How To Build A Strong Family Business

A few months ago 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

Recently, 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

Learn The Power Of Probabilistic Thinking

Dive in for a fascinating read as you discover the life-changing power of probabilistic thinking, taught by Kyle Austin Young in his book, Success Is A Numbers Game . “Every goal that you’re pursuing has two hidden numbers attached to it—a probability of success and a probability of failure,” explains Young, “If you can make the first number bigger and the second number smaller, you can rewrite your predicted outcome.” “Whether you’re trying to start a business, run a marathon, get a promotion, earn a pilot’s license, grow a bumper crop of tomatoes, or sign an acting deal, these two percentages are always lurking in the shadows predicting what is going to happen.” But, adds Young, "Most of us never think about them. We assume our odds are unknowable and unchangeable. This dangerous lie leads millions of people to fail at goals where they were perfectly capable of succeeding. You can choose a smarter path,” encourages Young. In Success is a Numbers Game , ...

How To Rewire Your Mind To Build Your Adaptability Quotient

Alec Litowitz argues that the most valuable skill of the next decade isn't IQ or even EQ (Emotional Intelligence). It's AQ: your Adaptability Quotient, the ability to question assumptions, update beliefs, and respond effectively when reality changes. Litowitz is the author of the forthcoming book (releasing on September 15, 2026) The Adaptability Quotient: Rewiring Your Mind For Success In The Next Human Era . And he shares that “AQ is a learnable way of using your mind like a high-performance machine: to model risk, absorb feedback, make faster corrections, and create repeatable advantages in conditions where most people stall out—or drown.” In short, it’s all about how to move from “making the right decision” to “making decisions right.” “As artificial intelligence, media, and scientific advances reshape the cognitive landscape, adaptability becomes the essential discipline for reclaiming human agency,” adds Litowitz. “And a s AI resha...

How To Become Your Best-Self Leader Everyday

“By focusing in specific ways on five key leadership elements— Purpose, Process, People, Presence, and Peace —you can increase your time, capacity, energy, and ultimately your leadership impact,” explains Amy Jen Su , author of the book, The Leader You Want To Be: Five Essential Principles for Bringing Out Your Best Self—Every Day . Su shares both Western management thinking and Eastern philosophy to provide a holistic yet hands-on approach to becoming a more effective leader with less stress and more equanimity. She draws on rich and instructive stories of clients, leaders, artists, and athletes. And, she focuses on three foundational tenets: s elf-care, self-awareness, and personal agency . Most important, Su explores in depth, chapter-by-chapter the Five Ps : Purpose – Staying grounded in your passions and contributions, doing your highest and best work that has meaning and is making a difference. Process – Relying on daily practices and routines that honor your natural energy rhyt...

Daily Intentions For Leaders

Everyone can benefit from the book, Dear Friend , which features bite-sized, daily notes for contemplation, inspiration, connection, and clarity. Busy and stressed business leaders can particularly benefit from the 365 profound, heartfelt reflections from author Michelle Maros , founder of Peaceful Mind Peaceful Life and cohost of the podcast, Life Happens with Barb and Michelle . Dear Friend invites readers to go deep and use the notes as a daily practice that compounds over time, nurturing strength, resilience, and clarity. In just a few minutes each day, this book will offer you a daily reprieve when you feel burned out, beaten down, or overwhelmed by the strains and stresses of modern life. The heart of Dear Friend began in the quiet mornings Michelle shared with her mom, Barb. Every day, they would sit together, reading affirmations or passages from Barb’s beloved books. These small rituals—simple but powerful—set the tone for each day, grounding them in g...

Critical Questions To Ask New Hires

In Paul Falcone ’s book, 75 Ways For Managers To Hire, Develop And Keep Great Employees , he recommends asking new employees the following questions 30, 60 and 90 days after they were hired: 30-Day One-on-One Follow-Up Questions Why do you think we selected you as an employee? What do you like about the job and the organization so far? What’s been going well? What are the highlights of your experiences so far? Why? Tell me what you don’t understand about your job and about our organization now that you’ve had a month to roll up your sleeves and get your hands dirty. Have you faced any unforeseen surprises since joining us that you weren’t expecting? 60-Day One-on-One Follow-Up Questions Do you have enough, too much or too little time to do your work? Do you have access to the appropriate tools and resources? Do you feel you have been sufficiently trained in all aspects of your job to perform at a high level? How do you see your job relating to the organization’...

