What Does It Take to Play a Key Role in a FamBiz?
A few weeks back in Hey, the Expert Is Here! (Uh Oh…) I hinted that this post would soon be coming, as its genesis stems from the same virtual study group call that gave rise to that blog.
That missive dealt with the difficulties advisors sometimes face when working with families, who look to us to have simple, expert solutions to their complex challenges.
This week we’ll look at how family members sometimes have expectations for roles in a family business that are not well aligned with the reality of the situation.
I’ll share some insightful ideas while suggesting ways to avoid those misalignments by having some important conversations from an early age.
The Robinson Family and the “Scholastic” Case
Our study group occasionally uses a real life case as a basis for discussion, typically from a real family client of one of the members.
This time though, we took one from some recent headlines, involving the death of the CEO of Scholastic Corp., a book publishing giant responsible for some well-known series, including Harry Potter and Clifford the Big Red Dog.
When family business stories make headlines, it’s often for the wrong reasons, and this one does qualify, thanks to some of the decisions Richard Robinson made when writing his will, followed by his unexpected death, albeit at the age of 84.
The case supplied our group of “experts” with plenty of fodder for discussion. One of the members of the group (Ok, it was me!) couldn’t resist poking fun at one of the CEO’s sons, who was quoted in the Wall Street Journal story about the case.
Dressing Up as Clifford the Big Red Dog
The young man seemed to think he was in line for a position on the company’s Board of Directors, even though his most noteworthy contribution to date was having donned the Clifford costume for some promotional events.
That’s when someone suggested the headline I used for this post (thanks KH).
No, he isn’t likely ready to join the Board. But what made him think that he should be?
It’s hard to know for sure, but one thing was clear from the story, and that’s that very little communication about roles in the company of any sort ever took place between the CEO father and his sons.
He did communicate a great deal with his mistress who worked for him and who inherited most of his assets, though, which is what gave this story so much press attention.
Aligning Expectations and Preparation
I’ve written a lot on alignment and expectations, but very little specifically on preparation.
For rising generation family members who aspire to some role (or roles) in the family enterprise, preparation is a must.
It is not, however, as simple as one might believe.
In decades past, “go get an MBA” was a quick and simple way to prepare, and that’s still typically a valid step to be taken, depending on the desired and expected role.
Wise families now realize that there are important roles to be played not only in the business, but also in the family and ownership circles.
Preparation and Leadership – Who Can Do What
The whole question of preparation also drags along with it another key element, and that’s leadership.
That MBA may be the best way to prepare for a key role in running the business, as it has over the past few decades.
But other roles also require leaders, and preparing for such roles takes time and intention, and a recognition and acknowledgement that such roles are worth developing.
Leadership roles in the family clearly require different skills and abilities from those in the business.
Ownership roles are different still, although there are always overlaps.
Pushing AND Pulling Are Required
Regardless of what type of role you’re looking at, there needs to be action on both ends, i.e. pushing and pulling.
The rising generation needs to make the effort to push their way in, while the leading generation also needs to make the effort to pull them along.
Needless to say, this requires coordination, which means that communication needs to be clear and frequent.
It’s Never Too Early to Begin
So young Mr. Robinson, while removing the Clifford costume, could’ve asked his Dad about what roles might be available to him in the business some day.
And Dad also might’ve asked his son if he thought that some day he might want to play a larger role in the company.
It’s never too early to start.