Monthly Archives: October 2019

10/12/19

On Taking Initiative

“The only way to get initiative is to take it. It’s never given.”[1]

That’s the statement Seth Godin begins with in “Initiative” his October 10, 2019, blog entry. Initiative would seem indispensable for success in business. But I’ve often found it lacking among family-business leaders when it comes to planning for a multi-generational future.

Over the course of my career as a family-business consultant, I’ve spoken with heads of third- and fourth-generation family businesses about their plans for transitioning the business to one of their children. I’ve asked what they thought the business and the family might look like when their children are leading them.

In answer to this question I’ve been told by that their focus is on surviving, one day at a time. They told me that thinking about the future is not possible right now. Of course, I’m not arguing with the importance of their assuring survival. But I’m convinced that for them, thinking about the future is less ‘impossible’ than they say, and more ‘uncomfortable.’

That’s unfortunate. And it takes initiative to go beyond this. But…

“From an early age, most of us were taught to avoid it. Do your homework. Take out the trash. Wait to get picked. Wait to get called on. Become popular. Fit in. Maybe stand out, but just a little bit. Failure is far worse than not trying.”[2]

Successful multi-generational family businesses recognize the need for developing next-generation leadership early. They’ve built in the ‘initiative’ to do so.

The initiative for planning succession in a family business starts simply—with a conversation. Then another and another. These are big conversation to be sure. Together the family learns about itself, its values, its strengths and weaknesses, and about its vision for future generations.

These conversations can be daunting. They can be uncomfortable. They can be confusing. But to build generations of family-business survival and success they must be initiated.

 

[1] Seth Godin. Initiative. https://seths.blog/2019/10/initiative/

[2] Ibid.

10/6/19

Family Businesses Have More Women Leaders

According to the Pew Research Center, the percentage of female Fortune 500 CEOs reached an all-time high of 6.4 in 2017 (32 out of 500) and fell to 4.8 percent in 2018 after several women left those roles. With women comprising at least 40% of the world’s workforce and half of the population, it’s remarkable the number of women CEOs is so low.

In family businesses, it’s a different story. Ernst & Young (EY) surveyed the largest family businesses from top global markets. They found that the world’s largest, longest-lasting family enterprises are advancing women further and faster that their non-family counterparts. Specifically, the survey revealed the percentage of women in top management to be 22% and board membership, 16%.[1]

The difference begs the question why.

One reason is found in the long-term perspective of family businesses. They are more conscious of preserving a family legacy than an individual’s legacy. This coincides with the fact that in a family business a CEO’s tenure is longer than in a public company—an average of 20 years compared to 6. EY suggests that longer CEO tenures may serve to break down conscious and unconscious biases against women by giving company leaders more time and opportunity to witness women’s contributions and accomplishments.

Family-owned businesses are also characterized by their focus on people and relationships, in addition to profits. Their more social and broader purposes help family members and employees engage with each other, the company and their community. These priorities are largely accepted as inherent in females leaders.

An article published by Women in Family Business (WiFB)[2], adds to this perspective, stating:

“Family businesses are often more socially conscious than their non-family business counterparts. They are more likely to hire people and less likely to lay them off, more likely to support their communities, and far more likely to be concerned with the long-term health of their communities. And they are not as concerned with quarterly cash flow and profits, likely because they operate with far less debt. This is truly a family-motivated attitude — what kind of leaders put their families at risk?”

Further, family businesses, by definition, blur the lines between work and family. And men today, more so than in past generations, are sharing the responsibility of balancing work and family obligations–issues that historically have been seen as women’s concerns. The result, more women in leadership roles, further balancing societal benefits.

[1] https://www.ey.com/en_us/growth/how-family-businesses-are-embracing-women-in-leadership

[2] https://www.womeninfamilybusiness.org/women_and_family_business_good_for_one_another/