Families that share a business or other financial interests can struggle like any other. But their squabbles can do more than ruin an awkward summer barbecue. At stake is the economic stability of the business as well as the financial comfort of the ...
Duncan Taylor at Taylor Made Sales Agency in Nicholasville, Ky. He sought help from a chief learning officer after running the company with his brothers for more than 40 years.CreditLuke Sharrett for The New York Times
July 6, 2018
Families that share a business or other financial interests can struggle like any other. But their squabbles can do more than ruin an awkward summer barbecue. At stake is the economic stability of the business as well as the financial comfort of the family members.
In these disputes, money can act like kerosene on the flames of family discord. The typical reaction after a fight with a relative is to take a break, but those linked by financial interests are more likely to hire lawyers and fight for what they believe is theirs.
In an effort to keep a bad situation from getting worse, families are turning to so-called chief learning officers to help them learn to work together. The hope is that a more aligned family will make better decisions that will benefit its members and its business.
The chief learning officer is well established at large companies. In 1990, Jack Welch created the role at General Electric when he was chief executive. In the last three decades, people filling this position have acted as corporate educators. Their focus is on creating programs to train employees to make them and the company more productive.
In family operations, the role has morphed slightly: The focus is on training the relatives to be business owners and to think about the future of the enterprise.
Greg McCann, founder of McCann & Associates, acts as a chief learning officer for family businesses as well as a counselor to those who want to assume his role in a family enterprise. He said that getting families to shift their focus toward unity could be difficult, but that in the long run, they had more clarity about who they were and what they wanted. And sometimes, they chose not to stay together.
“I always ask them, ‘Do you want to be the last but most efficient Blockbuster store owner?’” he said. “The world is changing really quickly. You can’t just make the Blockbuster store layout better. You have to think, ‘How do we go from Blockbuster to Netflix?’ Most families get that.”
Mr. McCann said the process started with the family itself. “We say the family defines success, but what’s needed is a definition of family goals,” he said.
Haws, a 100-year-old family company in Sparks, Nev., that makes drinking fountains and emergency equipment, found itself needing to redefine its corporate structure when a member of the family left the company abruptly.
“We had family members in the business and assumed they were looking after each other,” said Tom White, the chief executive and the husband of one of the owners. “They weren’t.”
Stephanie Kilroy, his sister-in-law and an owner of the company, said the family business hadn’t been mismanaged; it had been “unmanaged.” So the family created governance policies to help align its members and run the business more efficiently.
But it became clear that more help was needed, so the family brought in Mr. McCann. In the process, it decided that the best solution would be for Ms. Kilroy and her sister, Mr. White’s wife, to buy out the other relatives.
“We had tiptoed around the deeper issues that related to family dynamics, and it really caught up to us,” Ms. Kilroy said. “We worked on resetting the family ownership group and committing to the emotional intelligence aspect of families in business together.”
The task can be long and arduous. Mr. McCann said the first year was particularly intense and time-consuming because it required the families to talk about issues that they may have been glossing over for years.
Taylor Made Sales Agency is an equestrian sales and boarding company. Mr. Taylor has worked on improving his leadership style, which wasn’t a match for his brothers. “I’m a thinker, not a feeler, and I have three brothers who are feelers,” he said.CreditLuke Sharrett for The New York Times
One thing families must consider is making the leap from a family business to a family enterprise, which could comprise several related businesses, financial assets or separate holdings that allow different branches to do their own thing.
The families that have thought about personal and professional growth are typically the most successful; those whose members are not committed to one another on a personal level often struggle because they fail to see the purpose in keeping the business together.
Some families stop the process when they realize what it entails, Mr. McCann said. “They’d like to be in shape, but they don’t want to run or lift heavy things,” he said.
Ruth E. Steverlynck, a chief learning officer and a founding partner of Your Family Enterprise, said she spent years with her clients. She said many families thought that once they had the legal documents like wills, trusts and partnerships in place, their job was done. Likewise, they might be thinking about family governance, but still need guidance.
Chief learning officers, she said, are available “to help families learn and develop, to really help families get excited about learning together and why it matters.”
Duncan Taylor has been running Taylor Made Sales Agency, an equestrian sales and boarding company in Nicholasville, Ky., with his brothers for more than 40 years. After working with McCann & Associates, he learned his leadership style was not a good match for his brothers’ way of working.
“I’ve always been the brother coming into the meeting pushing and pushing an agenda,” he said. “I’m a thinker, not a feeler, and I have three brothers who are feelers. When I get into the room, I shouldn’t push so much. I should throw the idea out on the table and ask for input.”
Chief learning officers can help break through an impasse by showing each side how the other is thinking. Mr. Taylor said he was listening to his brothers more and asking more questions.
“Before, they were thinking I wasn’t respecting them, when I was thinking I’m just trying to get things done for the business,” he said. “Now, they’re giving their thoughts more. They’re not so easily caving in just because they want to get out of the meeting.”
He said this revelation had come at a crucial time for them because their children were beginning to show interest in the business.
A chief learning officer at a top corporation earns around $140,000 a year, according to job sites like Indeed and LinkedIn, and those who work for family businesses make about the same. Mr. McCann said that he charged $400 an hour, and that the first year of a project typically ran $80,000 to $150,000.
Being the chief learning officer in a family-run business is different from being one in a larger company because family members have different levels of involvement. Some work in the business, while others are merely shareholders. A chief learning officer has to consider the qualifications of the relatives as well as the potential for clashes with others.
“The ability to have the difficult conversation is the best way to ensure families last 100 years,” Mr. McCann said. “It’s the difference between hiring one sibling versus having a hiring policy.”
What most of the founders are looking for is a way for their children to run the company together or find a way to part amicably. But a chief learning officer’s role is to be realistic.
“I say, ‘If we roll the clock ahead 20 years, what do you want it to look like?’” Ms. Steverlynck said. Some families may not want to remain in business together, she said, while others want to build a dynasty.
Either way, they have to take the first step. And that’s a learning exercise for any family.
A version of this article appears in print on , on Page B4 of the New York edition with the headline: Family Businesses Hire New Type of Executive: Referee. Order Reprints | Today’s Paper | Subscribe
business casual business business insider business card business lease business english business model canvas business intelligence business class business casual dress code