Ombudsmanship and The Family Business

15 May 2011

In my “other practice” I just completed an 8 month-long “turnaround” of a small family owned manufacturing and distribution business.  Key to the final success was the smoothing out of a bumpy road at the beginning of the project by utilizing ombudsmanship with stakeholders by the owners. I’ve written in previous articles and defined “ombudsmanship”. Ombudsmanship is being asked for more and more in job descriptions and is similar to “sportsmanship” in that it’s a “soft skill” or quality that the individual brings with them and is aware of at all times in their functional responsibilities of their role or position.  Ombudsmanship is usually delivered “incognito” by the individual utilizing ADR style skills with individuals, teams, groups both intra or inter organization in terms of the individual and group dynamics.  In this business “case” I’ll go over some of the key methods and techniques where ombudsmanship was utilized as part of the engagement and was the “key difference” to success versus the absolute collapse and loss of a three decades old family heritage.

My role was as a business coach, consultant, ownership advisor and conflict management coach to owners. I’m also very aware, from mistakes I made in my “apprentice” years that focused only on the financial bottom line, that changing any business culture is more about conflict management than just business “metrics” and that focusing on conflict management as a priority in all “engagements” will get the metrics or results needed “indirectly”.  It’s a “given” that in any organization there is a culture with regards to the dynamics of intra and inter personal relationships that employees have based on their personality characteristics.  This is even more so for a family business operating for three decades.  So the balance to be struck is to use the inherent culture of the business and resulting conflict as the OPPORTUNITY to “shift the paradigm” towards a consistent “in the black” financial outcome while PRESERVING stakeholder relationships critical to function and revenue.

My point of contact was the oldest son with some ownership meetings with the mother and father who also worked day to day in the business.  The son had worked the business for many years and had an accounting degree, but now, parents had declared they wanted to “retire someday” and make the transition.  Unfortunately they made this declaration one full year AFTER the “economic collapse” began and the books started going “red” in gross revenue.  They tried for one year, all of 2009 to get back in the black, but couldn’t and turned to their son.  This “set the stage” for some real conflict and drama on a daily basis and is most likely the same for thousands of businesses today.  Armed with a business case history interview we began.  Some, not all, of the concise steps below:

  1. Put it on the table that there is going to be a shift in the culture of the company to “survive” and that there will be conflict in the chaos that will result in profitability IF “management” can apply new methods in functional systems CONSISTENTLY day to day.
  2. Map the organizational “dynamics” and structure for purposes of awareness in an informal internal family operating environment.  Recognizing that there are functional business structure as well as informal familial, age and gender dynamics evident where older employees and newer younger staff conflict (generations) where employees are treated as family; and where formal education is replacing informal apprentice style training and applying of skills, knowledge and wisdom.
  3. The map had intra-organizational structure of: son and both parents core administration, manufacturing and distribution department, marketing and sales with external road warriors and internal sales staff.  This map was typical in that manufacturing and sales rarely socialized or communicated “intra-department”.  Each employee was subjectively “assessed” for personality characteristics at the beginning and during ongoing changes so as to provide situational awareness and decision support regarding “status” and needed outcomes.
  4. The map had inter-organizational structure with partners, vendors, suppliers, stakeholders in the immediate community.  The “linkage” or nexus was identified again for purposes of situational awareness on identified potential conflict as changes unfolded.
  5. Provide conflict management information and coaching of the son as the new President and General Manager including keeping a journal of conflict events as they arise.
  6. Discussion of “applied” techniques and emotional support for management including identification of incremental successes, though they may appear to have a “negative” outcome.  This included KNOWING when to let events play out with employees, immediate intervention versus “sleeping on it” daily cycles and then observing over two week increments the decision results.
  7. A very favorable “ad hoc” look at results where several staff simply left the company in the exact departments and slots where the “next generation” of educated employees could fill gaps and form new “blended teams” with long established family business “members”.
  8. Key was incremental success with recognizing conflict is in the moment, to let it play out, identify employees who cannot adapt and work with them on “what they wish to do”. Identifying employees as “champions of change” and giving them influence roles. Adopt formal communication, cooperation and coordination cycles in the form of projects and monitor individuals behavior.  Getting confirmation from “parents” that the chaos has turned out well at various stages and the company is evolving while the bottom line returns to profitability again.  This provides “confidence” in the son to lead and was directly discussed and kept in focus with relation to “desire to retire someday” as a goal while demonstrating “real life” favorable bottom line outcomes.

In conclusion it’s important to note that the business related methods and solutions were not discussed here, but that the constant awareness for the potential for conflict in key functional positions would “trigger” emotional events.  We also gave owners the message to constantly motivate employees is that, “we have to do this or there won’t be a company anymore and thus a job either”.  I’m certain “variations” of this message were constantly given, including recommended “memos” with each employee signing off that they acknowledge the gravity of the situation in today’s economy.  Keeping this as the ‘prime goal’ for employees to focus on at all times, while monitoring conflict related to implementation of solutions that forever changed the organization resulted in 13 jobs saved, 2 new jobs (one in each department), 1 outsourced function, restoration of 4 figures “in the black” net profit monthly within 2 months of launch and new-found “confidence” for EVERYONE in the company as to what they achieved is a favorable end result… is it not?


