Albert Jan Thomassen is director of FBNed, the Dutch Association of Family Firms and founding president of the Family Business Network.
Family Business Key Issues
By Denise Kenyon-Rouvinez and John L Ward, Palgrave Macmillan
It is seldom that renowned specialists from the family business field join forces to write about their latest insights. It is equally seldom that they manage to produce a book that is easy to read, has considerable depth and is thought provoking. But the editors and authors of Family Business Key Issues have been able to just do that.
In the first chapter the authors discuss the fundamental dilemma: balancing business performance and family harmony. The authors offer some useful concepts such as the family genogram, creating a family business vision and insights into the different stages of ownership. The ownership dimension however is touched upon but not explored in depth. What can the family and perhaps non-family owners bring to achieve and maintain family harmony and business performance?
In chapter two Ward and family business expert Randel Carlock and focus on the concepts that can help to assure a healthy business. Strategic planning is a common best practice in most companies today. Yet for family businesses there is more to strategic planning: the family ownership constellation, vision and values must be taken into account. Carlock and Ward also discuss some unconventional strategies in family business such as the long-term orientation. Vertical integration is another example. Economic theory does not favour it but the authors describe how many family businesses pursue this strategy quite successfully.
In the following chapter Joe Astrachan and Annelie Karlsson-Stider discuss core issues in the family and provide some ideas how to manage and develop the family. The chapter begins with some confronting items on marriage, inheritance, nepotism and the role of wives. Many family businesses have been successful over generations due to specific but perhaps discriminating strategies such as primogeniture, where the eldest son inherits the business. In other cases this strategy resulted in a declining business or even a disappearing family business. By presenting these different strategies the authors invite and challenge the reader to become more conscious about the strategies they use. The chapter concludes with a concept that has gained popularity over the years in business-owning families: the family protocol. Astrachan and Karlsson-Stider stress the importance of the process that needs to be in place to come to a family protocol. However it would have been nice to learn more about how to set up such a process.
The importance of family business governance is discussed in chapter four by Miguel Gallo and Kenyon-Rouvinez. The most common governance bodies in the business and in the family are presented. Most of the chapter deals with the crucial role the board has in the whole family business governance system. An overview is provided of some of the common pitfalls in creating an effective board such as the false equality – board composition based on legal ownership rights instead of merit and the ability to include all owners. On the family governance side Gallo and Kenyon-Rouvinez introduce the family council and the family assembly, and conclude that well-functioning family business governance systems will lead to more successful businesses and families.
Family business experts John Davis and Sabine Klein deal with the issue of succession in chapter five. The authors stress the importance of succession as a process that needs careful preparation and the ability to trigger and manage change – despite all the uncertainties. Probably the most important message that Davis and Klein want to convey is that the choice of successors should be based on a clear vision and strategy for the business.
This book is not only a must-read for business-owning families who want both concepts and models to help them grow their family and business, it is also a recommendation to business-owning families who have created and implemented many of these ideas. The book challenges these families to revisit their ideas, processes and structures and to see what can be improved further.
Also, Family Business Key Issues is one of the first books that can be recommended to the next generation of family members, owners and governors to learn more about the key issues – and to help them find answers to the many questions they will have in exploring their future roles in the family business.