Category Archives: Paradox

Just Like Her Dad, part 2

Amy Schuman
Amy Schuman

Earlier this week we presented the case of ‘Jennifer’, who joined the family business two years ago. The COO reported that the executive team was excited about Jennifer because she was “Just Like Her Dad”. We posed the question to you: Is this a good thing or a bad thing?

Well, let’s take a closer look. What are the upsides of Jennifer being Just Like Dad?

   *Dad’s approach is proven – why fix something that isn’t broken?

   *Dad’s approach is familiar – the entire organization, as well as customers and suppliers, are already comfortable with this leadership style.  Continuing in this vein will be minimally disruptive and comforting to the larger organization.

   * Values and legacy – a great source of pride and competitive advantage – will be preserved into the next generation.

Can we list any downsides of Jennifer being Just Like Dad?

  *If Jennifer assumes she is being invited to act with the same authority as her dad, she is headed for trouble.   Making pronouncements (like Dad) or taking special privileges (like Dad) without clearly earning the right to do so, will surely lead to trouble.

  *Jennifer is a unique individual with her own talents and abilities. Rather than aspiring to be a clone of dad, she should pursue her own leadership style and let her own light shine forth.

  *Unlike Dad, who always operated as a sole entrepreneur, Jennifer is accountable to a large cast of characters. The ownership group is now larger, and multi-generational. The organization is more far flung with an ever-expanding group of stakeholders. Jennifer’s role as leader will require more consensus building and communication, and calls for a whole constellation of skills and efforts that were not required of the founder.

We are clearly looking at a paradox – two desirable approaches that appear to be in conflict.  Our analysis tells us we need a both/and approach. How can Jennifer be ‘Just Like Her Dad,’ and, at the same time, be her own person?

Stay tuned for Part 3 of this exploration – and if you have any further thoughts about this dilemma, we’d love to hear from you!

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Just Like Her Dad, part 1

Amy Schuman
Amy Schuman

Recently, the COO of a large family business told me that he was really excited about the daughter of the current CEO who had just celebrated her second anniversary with the company. The daughter, who we’ll call Jennifer, had followed the family employment policy to the letter and was now moving through the organization in several key learning positions.

“She’s just like her Dad”, the executive happily reported, with clear relief.

Later in the day, I found myself pondering that remark. Is it best for the family business when the next family leader is ‘just like’ the one that came before? Or is it better for the next generation leader to take a different approach?

Also – what is best for this young woman? Should she model herself after her father, the successful founder of a company with global reach, supporting thousands of employees on several continents? His approach clearly was successful, why would she do anything different? Is her main task to study her father closely, and dedicate herself to perpetuating his proven leadership style, or should she follow the beat of her own drum?

I would love to hear your thoughts on this question – and we’ll take this discussion further in a post later this week. What’s been your experience – do you look for someone just like the current leader, or someone very different – why?

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The Paradox of Fixed and Flexible: How to be More Like a Palm Tree

In my last posting I talked about the advantages of being both fixed and flexible and promised a few specific examples. 

Let’s start by taking nature as our role model in this regard – trees that are both strong, deeply rooted, clearly bounded, and yet flexible enough to withstand high winds and driving rains. Imagine a palm tree bending and swaying in even the most chaotic weather conditions.  How can we create family businesses with that wonderful combination of strength and suppleness?

 

  • Build in regular opportunities for reviewing and updating family policies, structures and agreements. Don’t’ assume that the current approach will be the best forever. As time goes on, you will learn what works and doesn’t work – expect that things will change as time goes on. Some families even build in sunset provisions for agreements that force the family to get together and either affirm or alter existing policies.
  • Learn more about Fair Process. As described by Ward and Carlock in their Parallel Planning book, Fair Process requires both consistency and changeability. Families that find ways to honor both of these characteristics create approaches that all recognize as fair.
  • For family involvement and employment policies, plan to provide more flexibility for younger children (pre-college age) and more fixed rules for older children (post-college). Within the policies, some aspects are mandatory (we require all family applicants to complete a college degree) and some are flexible (we encourage family applicants to complete at least one summer internship while they are in high school or college).