Ombudsman ADR: “Factual Context” Technique

22 August 2010

Normally, by June or July, I like to do something on trends for the year and 2010 trends are something very different from 2009 and all my my previous experience with dispute or conflict management “internally”.  Contacts with individuals is up, but actually getting to the table or taking an engagement is down considering the ratio of contacts to intakes.  There is a variety of contributing factors, but I’d like to take this moment to focus on something to help anyone in our “craft” keep a handle on the turmoil and chaos they may be experiencing with “potential” clients.

It’s no secret by now that there is a lot of economic chaos happening as we speak and this adds exponentially to individual and group stress resulting in conflict.  My projections for small and medium sized business at the beginning of the year, unfortunately, are proving to be even more serious than I could have “existentially” imagined.  Large corporations are another situation all together currently, with both positive and negative impacts on individuals and communities “they serve”.  It’s tough, it’s hard for everyone, even the “elite” are complaining they didn’t get their full “due” when they had to step down, getting only half their millions instead of all that their interest was worth two years ago.  Currently, as I’m contacted, the issues revolve around “survival” of the business, employees as “family” now, while maintaining some, I repeat, some level of courtesy and decorum.  Regarding partner relationships between contracted employees, long time customers or supplier companies they had contracts or agreements to do business with, these are simply dissolving rapidly.  As I read the news and “listen” to what comes in, clearly there is a split down the middle and the normal bell curve one would expect to reflect the middle class income bracket is now inverted, but it’s more than just a “dip” in the road.

Our frustration has been to communicate clearly, get a good intake, listen carefully, but invariably emotions, anger, tension are more at the “surface” of what someone may have to say about their struggles and establishing any form of “factual context” concerning what basis they have for a complaint is exaggerated, embellished and misrepresented oft times.  Continued “cycling” with a focus on “lesser emotional struggling” and pointing out that perpetuating the “struggle” will not get to a goal they want.  I find myself, in trying to be altruistic and proactive for them, becoming more of just a “listener” while refusing to take the role of “anger management” counselor.  Keeping with “factual context” can circumvent the individuals emotional struggles, anger and even depression and provide the context to focus on their goals as a solution to the problem and establish again or learn to “own” an ethical approach again.

As a technique towards a “permanent” solution, it doesn’t always work, but to cut through the emotional chaos of the moment, we find the following has helped:

  • Frequently remind them in the interview that we need to document the factual context of the dispute.
  • More patience is required at this moment, but they can speed things up if they can just relax and focus on our exchange.
  • If I hear something potentially out of context, make a note and check it again after some time has passed.
  • Ask them to slow down and “reflect” on their statements and determine if they “ring true” or is something else happening.
  • Can they produce any material that supports a factual context versus their emotional declaration in the moment.
  • If detected in the “cycling”, ask them to check themselves to see if they are reverting back to “emotional struggling” again.
  • Asking if they see themselves contributing calmly to a solution and even questioning if they want that or something else.
  • Creating “factual context” list as their constant reminders prior to “shuttling” and/or them contacting the other party.
  • Ask them to meditate or contemplate in quiet, their situation and then contact us again after 48 hours.

Yes, I’ve written about the “blue ocean” of opportunity many times and it’s certainly over flowing currently, not just on the OO side, but in my other business consultancy also.  I have to admit, as busy as things are, it can get or am overwhelmed lately and for the first time I have to watch my energy, not get drained or let “burn out” take over.  I have to watch my own “tensions” with family and friends more, how about you?  Focusing on and firmly addressing and discovering the facts about their issue related to the context of their situation has proven a good technique or method to help keep a sustained focus; thus bringing “order from chaos” as best as possible.  It prevents excessive levels of “complexity” being introduced also, because often individuals want to discuss more than what can be handled and go out of “context”.  I hope these trend observations and discussion will help all who read it here as we are going to be more challenged than ever in months and years ahead to “make a choice” to peacefully resolve disputes/conflicts or polarize and damage personal, business and economic relationships; possibly beyond repair.


The New Ombudsperson: Corporate Business Abuses

1 May 2010

I don’t know what it is exactly, but a significant handful of my “independent” OO work comes from Canada.  Consumers, businesses and subjects of the Crown have no problem with emailing me in Tulsa and laying it all out on the table.  The common thread and trend is most often “unfair” corporate or institutional practices where the very rules and contracts that are suppose to be honored by “both sides” seem to be changed on a whim or ignored out of convenience; both in the USA and Canada.  This type of situation is very widespread and the more “powerful” prevail by making the rules and then punishing business customers without consideration for the economic downturn or demonstrating ethical practices.  In fact, I would question whether large corporations or institutions currently support consumers and small business interests or are they now more of a threat?  It’s very “brutal” out there right now and getting worse.  Indeed, my practice has been shaped by the “trend of the times” so as to be a truly “independent” entity in facilitating disputes and most often “advocating” for the disadvantaged consumer or partner in a less than ethical relationship with a more powerful corporate or institutional entity.

