Melanie Stern is Section Editor of Families in Business magazine.
As academic provision for family businesses reaches critical mass, more innovations are being developed that provide an alternative or add-on choice for the sector
Whether it was the resilience, entre-preneurship, history, or maybe just the high net worth tie up that attracted them, scores of academic institutions across the globe have opened up family business centres over the past two decades. As a result, family businesses have a wealth of courses and solutions at their fingertips to deal with their unique issues – now educators are developing more innovative ways to capitalise further on a growth market.
Compare and contrast
France's INSEAD is one of the premier institutions dealing in family business issues and has long been a provider of education in the field. In January this year it launched a feedback programme in which families can communicate what they are doing with their business and offer advice to other families about how they might go about developing their own; the idea is to encourage participants into a two-way communication channel of learning, rather than the traditional notion of the pupil-teacher relationship and its inherent boundaries. "I think learning from families is very important," occupant of INSEAD's Berghmans Lhoist Chair in Entrepreneurial Leadership, Randel Carlock, says. "We are trying to develop a model that is much more learner-centred, so we will be providing several days when the families will be teaching one another."
As family businesses across the world move towards a large-scale shift in leadership and all the associated challenges, family business centres are coming up with more and more courses, retreats and advice on how to manage this successfully. With this in mind, INSEAD created a computer simulation programme that students will use to experiment with models for different changes within their own business. Offered with its Family Enterprise programme in January and due to be re-run in July, delegates can learn how to theoretically manage each step of their own succession. INSEAD is looking to expand on such customised learning packages in a similar way to what many financial institutions already do, according to Carlock.
The future of family business learning
While most academic institutions in the field of family business have comprehensive websites, their interest in using the internet and communication technologies to take teaching online, for instance, has been a little slower than other areas of business education. Wisconsin-based estate planning attorney Alan Wallach moved to exploit this avenue by setting up his own company, Wallach Business Solutions LLC, marrying his excitement about web conferencing technology with his clients' need for succession education. The attorney has enlisted three professionals – founder of estate planning law firm Ambrecht & Associates John Ambrecht, family business management consultant Neil Koenig, and founder of valuation firm Willamette Management Associates Shannon Pratt – as teachers.
Wallach's idea of running 'webinars' is an example of how the internet can be used in this field. Simply put, webinars are seminars provided on the web using web conferencing technology that can be taught from anywhere and received from anywhere, provided student and presenter both have wireless technology and Microsoft Powerpoint installed on their computer. The webinars are interactive – students use 'emoticons' to provide feedback or questions live to the speaker, while the speaker can poll the audience with questions and have the tabulated answers immediately to hand.
"I knew from being an estate planning attorney that there was a lot of interest in family business succession planning," Wallach explains. "As the population ages and people think about retirement, their thoughts turn to how they can transfer the family business to the next generation. I knew there was a need for this type of programme, which is why I selected it to be our first series of webinars."
These webinars are designed to target the internet-savvy second in command, or those being groomed for next generation leadership, with a thorough introduction to the issues within succession; the first one provisionally planned to go live this Autumn will focus on the psychological side of succession planning, while the second covers the legal concerns, and the third and final one will look into the practicalities of valuing the family business, tackling things like common valuation errors and the appraisal process. "In many cases, the second in command will be a better prospect for our webinars since he or she is more likely to be computer literate than the major shareholder," the attorney concurs.
Wallach also plans to provide family business webinars to the advisors of family businesses, and has applied for CE (Continuing Education) Status to attract these clients. In the US, law practitioners are required to regularly restate their ability to perform their job in order to maintain their license, and to do this, they are required to take a certain number of CE-accredited courses in their field, throughout their career. By attaining CE Status on the webinars, Wallach will be able to market a product that will be of undeniable use to such law professionals in the family business field.
Elsewhere on the information superhighway, New York's Raymond Institute is currently working with Olin and Babson colleges and the Sloan Foundation, a philanthropic non-profit institution established in 1934 by the then-president and CEO of General Motors Alfred Pritchard Sloan Jr, on what they believe will be an unprecedented online information source for family businesses. Pencilled in for initial launch late this summer, the platform will also make use of modern technologies to provide a one-stop shop for resources and links – and plans are in the pipeline to build training and educational services on it later, again targeting the next generation. "We feel many of the current family business owners will use it, but in reality it'll be the next generation leaders that take full advantage of it, so we're gearing it towards them," according to Raymond's president Carol Wittmeyer, who hopes the platform will be the global authority on family business research. Meanwhile the Institute has launched a two and a half day residential program at Babson College's recently opened executive education centre, designed for small groups to look at case studies regarding different family business problems and how to deal with them. The students are to outline goals for their course instructors beforehand.
Setting the stage for family business success
It seems almost logical that, knowing how much drama can be involved in many aspects of running a family business, educators in the sector have taken a leaf from the thespian's book. The Massachusetts-based UMass Family Business Center is one such advocate of this approach, having run two previous plays on the strains of family business life, including "Wait Till Your Father Gets Home". Admittedly, this sounds a little unorthodox at first, and perhaps doesn't have the expected executive education ring about it – but UMass director Ira Bryck has had nothing but positive feedback from his audience, which has included members of MassMutual bank and family business sector advisor Dennis Jaffe, as well as large- and medium-sized US family businesses. Bryck is to the point about why he chose to use drama to facilitate his message. "It was my observation that business owning families were not getting to a deep enough level of discussion about their conflicts and inner struggles, even with speakers broaching the 'soft topics'," Bryck explains. "Drama has a way of getting under the skin, and by analysing the problems facing a fictional case you can point out what is affecting 'those people' without risk to you. Case studies seem too academic and many people don't read them carefully or at all; but with a play, everybody sees it simultaneously and feels the pain of the characters. A surprising number of people were proud to be similar even to the unsympathetic characters in the plays, but better understood why certain behaviours from that character were problematic, and how changes might be necessary to get better results. Entertainment is key in a learning situation."
Bryck's show, "A Tough Nut To Crack", based on the true story of a father and son company, toured the family business centres of universities late last year and will see more universities and family business forums throughout the US in 2003.
Italy's SDA Bocconi School of Management has also prescribed to this form of education. Along with six European institutions, including Copenhagen Business School and the French Institute of Enterprise Administration, the school will stage a series of 'Entrepreneurial Dramas' based on managerial practices and board concerns at its third annual meeting of the European Academy of Management (EURAM) at Bocconi, this April.
So, educators are clearly focused on providing some very creative learning opportunities – there is little excuse for a dragging of heels on the families' parts. Bryck, however, concludes that the latter has been somewhat of a personal bugbear: "In nine years of putting on events for family companies, I've found that people like the topics best that challenge them the least. People who really need to discuss intense competition between siblings would much rather hear about mezzanine finance."