Chief Emotional Officers Set the Tone in Family Business

By
From the September 2012 issue of Columbus CEO

It may not be a surprise that the highest-ranking/oldest woman in a family-owned business is the “cEo” or chief emotional officer. She nurtures family beliefs, calms sibling rivalry and sets the tone for the family interaction.

Although young mothers may work in, run or own the family business, in most traditional households, the mom is still the primary caregiver—the person primarily responsible for raising the children. Many men would say that sentence is not true and would declare very loudly that they help around the house all the time. And they do help mom with the household duties.

But in traditional families, most of the time, mom is still the person who stays home if the child is sick, takes the child to the doctor, stays home to let the plumber in and makes sure household repairs get done. Her time with the children is spent with empathy, listening to their goals and dreams, instilling family values and sharing her expectations for them. So when these children come into the family business, they look to and listen to mom when it comes to facilitating cooperation, encouraging family relationships and providing a bridge between family and business.

Successful family businesses do not attempt to remove the emotional power of family relationships from the company. Instead, the emotional power of such relationships becomes the foundation for a successful transition from one generation to the next. A strong family relationship is one of the reasons family businesses are so successful. The cEo can provide the necessary emotional support, help smooth things over and keep communication open. Communication that is open, direct and respectful is key. The cEo can help make peace among generations and nurture the necessary commitment to the family and the business.

Communication

Unfortunately, there can be a downside to the cEo. In family businesses, triangles often occur. Dad tells mom that daughter is doing poorly (but doesn’t tell daughter); daughter tells mom that dad is unreasonable. Son tells mom that dad won’t listen to his ideas; dad tells mom that son has some harebrained ideas that will destroy the company. No one tells the other person directly what the issues are. A strong cEo must repeatedly say, “Go tell dad/daughter/son what you feel, not me.”

In troubled family businesses, the cEo attempts to smooth out issues without fixing the communication problem. These situations rarely work out well. A strong cEo will encourage communication among all family members.

There is a well-known story about the succession of The New York Times in 1896. When Adolph Ochs passed the Times on to Arthur Sulzberger, Arthur’s wife (Iphigene Ochs Sulzberger, Adolph’s daughter) had a “quiet but decided influence” on the newspaper her entire life, according to her obituary: “She strove to preserve the family ties among her four children, 13 grandchildren and 24 great-grandchildren. … She was the ‘glue that held us all together.’ ” It appears that Iphigene was a characteristic cEo.

Successful cEos often help with communication among family members and encourage get-togethers. Recently, a mom returned from her home in Florida to attend a family council meeting of a Columbus business. The children running the business are in their 50s, and there also are grandchildren involved. Mom talked about the sacrifices she and dad had made starting the business, how difficult it was to get financing, how $500 saved the business, how dad’s word could be relied upon by everyone, how much the family business meant to them and how important it was to preserve the family name and reputation. When she finished, everyone crowded around. But most significantly, the grandchildren had heard, perhaps for the first time, the history of the company and the importance of the family values, even though mom never worked at the company.

Other cEo Roles

In many family businesses, the wife of the founder will say she “has nothing to do with the business.” Nothing could be further from the truth. Because she is the “invisible” cEo, she is the behind-the-scenes promoter of equality, communication and cooperation. She may not have a formal role in the company, but she fosters self-confidence and competency. It is important to include the cEo in family council meetings where family members discuss the continuity of the business. In reality, mom may end up as the majority shareholder and need to make crucial decisions about the future of the business.

Often, other people take on the role of cEo. Many times, an outside, non-family member can assume that role, listen objectively and provide advice. Since family relationships can be emotional, sometimes a third party can facilitate better communication.

Family business is like a complicated maze. With planning, good counsel and luck, the family members find their way out to another successful generation of owners, leaders and managers. Without the support and “glue” of a cEo, many families get lost in the maze and just stop, or must reverse direction completely. A good cEo is invaluable.

Beatrice E. Wolper is co-founder of the Conway Center for Family Business and president of Emens & Wolper Law Firm. She can be reached at (614) 414-0888 or bwolper@emenswolperlaw.com.

Reprinted from the September 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.