Effective Listening: Do's And Don'ts

Here are some great tips from Michelle Tillis Lederman's book, The 11 Laws of Likability . They are all about: what to do and what not to do to be a leader who's an effective listener : Do : Maintain eye contact Limit your talking Focus on the speaker Ask questions Manage your emotions Listen with your eyes and ears Listen for ideas and opportunities Remain open to the conversation Confirm understanding, paraphrase Give nonverbal messages that you are listening (nod, smile) Ignore distractions Don't : Interrupt Show signs of impatience Judge or argue mentally Multitask during a conversation Project your ideas Think about what to say next Have expectations or preconceived ideas Become defensive or assume you are being attacked Use condescending, aggressive, or closed body language Listen with biases or closed to new ideas Jump to conclusions or finish someone's sentences

Six Leadership Actions To Leverage Employees' Differences To Strengthen Teams

The new book, All The Difference: Six Leadership Actions To Bridge Perspectives, Strengthen Teams, and Create Value , teaches how leaders can turn their team's individual differences into deeper trust, greater creativity, and winning results. “The greatest risk of unmanaged difference isn’t conflict: it lies in the ideas, insights, and opportunities that may never surface,” explain the book’s authors, Susan MacKenty Brady , Stuart D. Kliman , and Lt. Gen. (Ret.) Leslie C. Smith . They suggest that you look around your team to fully see people with different communication styles, perspectives, cultural norms, and capabilities. These differences are expressed in all kinds of ways, such as casual gestures in a meeting, a colleague's opinion on a current event, or an intense work style. Often, those differences can lead to friction, even conflict. You may try to manage around them. But, for you and your organization to fully leverage the strengths of your team’s diffe...

The Five Critical Roles You Need To Build A Winning Team

The book, Team Players , by leadership expert and New York Times bestselling author, Mark Murphy , explains why a team needs more than strong leaders—it needs the right mix of five roles and talents to succeed. In addition, Murphy reveals that the secret to extraordinary teams isn’t making everyone the same—it’s embracing and leveraging fundamental differences through those five distinct team roles. No amount of teambuilding, trust, or cohesion can overcome having the wrong mix of people in the room. The five essential roles and talents are : The Director assumes a leadership role within the team, guiding its direction and making important, difficult, and even unpopular decisions. The Achiever immerses themselves in the details of accomplishing tasks and getting things done, with a keen eye for delivering error-free work. The Stabilizer keeps the team on track with meticulous planning, processes and procedures, clear timelines, and organization. ...

Seven Ways To Stay Motivated

To learn how to stay motivated, read High-Profit Prospecting , by Mark Hunter . It's a powerful read that includes counter intuitive advice and cutting-edge best practices for sales prospecting in today's business world. Today, I share one of my favorite sections of the book where Hunter describes his seven things motivated people do to stay motivated : Motivated people ignore voices in their lives . These might be people in the office and friends who have bad attitudes. They're out there, and if you're not careful, they'll control you, too. Motivated people associate with highly motivated people . Just as there are negative people in the world, there are also positive people. Your job is to make sure you spend as much time with the positive people as possible. Motivated people simply look for the positive in things . Positive people count it an honor to live each day, learn from others, and impact positively those they meet. Positive people take great satisfaction...

The Five Critical Roles You Need To Build A Winning Team

The new book, Team Players , by leadership expert and New York Times bestselling author, Mark Murphy , explains why a team needs more than strong leaders—it needs the right mix of five roles and talents to succeed. In addition, Murphy reveals that the secret to extraordinary teams isn’t making everyone the same—it’s embracing and leveraging fundamental differences through those five distinct team roles. No amount of teambuilding, trust, or cohesion can overcome having the wrong mix of people in the room. The five essential roles and talents are: The Director assumes a leadership role within the team, guiding its direction and making important, difficult, and even unpopular decisions. The Achiever immerses themselves in the details of accomplishing tasks and getting things done, with a keen eye for delivering error-free work. The Stabilizer keeps the team on track with meticulous planning, processes and procedures, clear timelines, and organi...

Eric Jacobson On Management And Leadership

Search This Blog