Articles about Management
Managing the Family Business: Leadership Roles
Poorly designed leadership roles set up a family business for failure. John A. Davis offers a system that produces the decisiveness and unity needed for long-term performance.
by John A. Davis
Editor's note: This is part of a series of occasional columns on managing the family business written by Senior Lecturer John A. Davis. In this article, Davis discusses leadership roles.
PART TWO: Structuring Leadership Roles
My
previous article
outlined what we know about leadership in family business systems
worldwide, including how leadership affects performance. As an example
of very capable leadership of a high performing family enterprise, I
introduced Nelson Sirotsky, Chairman of RBS, who two years ago
successfully passed the baton after leading his family's media business
as CEO for decades.
Whether you adopt the one-leader model for your own family
enterprise, as RBS has done, or whether you build a team of leaders, you
still need to design, structure, and allocate all the necessary
leadership roles.
Why? Because wherever I see poorly designed, badly structured, and
slap-dash leadership roles in action, I hardly ever see the decisiveness
and unity that a family business system needs for long-term
performance.
How do you design, structure, and allocate all the leadership roles you
need? That's what this article will focus on.
First recognize that for any group or organization to be successful, it needs to be led, managed, and governed well.
Leading, Managing, and Governing
Governance provides a broad sense of purpose or mission for the group
and gives the group a sense of stability. Without stability, we cannot
plan long-term. Family business systems have an enduring advantage over
all other kinds of enterprise in large part because of their long-term
goals, plans, and commitments. Without stability, you lose your built-in
advantage. Without adequate governance, you don't have adequate
stability. The family business system absolutely must be governed, and
governed well, for success.
Good governance for any group assures us that plans can be made,
problems solved, leaders developed and chosen, and disputes settled in a
way that preserves the purpose and unity of the group. Discipline and
trust grow. Good governance is the product of having useful rules,
policies, agreements, and plans, as well as forums (like boards, family
councils, and annual meetings of the owners) to develop the plans,
agreements, rules, and policies, to address important issues and to work
out differences.
One very wise person with legitimacy, a lot of authority, and good
intentions can provide good governance for a business, family, and
ownership group. But unitary leaders, like the rest of us, only have so
many hours in a day, and they can only focus on so many individual
concerns before losing effectiveness. So in one-leader systems,
governing well almost always requires that key stakeholders join
together into one or more groups:
- A shareholders' council and an annual meeting of the owners to serve the governance needs of the owners.
- A board of directors to serve the governance needs of the business and owners.
- A family council to help provide governance for the family.
These groups all need their own good leaders to function well.
So you can see that a family business system leadership team could
number four or more people: a leader of each governance forum plus an
ultimate leader. The business leader could be different than the
chairman of the board. The leader of the owners tends to be either the
business leader or a group of leading owners. Often, the family council
leader is different than the real family leader. Often the family leader
is also the business leader, but not always. Even where there is a
strong unitary leader of the family business system, there are usually
deputy leaders that lead the different parts of the system in close
coordination with the ultimate leader. This was the case for the RBS
system.
Leading
Besides developing, supporting, and participating in the governance
system, leaders need to lead people, and this is different from managing
their work. Leading is fundamentally about identifying where the group
needs to go (developing a compelling vision for the future),
strategizing how to get there, and getting people to change in order to
get there. This is done by inspiring, persuading, and motivating people
to work together to reach important goals, and by building coalitions to
support needed change.
Leading is a very personal activity where the leader connects with
people and convinces them, making use of compelling ideas and character
appeal. Followers follow the leader because of their loyalty, because
they identify with the leader, because they identify with the leader's
cause, and sometimes because of all of those things. Followers need
compelling reasons to file in behind any leader for the long-term, or
for difficult missions. Since family business is focused on the long
term, the family business leader or leaders must be personally
compelling, not just good at making plans and managing activities. As
the saying goes, you lead people into battle; you don't manage them into
battle.
