia jumped in with a big sister lecture—“it’s not supposed to be relaxing”—but Mom pointed to the code of conduct and she shut up. That code of conduct is not such a bad idea after all.
Dad did a report on Cannon Springs and Cannon Bridge, complete with charts and numbers. He’s not very good with PowerPoint, and some graphics would really help. Basically, the point seemed to be that the grape growing business is tough right now, but the higher-end wine making business is going okay. Jacob added some insanely detailed update on grape varietals that bored us all.
Then Mia raised the topic of family employment opportunities. She cut right to the chase—she said she liked working with Grace at Clear Lake (even if Joyce was tough to deal with a lot of the time), but was there any long-term opportunity in the family businesses for Mia and me, since Pete Sr. hadn’t given the two of us any shares? She said she wanted to know because it would affect where she decided to go to college and what she would major in.
Dad immediately said, “Of course you can, of course,” but he stuttered and you could see he was fumbling for the right words. “The family businesses belong to all of us, you know that. We want to continue the legacy your grandfather Pete started.” At that, Mia raised her eyebrows a bit and Mom looked down at her notes. The fact that Grandpa Pete didn’t give Mia or me any shares has been a sticking point in our family for a long time. “I am thrilled—we are thrilled—that you are interested. There is a lot to discuss and plan. Why don’t we make that the topic for our next meeting?”
Mom looked back up, and said it was time we all headed for dinner.
Dad, saved by the clock, was the first to stand up. I high-fived Mia as we walked out of the tasting room, but she just elbowed me.
Family Business Analysis:
Thoughts on Family Dynamics – Governance – Strategy
Family meetings are a building block of effective family business governance. They create a forum for discussing matters of interest to the family, including the business itself. For the Cannons, it seems a particularly good time for a family meeting, given all the tension that has been generated by financial difficulty and Joyce’s outbursts and problematic behavior. By agreeing to a family meeting and taking it seriously, Peter and Chi-Yu are signaling an intention to be forthcoming and open about matters affecting the family and the business. By asking for the meeting, Mia is signaling that there are important issues she feels need to be addressed.
Mia’s agenda for the meeting covered a number of important bases:
- By starting with a code of conduct, the group created its own expectations for behavior. A group that creates its own code of conduct is more likely to hold itself accountable. A code of conduct is also a good way to begin teaching next-generation family members about how meetings work, and it’s more effective than parental nagging!
- Everyone got an opportunity to update each other. As Jay noted, he learned things about his family that he had never known before, in spite of living together under the same roof. Particularly when family members lead busy lives, there may not be enough opportunities for interesting and important information to be shared. As families expand, the benefits of dedicating some meeting time to updates grows.
- Peter and Jacob had the opportunity—and responsibility—to update the family on the business. Business updates increase family members’ general knowledge of the business, and also strengthen business leaders’ ability to present key ideas in digestible formats. Clearly, Jacob needs some more practice on this skill. Given Mia’s interest in working in the family businesses following university, such information sessions could be formative.
- Mia included family employment opportunities on the agenda, but it appears that Peter wasn’t entirely prepared to answer her question. Putting off a hot question can sometimes be necessary, but Peter does need to address Mia’s question. It would be a good idea for Peter to get a follow-up meeting on the family calendar quickly, and to be prepared to respond in satisfactory detail.
- Sitting down together for a meal following a family meeting can be an excellent way to reduce the tension that sometimes arises during family meetings, and to build family glue. But once the meeting ends, try not carry complex discussions to the dinner table.
As a matter of governance, Mia’s question about earning shares raises the issue of whether to encourage the ethos of “work to own.” In many early-stage family businesses, only those who work for the business can receive shares. However, over time, between estate planning transactions and a desire to treat everyone “fairly” (however the family might define that term), stock often comes to be held by non-managing owners. Peter will want to think seriously about whether to encourage Mia’s idea of joining the business in order to get stock. He’ll also need to talk with Joyce about how they ultimately want the stock of Cannon Springs Farm to be divided, a topic that was made much more complicated when Pete Sr. opted to bequeath shares of Cannon Springs to all his biological grandchildren, leaving out his adopted grandchildren, Mia and Jay.