The “I” in the “We”

Taking care of people is a family business leader's highest calling, whether immediate family, relatives, or the employees who extend the family legacy. To do so, he or she must emerge from the shadows of a legendary parent, grandparent, or other family member. As I've argued in this book, the ongoing process of becoming a differentiated and generative leader begins with establishing credibility with his or her predecessor, and with family, shareholders, and stakeholders. A leader cannot support and care for employees without their respect and support.

How do leaders do that? They start with themselves. Building internal and external credibility starts with self-awareness. Self-awareness is to know one's self apart from who others say you are. It's recognizing one's humanity amidst the clamoring for a hero. It's a process that does not end upon succession, the ascension to power. In fact, the deeper insights of self-awareness often come long after a leader has established him- or herself.

Jean Moran's moment of insight came after years of leading LMI Packaging Solutions, when she realized that she wasn't leading the family business for the family but to be loved by her family. Only then was she able to truly do what was best for the organization as well as the family. Leaders who are not self-aware tend to have mono-vision: they see only themselves; their ego blinds them to the larger needs of the family and the employees whom they serve. When leaders seek to become a monolithic leader, they convince themselves that it's all on them. They refuse to see that they will need help on the journey, believing that success is solely of their making. That burden will crush them. Strong leaders understand that they don't have to do it all to prove it all to everybody. It's only then that leaders are truly free to serve, to feed the family, and to take care of their people.

Self-awareness triggers the process of differentiation. If self-awareness is to “know thyself” in relation to others, differentiation is to be okay with oneself in all the ways that he or she is different from others, especially the founder. For successors of family businesses, the process of differentiation doesn't cease upon transfer of leadership. Or, rather, it's not complete once the new leader rises to power. As a general rule, the more the predecessors have been mythologized, the more difficult it is to differentiate. Consequently, differentiation is more like a daily discipline, an ongoing grappling with becoming a unique leader, separate from the predecessor. Successors who achieve this can clarify what to hold on to (and therefore also reject) from the past in order to do what's best for the future.

Differentiated leaders are the eye in the storm, the point of stillness and self-control when emotions run amok around them. Where emotions obscure the exact nature of things, the differentiated leader is emotionally neutral so he or she can discern between the smokescreen and the fire within the organization. The undifferentiated leader responds to each emotion as if it is a crisis. The differentiated leader will approach more judiciously, and say, “Is there a problem attached to this emotion that I must solve, or is this person just upset because she isn't getting what she wants? If there is a problem, let's solve it. If not, then I need to get at the issue attending to this person's emotion.” It's the classic difference between a thermometer and a thermostat. A thermometer reacts to the slightest change in temperature, and a thermostat sets the temperature around it. Because they have learned to manage their own emotions, good leaders can manage the emotional climate of their company.

Successors who are firmly grounded can look freely beyond the needs of their own ego to what the needs of the organization and its people are. When they aren't grounded, they resort to people pleasing and trying to tap down the emotion of those around them, rather than understand and deal with it.

This is critical for successors of a family business who need to separate themselves from a strong predecessor. They must communicate, “I am not my father.” Or as John Tyson did, “I'm not the Good Chicken Man.” Afraid to step out of the founder's shadow, some successors struggle to gain the respect and the support of the people, much less establish a culture where everyone feels like family. If the people see the successor merely seeking to copy the predecessor, they will have less respect for his or her ability to make quality decisions on his or her own.

The strongest leaders have a sense of the “I” in the “we.” Knowing who they are and where they are going, their egos are not pulled apart by the competing demands of the people they lead. Their challenge is to increase a sense of common vision when people naturally want to accentuate their differences and compete. Leaders must change the way followers see themselves, from isolated individuals to members of a larger group. To do so, they must model commitment, reinforce collective goals, share corporate values, and create coherence around a vision. A leader forges unity.

The rallying point for unity is a clear vision, which leaders communicate in ordinary ways every time they talk with anyone in their organization. And they never stop talking about it. In this way, leaders share ownership of the vision with the people and reinforce that they are key contributors to its success. The family teaches the values and engages the employees in an inspiring vision.

From Legendary to Ordinary

Generative successors who hardwire longevity into their family business have a genuine sense of humility that comes from being grounded. They stay humble, as strange as that sounds, in a world of personalities and personal branding. Their humility and accessibility tend to demythologize the legends. They avoid the trap of grandiosity formed by an egocentric mythology, which feeds the delusion that it's a one-man show. This, in fact, only perpetuates a leader's isolation from his people. Leaders step out from behind the curtain and reveal who they truly are. And they know their employees. They understand the impact of what each employee does and its contribution to the larger goal.