Effective leaders can have a charismatic style, like Nelson, or a
more quiet approach. Regardless of style, the most effective leaders I
have seen in family business systems are clearly "servant leaders" or
more to the point, "servant partners." These leaders typically have
strong ideas and principles about how their companies should be run,
what their co-owners should invest in, and how their families should
behave. They also have egos, personal needs, and sensitivities. At the
same time, they want to do their best for their followers. They believe
in partnering with others and treating partners fairly. And they behave
like servants of the greater good. Finally, they are able to make tough
decisions to protect the standards and aspirations of the group.
Managing
Managing, as opposed to leading, is about getting a group to operate
efficiently and effectively. Managing is done by planning and budgeting,
organizing, analyzing problems, building and using management systems,
prudently allocating resources, and providing performance feedback.
Managing is a complement to leading.
So much of business and family success has to do with good
execution--getting jobs done well, on time, and on budget. Thank
goodness for good managers of businesses and families. Like all CEOs
that I teach at Harvard, Nelson Sirotsky spent a lot of his time as CEO
of RBS managing (that is, developing the efficiency and effectiveness
of) particular aspects of the business. He did a lot of planning,
organizing, and problem solving.
Most of the family business leaders that I see are strong managers.
There is room for improvement in some management techniques, but these
leaders are programmed to manage things. In fact, too much--to the point
where they focus so much effort on management that their companies tend
to be over-managed, under-led, and under-governed. It's natural for
CEOs, particularly family members who grew up in the family company and
know it well, to become focused on its operating effectiveness. But too
much focus here generally means they give too little attention to the
leadership and governance needs of the organization. We devote a lot of
effort in the Owner-President Management program at Harvard correcting
this pattern.
I often wish there was an Owner-President Management program for the
leaders of families! Families that own business have similar management
problems. Many business families could do a better job of managing their
financial life by setting clearer goals and by controlling spending
better. They usually need to devote more attention to the development of
the next generation. And business families, like all families, are
typically poor at giving performance feedback to their members. These
are all management issues.
But in my opinion, more problems in families are due to their lack of
governance and leadership. In the governance area, family members are
not clear about the family's mission or core values; or they lack
adequate rules and policies to guide behavior; or maybe they haven't
developed a forum and process to discuss important issues and mediate
differences among family members fairly. In leadership, they lack a
clear vision for the future; or they haven't accepted the need to change
in order to adapt to the environment; or they are uninspired. It takes
deep inspiration to tackle important challenges.
Governance, leadership, and management: businesses, families, and
ownership groups need all three of these activities. If you observe an
effective leader of a family business system, like Sirotsky, over the
course of a month, you'll see him or her engaging in all three of these
activities. The amount of time spent on each activity or group will vary
with the leader and circumstances. Some leaders favor leading and let
others manage; some leaders spend most of their time governing the
system. A parent also does these three things in the family he or she
leads. A good Chairman of the board or family council leader also does
an appropriate amount of all three. In this way and others, leadership
of a business, family, and ownership is similar.
In my next article, we'll take a look at what capable leadership actually entails for each of the three circles.
My Opini :
I agree with this article, as with the capability to train in the lead, was able to control a person's existing problems.
This article can be a lesson that in his family there to learn about leadership in the family
Sumber: http://hbswk.hbs.edu/item/7404.html
Conversation in English
Command and Request
A : Please sit down sir, let's talk about our business quiet yesterday
B : Well sir, about yesterday, the business is still in the stage of the process.
But I need substantial funds,what should I borrow the funds from you?
A : Do not worry sir, it can be set.
B : Thank you sir
Coordinate Conjunction
A: The funds I give to you the best possible use
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A: Please reconsider, so you will not regret oneday
B: Well sir
Direct anda Indirect Speech
A: The money has been received from the C?
B: yet,
A: He said, "The money that has been sent 1 week ago."
B: but I get an SMS from him, he says there are problems in delivery. perhaps because of that, I have not received it.
