Type header copy here.
January 29, 2014

and
“Philly’s Big Comeback”
Tony Altomare http://www.youtube.com/watch?v=6H0jk-
2QLUg&feature=player_embedded

and
“Philly’s Big Comeback” http://www.youtube.com/watch?v=6H0jk-
2QLUg&feature=player_embedded
Tony Altomare

and
“Philly’s Big Comeback” http://www.youtube.com/watch?v=6H0jk-
2QLUg&feature=player_embedded
Tony Altomare

EXERCISE: Ownership Strategic Thinking
What is your family’s long term wealth creation strategy?
Harvest Strategy Growth Strategy
Q. Does your ownership group want to be in harvest mode or growth mode? Discuss both scenarios.
Q. Are you intentionally building new assets and value streams or are you milking old assets? Is this good or bad?
Q. What are the issues and criteria for deciding if you are in a harvest mode…or a growth mode?
Key Concept: “It is fine to be in harvest or growth mode as long as it is an intentional strategy and everyone understands the ramifications of your choices.”
© Institute for Family
Enterprising

Thinking Like Shareholders
Define their unique function and clarify agency relationships
Ownership
Management
Operations
1. Act within the functional categories
2. “Tease out” the functional categories
3. Create a distinct ownership function
4. Establish governance structures
5. Mentor successors in the functional categories
6. Plan transition within each of the categories
© Institute for Family
Enterprising © TELOS

Clarifying Roles & Responsibilities
Ownership
Legacy
Family Ownership Group
“stewardship”
Shareholder Group
“accountability”
Foundation
“service”
Board of Directors
“oversight”
Top
Management
“directive”
Shareholder
Responsibility
Employees
“task”
© Institute for Family
Enterprising
© TELOS

Clarifying Roles & Responsibilities
OWNERSHIP
Shareholder Group
•
Who are we?
•
Where are we going?
•
How do we get there?
• Newspaper headline exercise.
• Example: Cardone Industries
•
Empowered Board of Directors
•
Advisory Council
•
Association of Peers
•
Consultants

Clarifying Roles & Responsibilities
OWNERSHIP
Shareholder Group
Financial benchmarks and basic liquidity
•
Dividend Philosophy: 90% of profits reinvested
•
Growth Philosophy: Exceed industry standards
•
Profitability Philosophy: After tax net operating profit to = 5% of sales
•
Leverage: Debt : Net Worth not to exceed 1.5 : 1.
•
Sale: Must receive ownership approval to sell more than 25% of the value of the company.
•
Liquidity: Buy-sell agreement.
4.
Family involvement policy
•
Compensation philosophy: Equality or differentiated compensation?
•
Employment philosophy: Entitlement or opportunity?
•
Family roles and responsibilities: What is the role of a shareholder in our family?
•
Conflict of interest policy: Outside activities and ownership?
•
In-law policy: Will in-laws be allowed to work in our company?

Membership Value Proposition
1. Ownership-level Strategic Plan: Defining your shareholder agenda
2. Ideas that Impact : World class education
3. Next Generation Entrepreneurship: Skill assessment and professional development path
4. Peer based learning and benchmarking:
Affinity groups and networking
5. On-line learning: Network for Family Business
6. Implementation Support: Ownership, Board,
Management levels
7. Resources : Morgan Stanley, Price Waterhouse
Coopers, Saul Ewing, Creative Financial, AUA Capital,
SJU

Next time:
March 19: Competing in a Hyper-Competitive Global
Environment