There are many more examples of approaches that are both fixed and flexible. Perhaps in a future blog we should provide unfortunate examples of families going too far to one side or the other – being either too rigid or too loose.  We’d love to hear about any examples from your experience….

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Paradoxes found in the Jewish New Year parallel many Family Businesses Paradoxes

Amy Schuman
Amy Schuman

Starting at sundown last Wednesday night, Jews across the globe ushered in a New Year, specifically the year 5772. It struck me again this year, how many tensions and contradictions are found in the traditions surrounding the holiday. These paradoxes echo many of those familiar to family businesses and quite a few that are described in Family Business as Paradox which I co-authored last year with John Ward and Stacy Stutz.  

For example, as we contemplate the yet-undiscovered possibilities of a brand new year, we are brought up short by a major theme of the New Year’s service: Teshuvah  or ‘return’. How is it that a new year begins with a ‘return’?  Upon reflection we realize that meaningful new efforts are rooted in the legacy of the past. They are shaped by the treasured values and lessons learned by those that came before us.

This tension is a major theme for family businesses that must find ways to honor both tradition and change.  My co-authors and I have been inspired by many family enterprises that grapple with this paradox, notably Beretta and   Cargill.

There are other paradoxes with resonance for family enterprise – for example, the tension between structure/rules and spontaneity/intention*. As with all religious observance, there are plenty of rules related to the holiday, and proper observance is spelled out well in advance. However the tradition also makes clear that observing the law alone is not enough – one must observe with an intention that embodies trust and respect, and that resonates with caring, even passion.

Family enterprises also wrestle with a similar tension.  Policies and rules are essential– for family employment, for compensation, for ownership. However, they can’t stand alone. They have to be partnered with the right intention – the right relationship.  And they are best when infused with real commitment and passion. Although it may seem impossible, families must find a way to approach policies and practices in ways that are both fixed and flexible.

I’ll share some real world examples in an upcoming post. In the meantime, do you have stories to share about these familiar paradoxes?

*Known in Hebrew as keva (fixed structure in ritual, fixed texts) and kavana (intention, focus, concentration).

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What They Think in Brazil (Part 2)

by Stephanie Brun de Pontet &
John L. Ward

We continue to share the results of a survey of 100 significant family firms in Brazil which were part of a program hosted by HSM, a program we were very privileged to lead.

Shirt Sleeves to Shirt Sleeves…

What do they think are the greatest challenge to family business continuity?

  1. Senior generation “Letting Go” (29%)
  2. “Sibling Rivalry” (17%)
  3. Business challenges (16%)
  4. Cousin differences and indifference (16%)
  5. Nepotism (12%)
  6. Attracting non-family talent (8%)

Family Education

The most common education initiatives at their family meetings were:

  1. Family history and values (38%)
  2. Understanding the business and industry (31%)
  3. Improving family interpersonal skills (24%)
  4. Financial literacy (7%)

Most surprisingly, 49% had more than one family meeting per year!

Problematic Paradoxes?

We asked what was their most perplexing paradox as a family business:

  1. Change and tradition (27%)
  2. Selective and inclusive (25%)
  3. Fair and equal (18%)
  4. Freedom and loyalty (16%)

With special thanks to HSM, Brazil for encouraging the survey and for their dedication to family business education.

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Protecting Next Generation Often Has Opposite Result

Craig Aronoff

I’ve recently been dealing with a number of family businesses where the “next generation” is already in their 40s and even 50s and whose parents are “protecting” their children.  Protection comes in several forms:  providing lots of money; bailing them out of trouble; giving them jobs in the family business with little or no accountability for behavior or performance, and the like.  As one family business business leader put it:  “I want my children to be accountable — I just don’t want their feelings hurt.”  Paradox aside, the result can be a next generation full of entitlement, unprepared to rise to the responsibilities of management and/or ownership, and oblivious to their own shortcomings.

