Family Business Handbook

January brought the new Harvard Business Review Family Business Handbook, a comprehensive guide for how to build and sustain a successful enduring enterprise.

If you are in a family business, serve as a silent partner or board member, or are contemplating becoming part of a family business, this handbook is essential reading. And, even if you aren’t working in a family business, you’ll find the book enlightening because many best practices and learnings are transferrable to a non-family business.

Family businesses represent an estimated 85% of the world’s companies, and in the US, 5.5 million of these businesses employ 62% of the workforce. Understanding how these businesses work and how they contribute to the economy is critical for post-pandemic recovery. Therefore, that’s another reason to read the book.

Book authors Josh Baron and Rob Lachenauer take readers deep behind the scenes to share:

The secrets to longevity for family-owned businesses.
How to decode the family dynamics that impact business decisions.
How to plan for succession and navigate family transitions like marriages, divorces, and generational shifts.
How to navigate conflict in a family business before it spirals out of control.
Questions to ask before making the decision to join your family business.

Josh Baron

Rob Lachenauer

Today, the authors answered these questions:

What is the one thing most likely to derail a family business?

Many people think that too much conflict is what leads to the destruction of a family business, but in reality, it’s often too little conflict that ends up there. People are so afraid of conflict that they avoid making tough decisions, discussing what they truly value, or planning for the future of the business. In our experience, too little conflict is as destructive as too much. You don’t have to like everyone in your family business, but you do have to be able to make good decisions together if you want your business to endure.

What is the most important thing needed for a successful family business?

Can we offer three? We think there are three qualities that great family businesses have in common -- no matter what size, industry, or how many generations in they are: curiosity, adaptability, and teamwork. Those three qualities characterize most of the successful family businesses we know. They’re curious about how other businesses and families do things. They are lifelong learners. They’re willing and able to adapt to new business climates, to changes in the family, to industry shifts, and so on. And they understand the importance of working as a team. Great businesses know that family business is a team sport. You win together, or you can lose together.

What are your thoughts about a family owning a franchise business?

Many families own successful franchise businesses. It can be a terrific path for a family to build not only a business, but to keep a family connected and engaged with it for generations. Of course, franchises come with rules and requirements from the franchisor -- you are not as free to build the business in your own way as you might be if you started a business from scratch. Some franchisors, for example, require that only one family member serves as the owner/operator -- meaning one family member if officially in charge of that franchise. If a family wishes to share ownership among family members, that might not be the right path. Franchises can, however, be excellent vehicles for families. The particular business that a family owns doesn’t matter as much as how they approach ownership of that business, together. Are they building their business to be successful quarter to quarter or to last for generations?

Do you believe the pandemic will impact family businesses in any unique way?

Of course. There are almost no businesses that haven’t been touched by the pandemic in some way. But we think that family businesses are better positioned to endure the pandemic and then thrive on the other side. Family businesses are typically privately-held, so they don’t have to answer to anxious public investors. That means they can make decisions for the long-term, not just to squeak through a rough quarter or year. We see family businesses conserving cash so that they don’t have to make difficult choices, such as laying off loyal employees or completely shuttering businesses. We recently surveyed family businesses around the globe, and we found an optimism that they have weathered the worst and expect to gain ground in the months ahead. Sixty-eight percent of those surveyed believe they will have more efficient operations when the pandemic is over. And more than half believe there will be new business opportunities, more efficient decision-making processes, and learning opportunities for the next generation. In fact, a full 25% percent of those surveyed believe their market share will increase in the years ahead.

Should the HBR Family Business Handbook be required reading for all family members in a family-owned business and why?

Absolutely! There are so few good resources out there for the challenges -- and opportunities -- of owning a family business. And that’s in part because family businesses are poorly understood by the media and in academia. We spent years working on this Handbook to fill in that gap. We offer readers a unique understanding of how family businesses work, why ownership is so powerful, and how to navigate some of the common challenges of being part of a family business. We hope this book will help you understand not only family business in general better, but your own family business better. How can that not be a great thing?

Thank you to the book's publisher for sending me an advance copy of the book.

