Another Hurdle in Moving to Democratic Decision-Making

As I continue meeting and working with more and more business families, I’m seeing similar issues come up in a lot of different places.

Every family situation is different, of course, but when you’re privileged to work with many of them, there’s always a benefit to using ideas you pick up from one family in service of another.

Many family businesses do well under the leadership of their one, singular, founder, only to experience some rough waters once the next generation takes over.

As I relate these types of stories to families and other folks interested in the subject, I’ve begun to develop certain ways of sharing what I’m seeing, and I’m always happy to work on how I phrase these nuggets of wisdom here in this blog.

From Autocratic to Democratic Rule

While I know that not all founder-led businesses are ruled by autocratic leaders, many are, at least in their early stages.

Even as such businesses evolve from the “one-man-show” to include many more leaders as they grow, there is still usually a pretty clear hierarchy that is either expressly enunciated or at least generally assumed, by everyone both inside and outside the business.

As a family business moves beyond the first generation (G1) to the next, (G2, G3…) that hierarchy can become more blurred and hence much less clear.

Titles like CEO and President are often helpful in keeping things pretty clear to those outside the business, solving a lot of the potential confusion.

Inside, though, where there are often a number of owners of the business, with many from the same generation of related family members (siblings and cousins), an assumed hierarchy often becomes an issue.

Quite often when more than one person owns a business, more democratic rule is expected.

Turning a Problem into a Solution

This question has tripped up its share of family firms and will likely continue to do so.

So how can a family enterprise overcome this challenge? It’s actually pretty simple, but let me remind you that just because something is simple to explain, that doesn’t necessarily make it easy to do.

I’m currently reading a book about the coaching philosophy of John Wooden, the most successful college basketball coach in the history of the sport. Here is a salient quote from Coach Wooden that could be helpful:

                               “I am more interested in 

                                  finding the best way

                              than having my own way”

The key to this actually working is for everyone to adopt this attitude and not be attached to having things their way.

The good news is that you don’t have to give up ever having your way ever again, you only need to learn to do it from time to time. 

Once you learn that other people also have valid and valuable ideas that can be just as good as your own, and often even better, it becomes easier with time to let go of the need to always have things your way.

Make Sure You Do WHAT Is Right

As I’ve heard it said by some wise person who’s name I don’t recall, “WHAT is right, is more important than WHO is right”.

This brings up the importance of learning how to make decisions together, as a group of people, which doesn’t always come naturally to some.

The best advice I can give to any family who wants to work on this is “Practice, practice, practice”.

And then practice some more.

When I’m engaged by a family to work with their rising generation, the first thing I look for is an opportunity for them to work on things where they’ll need to make decisions together, so that they can begin to cultivate this vital ability.

Who Cares Who Gets the Credit

They usually discover that all of them together are much smarter than any of them alone.

As a sharp colleague reminded me recently, “It’s amazing what can be accomplished when you stop caring about who is going to get the credit for it”.

Again, though, while this sounds simple, it’s rarely easy. 

It can be done, though, and those who try it are often surprised that once you get started and see some success, it gets easier with time and practice.

It doesn’t happen by itself and requires a lot of intention.

But isn’t that all part of good leadership?