New York Times columnist David Brooks recent column aimed at new college grads sound a similar note.  He describes current graduates as “members of the most supervised generation in American history,,,they have been monitored, tutored, coached and honed to an unprecedented degree.”  Brooks points out the mismatch between the mindsets and skills learned under such circumstances and those required for success in an environment “requiring a different set of skills which they have figure out on their own.”  

Self reliance is the key and it is difficult enough to develop in affluent young people even when the conditions are right.  The ability and confidence to figure out which problems need solutions and how to go about developing and applying solutions are essential to successful family business leadership.  Such skills and attitudes can be developed only with the opportunity to make and implement decisions, to get rigorous and unvarnished feedback, and to be explicitly held accountable for behavior and results.  Young people held to high standards won’t always feel “happy” with such discipline.  They may even decide (or have it decided for them) that a career outside the family business is a wiser choice.  In the long run, such decisions are usually best for all involved — the young person, the parents, the family and the business.

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In Brazil, Celebrating Some Paradoxes

Grupo Simtnes has been part of Brazil’s Amazon environment for more than 65 years. It seems to thrive on two paradoxical principles:

“With eyes set to the future, but without neglecting its Amazonian roots…”

“A mysterious and fascinating region that asks not to be explained but to be understood…

“Differences are blown away by the winds in the daily chants performed by leaves and waters.

“Chants which govern [our family company]…conciliating ecology and development, technology and myths, future and ancestral past, modernity and primitivism.

“Encounters of opposites…which have guided the actions of Grupo Simtnes ever since its birth.”

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New Chicago Mayor Faces Old Dilemmas and Paradox

After 22 years of Daley “Junior” family leadership, Chicago has a new mayor, Rahm Emanuel. One debate he faces is whether to focus on center city development to keep the neighborhoods relevant or to focus on the neighborhoods which will support the center city.

With the skill at dilemmas, polarities and paradoxes – so natural to family business leaders – he says,

“My duty is that I’d love us to get behind this stale debate of either/or… because there’s such synergy…

“I’m looking for cooperation that we can all win…

“There are win/win moments.”

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Innovation vs. sticking to your knitting: another family business paradox

Jennifer Pendergast
Jennifer Pendergast

In a yesterday’s post, I shared a lesson from a study of large, old, successful family businesses – innovation is a key to success.  But, while companies in this study demonstrated an ability to innovate, they also clearly recognize their core competencies and stick to them.  So, we uncover another family business paradox – trying new things vs. sticking to your knitting.  How do we resolve this paradox?  As with all paradoxes, the answer is “both and” not “either or”. 

Successful family businesses are willing and able to try new things, but they select carefully when they branch out.  They choose new business areas that leverage prior knowledge and skills.  Sure, occasionally the businesses in the study branched out well beyond their comfort zone.  But, when they did they often did it with a partner (more on that in a future post).  And, many of the businesses were currently in the mode of paring back their portfolio to focus on what they do best, then innovating around that core. 

The key to successfully executing this strategy is to clearly understand what your competencies are, the ones that clearly differentiate you from your competitors, and how you might use them to take you to new places.  The fact that family business owners provide patient capital creates the opportunity to build and leverage these core competencies to their greatest potential.

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Kate, William and the Paradox of Governance

There’s a terrific essay in the May 1 Financial Times (“Dynastic lessons from the familial Windsor flourish,” by Simon Schama).  I paraphrase it to highlight some fun family business insights. But it’s better if you can read the essay in its full brilliance.

The British royal wedding, the author presents, reminds us of some fascinating dimensions of governance and leadership – even illustrating some of the current mid-east revolutions.

  • Dynastic leadership works when there is a balanced blend of “majestic difference” and “bourgeois familiarity”.  If it goes too far out of balance effective governance suffers.
  • Put another way, leadership draws on both the basic human need for revenue and affection.
  • This view raises the whole classic debate of whether the natural form of governance is patriarchal or representative democracy.

The author proposes the paradox of needing mystique more and more as democracy and capitalism bring less of it.

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