Peter May Family Business Consulting – How Lively Communication Succeeds in Large Business Families
Amelie Eichblatt, Partner at PETER MAY Family Business Consulting, talks to Paola Wentzler, Partner at Freudenberg & Co. KG, about the importance of communication in large partner families.
Paola Wentzler joined Trusted Family, a technology platform for family businesses, as Business Development Director Europe North at the beginning of the year. As a member of the seventh generation of a large German entrepreneurial family with more than 300 shareholders, she is familiar with the advantages and challenges of a family business. Our partner Amelie Eichblatt talks to Paola Wentzler about how important it is to maintain communication within a globally positioned family so that future generations actively play their role as shareholders.
Amelie Eichblatt: Dear Paola, you are a representative of NextGen and a partner in the family-owned company Freudenberg & Co. KG. How do you organize yourselves as a family of partners? What can you pass on to other NextGens from your experience?
Paola Wentzler: The role of the family is defined in our partnership agreement, which contains very precise “rules of the game”. In view of the size of our family, with more than 300 shareholders, we have a classic corporate constitution in many areas, but with very democratic elements. For example, the representatives of the family on the Shareholders’ Committee are elected by secret ballot. However, given the large number of our shareholders and their regional distribution in many countries, a closer organization such as a family office is not possible.
However, there are many opportunities for young shareholders to get to know each other and the company. There are also opportunities to network with other entrepreneurial families. But the best thing is always our big family reunion at the company’s headquarters, where the extended family gets together once a year.
Amelie Eichblatt: With such a large family of shareholders like yours, coordinating such meetings and communicating with each other seems very time-consuming and complex to me. How do you do that?
Paola Wentzler: Yes, of course you are right. We shareholders are supported by a team of six employees who plan and coordinate these meetings. The entire communication with all shareholders is also handled by this department. In addition to traditional communication via e-mail and telephone, we use various tools – depending on the information. For communication within the family, we use a protected chat room. So far, however, it has been difficult to find a uniform platform.
Amelie Eichblatt: In conversations with successors who have taken on the role of family manager in their family business or are considering doing so, I repeatedly find that most have the impression that the measures defined within the family are not prioritized and consistently implemented. What can you pass on to other NextGens from your experience? Or: In your opinion, how could the potential and effectiveness of your defined family governance measures be increased?
Paola Wentzler: The long-term direction of family businesses depends on committed family members who are willing, able and ready to contribute as active owners and leaders. A critical part of preparing for generational change is a structured approach to how you prepare the next generation for ownership and leadership roles.
The potential and impact of family governance measures depends very significantly on the inner attitude of those involved and the family and corporate culture. All these factors must therefore be constantly nurtured and trained. Professional shareholders probably act more rationally, but one must also bind all shareholders emotionally. A firm framework, set by the joint development of a family constitution and a good partnership agreement, is absolutely essential, as is a carefully formulated set of values that is supported by everyone. Constant comparison and exchange with other family businesses is also helpful.
Amelie Eichblatt: In addition to your role as a shareholder in the family business, you have been part of the team at Trusted Family, the online platform for family, board and shareholder governance, since the beginning of 2022. What motivated Edouard Thijssen and Edouard Janssen to found Trusted Family in 2012 and what exactly can we understand by the platform?
Paola Wentzler: Both founders are also members of the next generation of multigenerational family businesses from Belgium, the Aliaxis Group and the Solvay Group, respectively. They met at a family business conference and then realized from their own experiences that the complexity of any business family increases across generations:
The family gets bigger.
The family spreads out across different cities/countries
Family members have different ownership stakes
Increasing complexity makes it harder to scale decision-making, get everyone around the table and excited about the business and the family, keep inactive family members informed, and keep the family together.
Together, they then developed an online platform to improve business management and communication – initially for their own families. But other family businesses quickly showed interest.
Amelie Eichblatt: The “gateway” for such digital tools in shareholder families is largely the next generation. What do you think distinguishes this generation? From what size (group of shareholders) is such a tool helpful? And what can be done to increase the acceptance and use of such a platform among users?
Paola Wentzler: The next generation is characterized above all by its internationality and the desire to be able to work and be informed in a mobile and self-determined manner. However, the NextGen does not forget its family values and traditions. Everyone is aware of the responsibility that comes with being part of a family business and wants to help shape the future – especially when it comes to the issues of sustainability, climate protection, equal rights and fair working conditions.
In principle, the platform can already be used with a very small family circle of five or more family members. After all, this is not just about communication within the family, but also about collaboration with all stakeholders. But if we take a closer look at NextGen in particular, the platform is a very good means of keeping every shareholder and every family member up to date, no matter where he or she happens to be. Thanks to our app, you always have access to all the communication with all the data, even when you’re on the move, creating transparency. However, the platform can only be as good as the content that is fed to it. In other words, it is important that there is someone who fills the platform with contributions and thus brings it to life. This can be an employee who already takes care of the communication with the family members or someone from within the family.
On the Trusted Family side, however, each family always has a contact person at its side – in our case, these are the Client Success Managers. They help with the individual design of the platform and the creation of the first content, and are always available to answer questions, find solutions quickly, or deal with problems. We are also happy to be on-site during the launch of the platform to provide very personalized support during the launch, and can address questions or initial issues directly. Since we at Trusted Family are a very international team – many are also part of entrepreneurial families themselves – we can provide our families with very individual and personal support.
Amelie Eichblatt: We accompany many owner families in the development of owner strategies and family constitutions. But these are only as good as their consistent and sustainable implementation and the honest commitment of the owner family. In my opinion, the fundamental factor is the family’s honest and long-term commitment to the content of the family constitution that has been drawn up and to the subsequent family governance measures. How can an online governance platform like that of Trusted Family support this?
Paola Wentzler: In my experience, most family businesses are not very advanced when it comes to using technology to support communication and decision-making. Communication technology has evolved a lot in the last decade. Messaging apps, online cloud storage and document sharing, when used properly, can help business families stay connected and informed about their family business.
Platforms like Trusted Family have integrated these technologies with the sole purpose of solving the communication problems of family businesses and family offices. The use of digital tools can ensure that information sharing is segmented by stakeholder, and offer family members the opportunity to connect and contribute to decision-making when they should have a voice.
Amelie Eichblatt: Finally, I’d be interested in your vision for Trusted Family.
Paola Wentzler: From my perspective, our goal is to develop Trusted Family into the world’s leading platform for family governance of entrepreneurial families of all sizes. Family businesses play an important role in the global economy and the decisions that boards, shareholders and the family members behind them make have a huge impact on the world we live in! Our vision is to help families make good decisions and stay together and successful across generations!
Amelie Eichblatt: Thank you very much for the interview and I wish you all the best for the next steps at Trusted Family and in your family of shareholders!