Comments

10 Quotes From The 5 Levels Of Leadership -- John C. Maxwell

Soon I'll post my full review of John C. Maxwell's latest book, The 5 Levels of Leadership . In the meantime, here are some of my favorites quotes from the book that I believe should become a must-read book by any workplace/organizational leader: Good leadership isn't about advancing yourself. It's about advancing your team. Leaders become great, not because of their power, but because of their ability to empower others. Leadership is action, not position. When people feel liked, cared for, included, valued, and trusted, they begin to work together with their leader and each other. If you have integrity with people, you develop trust. The more trust you develop, the stronger the relationship becomes. In times of difficulty, relationships are a shelter. In times of opportunity, they are a launching pad. Good leaders must embrace both care and candor. People buy into the leader, then the vision. Bringing out the best in a person is often a catal...

How to Be a Leader – 9 Principles from Dale Carnegie

Today, I welcome thought-leader Nathan Magnuson as guest blogger... Nathan writes : This is it, your first day in a formal leadership role. You’ve worked hard as an individual contributor at one or possibly several organizations. Now management has finally seen fit to promote you into a position as one of their own: a supervisor. You don’t care if your new team is only one person or ten, you’re just excited that now – finally – you will be in charge! Unfortunately the euphoria is short-lived. Almost immediately, you are not only overwhelmed with the responsibilities of a team, but you quickly find that your team members are not as experienced or adroit as you. Some aren’t even as committed. You find yourself having to repeat yourself, send their work back for corrections, and staying late to fill the gap. If something doesn’t change soon, you might just run yourself into the ground. How did something that looked so easy ...

The Psychology Of Leadership

I read many books about leadership and this book is one of my favorites. It’s The Psychology of Leadership by Sebastien Page . It offers a fresh take on leadership through the lens of groundbreaking research in positive, sports, and personality psychology. “Like exercise strengthens your body, practicing positive, sports, and personality psychology will make you a better leader,” says Page. The book blends research, fascinating true stories, humor, and self-improvement advice to deliver simple yet powerful principles to master the mental game of leadership. Page reveals timeless strategies for achieving lasting impact, fostering growth, and promoting well-being. He demonstrates how leaders and individuals can balance measurable goals with practical approaches to maximize performance and fulfillment. “Effective leadership is not merely about achieving measurable outcomes. It requires aligning goals with intrinsic motivations and psychological ins...

The Many Times You Should Thank Customers

In your leadership role, it's vital that your team members know how to deliver excellent customer service. " Knock Your Socks Off " type service as book editor Ann Thomas and Jill Applegate would say. Part of delivering excellent customer service is saying "Thank You" to your customers and knowing when to say "Thank You". Thomas and Applegate recommend telling your customers "Thank You" during at least these nine situations : When they do business with you...every time. When they compliment you (or your company) When they offer you comments or suggestions When they try one of your new products or services When they recommend you to a friend When they are patient...and even when they are not so patient When they help you to serve them better When they complain to you When they make you smile You and your team members can say "Thank You" : Verbally In writing (and don't underestimate the power of perso...

70 New Year's Resolutions For Leaders

With 2026 fast approaching, it's a good time to identify your New Year's Resolutions for next year. To get you started, how about selecting one or more of the following 70 New Year's resolutions for leaders? Perhaps write down five to ten and then between now and January 1, think about which couple you want to work on during 2026. Don't micromanage Don't be a bottleneck Focus on outcomes, not minutiae Build trust with your colleagues before a crisis comes Assess your company's strengths and weaknesses at all times Conduct annual risk reviews Be courageous, quick and fair Talk more about values more than rules Reward how a performance is achieved and not only the performance Constantly challenge your team to do better Celebrate your employees' successes, not your own Err on the side of taking action Communicate clearly and often Be visible Eliminate the cause of a mistake View every problem as an opportunity to grow Summarize group consensus after each deci...

