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

Coach Campbell's Leadership Principles And Winning Approach

Trillion Dollar Coach is about Bill Campbell , someone you likely never heard of, who coached several of the biggest names in Silicon Valley during a 16-year tenure, and who’s behind-the-scene wisdom helped created over a trillion dollars in market value. Authored by Eric Schmidt , Jonathan Rosenberg , and Alan Eagle , they share that from Steve Jobs and Dick Costolo to Larry Page and Sundar Pichai, these big names in Silicon Valley give credit to Campbell for much of their success. Campbell, who died in 2016, started his career as a football coach at Boston College and Columbia then switched to business in 1979. As leaders at Google for more than a decade, Schmidt, Rosenberg, and Eagle had the benefit of experiencing Campbell’s executive coaching firsthand. In addition, for the book, the authors interviewed over 80 people with whom Campbell also worked. Through stories from those interviews, Trillion Dollar Coach features specific strategies and action ste...

The Phoenix Encounter Method For Leaders

“All businesses sooner or later face the need to reconstruct their future,” explain the authors of the new book, The Phoenix Encounter Method . “They will need to destroy part or all of the incumbent business model in order to build their breakthrough, future-ready organization.” Therefore, this book shares a new method of leadership thinking – the Phoenix Encounter – relevant to all organizations in today’s ever-changing environment. Readers will learn how to proactively bridge the gap between perceiving a threat and doing something about it. Written by three INSEAD professors ( Ian C. Woodward , V. “Paddy” Padmanabhan , Sameer Hasija ) and Rum Charan , you’ll learn the steps needed to create a wider range of options to: Defend your organization Fortify its core business Build specific renewal initiatives The steps are grounded in transformation that includes these three elements : The Phoenix Attitude : a set of mindsets, habits, and behaviors that allows a leader to ...

Find The Truth In The Middle

If you're a parent of two children you already know that when the two are fighting and child #1 tells you what happened, you then ask child #2 what happened, and most often the truth is somewhere in the middle of what the two children have told you. Surprisingly, many managers, even when they are parents, don't use this parenting "discovery" skill in the workplace. Instead, they often listen to only one side of a situation. Whether it is because of lack of interest or lack of time, they don't proactively seek out the other side of the story. The unfortunate result is those managers form incorrect perceptions that can often lead to poor decisions and/or directives. So, the next time two employees are at odds, or when one department complains about another department within your organization, take the time to listen to all sides of the situation to discover the truth that's in the middle .

How To Conduct A Successful Post-Merger Integration

Most business leaders think that mergers fail because of bad strategy or overpaying. But according to former senior partner at McKinsey and Harvard Business School’s David Fubini , that’s not where deals break down. They fail in what comes during and after integration. More specifically, “Integration is what makes or breaks the success of a deal. Not design, not financing, not due diligence, not negotiations of structure,” says Fubini. “Because no matter how expertly you manage these elements, if you can’t bring all the pieces together, all your efforts might as well have been an academic exercise." Fortunately, in his new book, Post-Merger Integration: Building The Mindset, Skills, And Discipline Needed For Deal Success , Fubini (along with Patrick Sanguineti ) offers a behind-the-scenes look at how deals actually succeed and where they go wrong. And he shows leaders how to develop an Integration Mindset that will enable you to navigate the complex, nuanced reality...

The Leadership Playbook Of Bill Campbell

Business And Life Lessons My Father Taught Me

I post this every year on or near Father's Day because the business and life lessons my father taught me stay with me forever. What he taught me has served me well--even lessons I learned when I didn't at the time necessarily realize I was learning from him. So, I thank my dad for teaching me the following business and life lessons : Listen - Growing up, I thought my Dad was perhaps shy or quiet. Really, he was just a great listener. I believe that's what made him so wise. He would listen to anyone. Young or old. New acquaintance or friend. Provide - My Dad provided for me. Music lessons. Vacations. Summer camp. Boy Scouts. He gave. He put others' needs first. Today, I find in volunteering likely the same satisfaction he felt when he provided for his family. Educate - My Dad's passion was education. He loved to learn. He loved even more to teach. He lived to help other people learn. In the workplace, providing learning opportunities is one of the most powerful ...

A Playbook For Authentic Human Leadership

Julie Averill , the CIO behind lululemon’s rapid growth from $2 billion to $10 billion shares in her new book, Chief Impact Officer , a roadmap for executives and technology leaders navigating today's AI revolution and reveals why authentic human leadership is your competitive advantage. Prior to lululemon, she led omni-channel and digital transformations at Nordstrom and REI, navigating system failures, crises, and the complicated work of integrating technology with business strategy at scale. “Technology doesn’t transform companies. People do,” says Averill. “AI will amplify whatever leadership exists, strong or weak. The goal isn’t to build better workers. It’s to develop better humans who happen to do extraordinary work because you helped them become more capable, more confident, more fully themselves. That’s what this book is about.” In the highly personal Chief Impact Officer , Averill pulls back the curtain on what happens when you try to transform a compan...

The Ordinary Skills Of Exceptional Leaders

New York Times -bestselling author, chartered psychologist and Professor of Leadership at the University of Exeter Business School, John Amaechi , has released I t’s Not Magic: The Ordinary Skills Of Exceptional Leaders . It’s an important read for particularly managers, executives, board members, and other business leaders, and anyone else expected to motivate and inspire others to achieve great things. The book walks you through the seemingly obvious but difficult-to-nail mindsets and intentions you’ll need to adopt to influence and motivate others. You’ll learn strategies and techniques you can apply immediately, including: Easy-to-follow explanations of the straightforward behaviors you can model to improve your ability to lead others. Habits you can adopt immediately to motivate others in any setting, from the boardroom to the classroom or the battlefield. Data-driven insights into the tiny, little things that great leaders do every day and how to incorporate th...

Inspiring Leadership Quotes

These quotes truly inspire me and hopefully they will inspire you as well : “The three common characteristics of best companies -- they care, they have fun, they have high performance expectations.” -- Brad Hams “The one thing that's common to all successful people: They make a habit of doing things that unsuccessful people don't like to do.” -- Michael Phelps “It is amazing what you can accomplish if you do not care who gets the credit." -- Harry S. Truman “The leader of the past was a person who knew how to tell. The leader of the future will be a person who knows how to ask.” -- Peter Drucker “Leadership: The art of getting someone else to do something you want done because he wants to do it.” -- Dwight D. Eisenhower “Good leadership isn't about advancing yourself. It's about advancing your team.” -- John C. Maxwell "People buy into the leader, then the vision.” -- John C. Maxwell “Great leaders have courage, tenacity and patience.” -- B...

The 10 Essential Elements Of Dignity

In their book, Millennials Who Manage , authors Chip Espinoza and Joel Schwarzbart , quote Donna Hicks 's explanation about how dignity is different from respect . Dignity is different from respect in that it is not based on how people perform, what they can do for us, or their likability. Dignity is a feeling of inherent value and worth. Therefore, Espinoza and Schwarzbart recommend that leaders treat those they are leading with dignity and follow Hick's 10 Essential Elements of Dignity : Acceptance of Identity - Approach people as being neither inferior nor superior to you. Assume that others have integrity. Inclusion - Make others feel that they belong, whatever the relationship. Safety - Put people at ease at two levels: physically, so they feel safe from bodily harm, and psychologically, so they feel safe from being humiliated. Acknowledgment - Give people your full attention by listening, hearing, validating, and responding to their concerns, feelin...

Eric Jacobson On Management And Leadership

Search This Blog