Dr. Justin Anderson, Psy.D.

In an economy full of chaos and uncertainty, The Balance Point by Cary Tutelman and Larry Hause offers structure and insight to assist family businesses as they navigate through this transition by providing a step-by-step process for developing a healthy, high performing governance system. Clearly defined governance processes and structures can infuse confidence and wisdom into any family business system. The Balance Point, itself, provides the structure and guidance that owners and their advisors need.

The murky waters of a family business system which lacks both structure and an understanding of the roles of ownership, management, and the board can yield substantial obstacles for any business. Combined with the emotional component of a family in business, these obstacles may be impossible to overcome: witness the fact that nearly 70% of family businesses fail to transition from one generation to the next.

The Balance Point is a practical how-to guide to help family owned businesses overcome these obstacles. Tutelman and Hause employ real-world case study examples, easy-to-understand diagrams, and detailed observations to describe why some family owned businesses succeed while others do not.

This book will be a valued resource for any owner or advisor who works with family businesses. The authors focus solely on the family-owned, privately held businesses. They accurately assume that not all owners or advisors understand the ideal characteristics and responsibilities of each component in a family business governance structure. As a result, they start with “the basics.”
Chapters 1-7 define and describe the essential duties of each component of the governance structure (ownership, management, and the board) in great detail. The authors provide clear, relevant examples which highlight the essential roles of each component of the governance structure as well point out common pitfalls.

As the reader moves through each chapter, the topics smoothly evolve into deeper complexity and detail. For example, in chapters 8 and 9 the authors provide examples of how to ideally structure a board based upon a variety of variables that often arise within the family business, while chapter 10 offers further detail by highlighting the critical responsibilities of the board chair.
In chapter 11 Tutelman and Hause address advisors who work with family-owned and privately held businesses. They offer guidance and concepts for family business advisors from any discipline to consider while engaging in their work within a family business.

Overall, The Balance Point’s primary focus is to help the reader learn how to successfully integrate the values, needs, and goals of ownership with the values, needs, and goals of management. The authors contend that “understanding The Balance Point is key to running a successful business, and transitioning the balance point is key to transitioning the business successfully.” (Page 3). Tutelman and Hause suggest that an effective board is the balance point. If the governance of an organization is properly educated on the ideal roles and functions of ownership, management, and board, the board will integrate – balance and align – the values, needs, and goals of ownership and management. This requires that the board members have the right knowledge, skills, and abilities to insure that the board is capable of supporting the organization at the balance point.

The Appendix includes guides and worksheets that can be used by advisors, owners, or other members of family business to steer transitions. The appendices and worksheet topics range from the guidelines and questions to develop an “ownership plan” to worksheets that can be used to “evaluate board members.” Advisors will find this immediately useful in their practices.
Many of us who work within the family business field understand that trust and respect within a family-owned business is an essential ingredient required to produce a healthy family and business. One path to increasing trust and respect within a family business is to have clearly defined roles and responsibilities. While Tutelman and Hause reinforce this idea by stressing the importance of understanding the unique roles and functions of each aspect of governance, they provide a valuable template to assist the development of governance structures that balances the values, needs, and goals of each aspect of leadership. Finally, The Balance Point fills a gap in the family business consulting literature by deepening the knowledge base of how family business governance can optimally function. It will serve as a much-referred-to resource for advisors and owners alike.