Family business lessons
Argue in private but keep a united front in public
We are used to dirty laundry being often aired in politics, which is tiresome for a nation that yearns for leaders to act with dignity and honor. So it is disappointing when the same thing happens in family businesses.
Integrity includes the discipline of keeping arguments and squabbles within the clan, rather than forcing employees to take sides, using social media to vent grievances or even suing each other in court.
“The family needs to be a solid and unbreakable unit to anyone outside of the family,” says management adviser Tom Oliver in his Inquirer column last Jan. 27. “Behind closed walls you can discuss, argue, have creative disagreements, even tantrums. But that has to stop when you leave the room and interact with anyone outside. That goes for the whole family and every one of its members.
“This is something a lot of family businesses can learn from … Donald [Trump]. You will have a hard time trying to find cases of where … members of the Trump family were washing dirty laundry in public … Solid wall between what happens behind closed doors and the world outside…
“Remember: you don’t have to like him, or approve of him, or endorse his politics,” says Oliver. “I am making a point about family unity even in the case of strong adversity, scrutiny, press, competition, bad economic times and trouble in his business.”
Encourage innovation while keeping the core legacy
Successful family businesses are usually built around a core legacy started by the founders and developed by successors. But to navigate the challenges of passing the business through the generations, owners and managers need to keep up with the changing times and pursue paths that may often be different from their original ones.
Most of our top corporations have diversified into new areas. Several started out in retail or manufacturing and have, through the decades, branched out into real estate or banking, taking advantage of synergy to propel growth while remaining true to their legacy.
“For family businesses, the sweet spot between tradition and innovation is crucial for survival and growth,” says Family Business USA. “Leveraging [new technologies or other means] and embracing growth and innovation can propel the business into the future while honoring the legacy upon which it was built. This delicate balance requires a keen understanding of how new … approaches can complement traditional business models.
“A shared vision that aligns with the family’s values is critical to this balance, ensuring that as the business evolves, it does not lose sight of its founding principles. Family businesses can achieve sustainable growth by integrating innovative practices with these values. It is about adapting to the present while maintaining a solid connection to the past, allowing the business to thrive in a competitive landscape.”
Train successors in roles that best fit them
It is not easy to mold successors who may be resistant to roles that they feel not qualified for, or that they may not feel compelled to take on. In the past, when founders typically tend to be more authoritarian, children often had no choice in the matter—they had to help out in the business once the need arose, whether they wanted to or not.
But today, forcing people to work in ways they do not like is no longer the norm. What to do then? First, use their strengths and interests.
“Play to your children’s strengths and allow them to work in the facet of the business that puts their strengths to best use,” says Canadian consultant David Steinberg in EY.com. “This way, every child will have a niche to focus on, each will be able to operate without anyone stepping on somebody’s toes and all children will add value to different operational areas of the business.”
But if this does not work, let your children seek their own path and instead be open to hiring outside professionals. “Just because you run a business doesn’t mean your children are cut out for the business world—or that they even want to run the business,” says Steinberg. “Have a frank discussion with your children regarding their career aspirations. Understand where they see themselves fitting into the business and don’t just assume they’ll run the company.”
Queena N. Lee-Chua is on the Board of Directors of Ateneo’s Family Business Center. Get her print book “All in the Family Business” at Lazada or Shopee, or e-book at Amazon, Google Play, Apple iBooks. Contact the author at blessbook.chua@gmail.com.