How To Uncover Your Blindspots To Become A More Effective Leader

What you don't see about yourself can hold you back as a leader. That's typical for many leaders. What we don't see is what we can't see: we have blindspots . Your blindspots prevent you from achieving your greatest success. “It turns out that we're often not great judges of ourselves, even when we think we are. Sometimes we're simply unaware of a behavior or trait that's causing problems,” explains Martin Dubin , author of the book, Blindspotting: How To See What’s Holding You Back As A Leader . “Bottom line: until we uncover these blindspots, we can't move forward. The good news is that you can learn to do your own blindspotting .” “Most of us understand the idea of blindspots in a general sense—areas we can’t see, to take the term most literally, or places we have gaps that we may not even realize, to be a little more abstract,” says Dubin. “But in the context of this book, I’m defining blindspots quite specifically: They are the...

Leadership Lessons From A Serial Entrepreneur

Brad Jacobs’ new book provides you a treasure trove of leadership lessons from a man with more than four decades of CEO and serial entrepreneur experience. So, even if you don’t envision yourself wanting to earn a billion dollars, don’t pass up reading Jacob’s, How To Make A Few Billion Dollars . In the book, Jacobs defines the mindset that drives his remarkable success in corporate America – and distills a lifetime of business brilliance into a tactical road map. And he shares his techniques for: Turning a healthy fear of failure to your advantage. Building an outrageously talented team. Catalyzing electric meetings. Transforming a company into a superorganism that beats the competition. “This book is about what I’ve learned from my blunders, and how you can replicate our successes,” says Jacobs. He shares his candid account of the highs and lows of entrepreneurship. Jacobs has founded seven billion-dollar or multibillion-dollar businesse...

40 Timeless Lessons From Southwest Airlines

A few years ago, Southwest Airlines celebrated its 40th year and was kind enough to share in its in-flight magazine 40 lessons it learned since 1971. The lessons provide good tips for business leaders. If you missed the full list, here are some of the highlights of timeless lessons: Invent your own culture and put a top person in charge of it . A crisis can contain the germ of a big idea . Simplicity has value . For Southwest, simplicity means using 737s for most of its fleet, which makes maintenance more cost-effective and allows more efficient training for flight crews and ground crews. Remember your chief mission . Take your business, not yourself, seriously. Put the worker first . For Southwest, that meant being the first U.S. airline to offer a profit-sharing plan, in 1974. Employees now own 13 percent of the airline. The web ain't cool, it's a tool . Southwest was the first U.S. airline to establish a home page. By 2010, ...

70 New Year's Resolutions For Leaders

With 2024 fast approaching, it's a good time to identify your New Year's Resolutions for next year. To get you started, how about selecting one or more of these 70 New Year's resolutions for leaders? Perhaps write down five to ten and then between now and January 1, think about which couple you want to work on during 2024. Don't micromanage Don't be a bottleneck Focus on outcomes, not minutiae Build trust with your colleagues before a crisis comes Assess your company's strengths and weaknesses at all times Conduct annual risk reviews Be courageous, quick and fair Talk more about values more than rules Reward how a performance is achieved and not only the performance Constantly challenge your team to do better Celebrate your employees' successes, not your own Err on the side of taking action Communicate clearly and often Be visible Eliminate the cause of a mistake View every problem as an opportunity to grow Summarize group consensus after each decision point...

How To Be More Impactful Through Entrepreneurial Giving

This Thanksgiving as you think about what you are grateful for, think, too, about how you can be more giving. To help you discover a more giving you, read the new book, A Talent For Giving , by John Studzinski . It introduces the meaning of entrepreneurial giving - a hands-on approach to philanthropy that harnesses skills, expertise, and resources. Through thought-provoking insights, A Talent for Giving offers a powerful new roadmap for impact as Studzinski shows how anyone, regardless of financial means, can become a force for change. You do that by maximizing your Talent , Time , and Treasure and by embracing these values alongside others like Trust , Technology , and Trial , according to Studzinski. “Giving is any act of kindness or generosity that recognizes and respects the dignity of another human being,” shares Studzinski. “It can be something very simple – a smile, or a hug or a few words. And on a larger scale, it’s giving your time,...

Eric Jacobson On Management And Leadership

Search This Blog