In a recent case early this year an auto repair business in Alberta first emailed and then called me about a dispute with their bank over their merchant card and POS (point of sale) equipment in their business.  The client had, at the beginning of 2010, made a change of location for their business taking a smaller repair facility than what they had previously.  They had rightfully made moves for their survival given the economy and future projections of a more lengthy “recovery” than government “propaganda” will admit.  Being a good and ethical business too they notified their “big bank” that they had their merchant services with, that they were changing locations, filed an online form to make the change, new business checks, the whole package.  Initially the connecting of the equipment to telecommunications lines for card processing continued without any problem and then about 60 days later a NOTICE came that their account had been reviewed and that they had broken the terms of their agreement and a new contract was to be signed immediately.  Nope, no collaboration, no phone call, nothing… we are all so familiar with this “method” as consumers… are we not?  The client initially did their best to try and determine which part of the contract had been violated so as to trigger the forced termination of their current 3 year agreement, of which they were 2 years into, and the warranted reasoning for a new contract for a longer period, with significant rate increases and no upgrade in services or equipment.  This went on back and forth for about 30 days and then “service” was cut off by “big bank” in Alberta.  To make a very long story short, we reviewed the documents/agreements, current online merchant offers and tried once again to engage the bank of which they refused us as having any LEGAL authority to engage them.  The client also provided a copy of an email where the “big bank” ombuds team “only considers complaints about consumer products and investments”, not merchant services.  Additionally, I could have guessed this part before calling, Ombudsman Banking and Investments for Canada did talk with us and the client in a conference call and “merchant services” are not under their auspices and they could give no other authority or alternative for filing a grievance.  This case yet again confirms “gaps” or areas of practice deemed off limits as dictated by corporate or institutional policy rather than having a policy to address any issue a customer or constituent may have.  This needs changed.

On a personal and rational level, what strikes me most often, is the “double speak” we hear in the media versus what is really going on.  In this case “big bank” had no problem cutting off the “life blood” of the business, debit and credit card transactions, in what was still technically a valid agreement.  It was at this point my OO services were over and I had to rescue a business using my years of wisdom in my “other practice” to keep them alive.  A solution was formulated and implemented in hours with  some built in redundancy and the client was back collecting payment for services rendered.  The case is still open and I told the client they really won’t press this issue until year 3 is up, but if they contact them further, contact me and then cooperate if they want the hundreds of dollars in used POS equipment back.  Don’t take it to them NOW, wait till the contract is up, keep it connected if you can.  And so it goes for now…

I have long said that to really be a good Ombudsperson in today’s world you have to first be very ethical and have a good level of courage to engage in a sort of modern day David and Goliath scenario.  The “external” organizational ombudsperson has plenty of “Blue Ocean” opportunity out there, probably won’t make the fee they would like, but can gain a high degree of satisfaction in their work.  I can report that I am working twice as hard as ever to make less income than previous years, but still, it’s rewarding to be “of service” to others.  Also, these “trends” are not over as the media tries to tell us and as a “Second Wave” of recession/depression approaches.  In my projections I predict this will continue for at least the next 3-5  years as the “common people” get pushed down and out and the “elite” as powerful institutions, continues to “consolidate power” in the newly identified “corporatocracy” and other supporting professional entities align with it.

I sincerely hope that you are “inspired” to make a difference, be proactive on a media story, and grapple with “the right thing to do” in your choices in your own practice; ethical, courageous and altruistic for your clients… it is sorely needed.


Before You Lose Your Job

21 January 2009

In today’s economy our position in life is uncertain, fearful and even chaotic.  Even “the best” people, or so we are told, are losing their jobs.  As an Ombudsman it’s not up to me to make judgments about an issue, but rather to “mediate” on behalf of both sides after ALL of the information has been gathered, organized and reviewed by a team of at least 2 members.

I have seen situations that persisted for years and the employer made “concessions” to keep the employee contributing, but at the same time suffering loss or damages in other areas.  The employer would say they have “considered” the “burden rate” versus what the employee actually earned for the company and it stayed favorable.  In other circumstances though, that little edge or “differentiation” that kept them employed erodes and looses leverage over time and in a variety of ways.

In this case, the employee can contact an Organizational Ombudsman and ask for “a second chance” in hope of a reprieve.  In this scenario, who pays for the service needs sorted out because most often the employer will contract us, but in the above circumstance they may not.  Our job is to simply first get communication started, initial conversations to see if both sides are “open” to reconsidering what is “immanent”.  If this is possible and confirmed verbally, by say HR, the immediate “manager” and the employee, we get “permission” to move forward.

In this circumstance statistics are from the 90’s era, but more than half the time an OO is successful in resolving the issue.

Be careful out there if you think economic circumstances could “force” an employer to let go of “lesser” people than those top performers with millions in “parachutes” and severance packages.