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Of Feuds And Family Businesses


wealthymattersStrong disagreements are inevitable in all human relationships, but families that own businesses are more at risk for serious conflict than ordinary families because the power, status, and money at stake are greater.

There are seven predictable stages of conflict.These stages are largely avoidable, but the owners of family businesses have to be aware of them,and of the ways to extricate themselves when they get caught up in a spiral.

The Seven Stages Of Conflict Are:

1) Interests Diverge :

An interest is a broad desire that a person or group of people have for something. Some interests are shared; others are individual. Most business families are united first and foremost in their wanting  to keep the business healthy. However, given that family members have different roles and responsibilities as the family business grows, interests naturally diverge. Some family members work in the business, and some are owners (some are both; others are neither). Those employed in the business will be more inclined to channel profits to re-investment and bonuses, while owners will be disposed to pay higher dividends. Where anyone stands on a particular issue will be influenced by where they sit in the family business system. Read more of this post

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Managing Conflicts In A Family Business


wealthymattersFor most people, conflict is uncomfortable. That can be especially true in families who’ve watched family conflict tear successful businesses to pieces:.What’s less often recognized is that too little conflict in a family business can have an equally destructive impact. The impact of both too much and too little conflict on both the family and their enterprise are almost identical. In both cases, the business can suffer from limited growth, poor decision-making, a loss of competitive advantage, and, in severe cases, the sale or split of the company. Similarly, families tend to break up into factions and suffer poor relationships. The mechanisms are different, but the results are the same.

Conflict is a “Goldilocks problem.”In the sense the earth is in what astronomers refer to as a Goldilocks Zone.Much closer to the sun and it would be too hot to sustain life, much further and it would be too cold to sustain life. Though the reasons differ, both extremes make life uninhabitable. Both ends of the spectrum are ultimately unsustainable–so the best place is in the middle. Read more of this post

Managing Careers In A Family Business


wealthymattersIn family businesses, hiring and staffing decisions are based on relationship and obligation as much as on competence and experience. After all, one purpose of family businesses is to provide employment for the family members ! But that doesn’t mean all family members perform effectively,all the time. People may slack off or stop collaborating, and sometimes they get a pass for their mistakes or behaviors. At times, they may even be disruptive to the smooth running of the business.

So what can be done in such circumstances? Read more of this post

Investing In Turnaround Stocks


wealthymatters

Turnaround stocks are stocks of companies that have gone through a phase of weak financial performance and whose share prices have been beaten down,but are likely to rise again as companies change their business strategy to become profitable again.

Now,if you are the bargain minded sort,you are bound to be attracted to this idea of identifying gems going cheap,holding them long,and having your wisdom and foresight validated by tidy profits …..!

But do contain your eagerness and look before you leap.Investing in turnaround stocks can yield spectacular returns to investors willing to buy into them when there literally seem be few takers and hold on,but then again wrong calls can lead to permanent loss of capital when the anticipated turnaround doesn’t  happen or gets stalled. Read more of this post

Making Blockchain Technology In Life Insurance Work For You


wealthymattersBack in April 2018, when I read the press release from Cognizant about having teamed up with a consortium of fifteen Indian life insurers and developed a blockchain solution to facilitate cross-company data-sharing to help these life insurers reduce their reliance on data intermediaries and aggregators in obtaining customer and policy details for a wide range of critical purposes, such as know-your-customer due diligence, financial and medical underwriting, risk assessment, fraud detection, and regulatory compliance, I was FURIOUS.

Why?

You see, I am a long-standing customer of 2 of these 15 life insurance companies. One of them was the company I made my very first purchase from all those years ago, on the recommendation of a banker I trusted. And at that time I had in all honesty made full disclosure of all the information they sought in their proposal forms and the additional queries their underwriters had. However, I made the disclosures for the limited purpose of purchasing specific policies from these companies. And at a time that block-chain was nowhere in anybody’s mind space. Read more of this post

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