Differentiated leaders have the humility to discern the strengths of others around them, and they have developed a deep appreciation for their contributions to the success of the business. They hone their ability to get “the right people on the bus.” They have firsthand knowledge of what their employees are doing because they regularly get out of the office. They are willing to get their hands dirty, whatever that means in the business. They learn to speak the language of the laborer. Mary Andringa of the Vermeer Corporation remembers her father as a man of the people, who loved talking with employees. “He had messages that hit home with people,” she says. “My dad loved to go to job sites and get out in the field. When he was among the people, he was real. You can't ever underestimate how important it is to be there in the flesh, on the shop floor, to shake the people's hands, to tell them thanks for what they do. I learned from him to be hands-on, out and about and not in my office.”

When a leader stands in the trenches with the men and women who work for her business, she wins their devotion. A business is built in the same way a battle is won: at the front, with those in the trenches. Bill Wrigley traveled deep into the Indonesian jungle to visit families tapping rubber trees for Wrigley Spearmint Gum. He recalls a trip to Sumatra, riding with two other men on a rickety railroad track with gutted support beams. “We stuffed ourselves into this cart used to transport rubber, and one guy draped himself over my shoulders while the other guy kicked every third railroad tie to propel us. We picked up a head of steam and rode right into the jungle. All of a sudden, this family of Wrigley employees comes out of a tent, and it was like the Martians had just beamed in. For 15 minutes, we talked in the language of smiles while they showed us their camp. I finally understood the worldwide effort to put one piece of gum in my mouth.”

It took being out in the field for Bill to also understand its impact on his employees. “There is nothing like being on the ground with someone, and especially breaking bread with them—it's a bond you create with them wherever they are. Those people will still walk through walls for me, just for spending that time.”

There is a direct relationship between the health of the business and health and happiness of its employees. Financial packages and corporate perks are far less important than employee well-being. Research shows that family CEOs make less money than nonfamily CEOs, and private-company CEOs make less than public CEOs. In many cases, there's less emotional inflation of salaries, with financial compensation tied to the reality of what's happening on the ground.¹ Money in well-run family businesses tends to be more equally distributed, without extreme disparities in employee salaries.

When the Magnetic Center Is Gone

A successful family business is created by the vision of its founder. To survive across generations, the vision must outlast him. If a leader's personality is the centrifugal force of the business, it may stop when he or she does. As Dick DeVos says, “When a personality dies, the magnetic center is gone,” and the business often falls apart.

To create a sustainable organization, a leader must maintain a network of talented people who are loyal to a vision (what the leader stood for), not a personality (who the leader is). The founding fathers of the United States drafted a vision statement that distilled the best of America's dreams. It is the Constitution that we uphold, not the people who framed it. This vision has sustained the United States as a world leader from generation to generation. In a similar way, a family business vision carries the family values and helps the business to grow beyond the mythological image of its founder. It creates opportunities for generations to come. It is the generative successor that taps into this and builds on it.

A differentiated leader is also humble enough to serve his or her own vision, and has the foresight to be a steward of the brand and not its lord. As Christie Hefner, former chairwoman and chief executive officer of Playboy Enterprises, says, “I considered my role to be a steward of a brand, of a culture, of shareholders, of employees. I had an obligation to serve those masters.” Because she had a long-term stake in the brand, Christie says, “I had an emotional stake in the people. This helped people…support me and follow me.” A visionary leader puts systems in place that do not allow egos to run unchecked, starting with his or her own. The leader is the first person to serve the system.

One thing that makes us human (mortal) is the yearning to serve something larger than the self, and the ability to resist our impulses in favor of some larger purpose. The leader models a culture where what's good for the group trumps self-interest. Self-interested employees are more interested in looking good and getting promoted than in helping the company.

Feels Like Family

If corporate culture can be defined in layperson terms as “what it's like to work around here,” the ultimate compliment from an employee is, “It feels like family here.” It's a cliché, except when it's reality. Successful family businesses weave the founding family values into the fabric of the business.

Family values are the soul of the business and create the business culture in which each individual feels like he or she is essential to the fabric of the company. But at the same time, there is an environment of accountability to each other, the mission, and the vision. Under the umbrella of values, employees feel cared for like family. They feel empowered. They show initiative, creativity, and leadership within their sphere of influence. And they believe their voices can make a difference in how the company is run. They are held accountable for their actions and performance.

In many companies, employees are often valued more as a commodity than a person of influence. The irony is that the people are a company's source of creativity and innovation. A leader can't inspire a machine. But when people are inspired, they feel valued. And when people are valued, they become valuable. This is the wellspring of energy that a successor can tap into.

Family businesses don't exist solely for money. If the goal were only money, they would take the business public or sell the business, and when the wire hits the bank, they would do something else. Many family-owned businesses would say its assets are what's on the balance sheet, but their wealth is their relationships, their reputation, and what they give to the community. Because of this, family-owned businesses tend to value people, not just the company assets. They don't see employees as merely a number or a budget line. They are quicker to understand the human reality of corporate downsizing and are slower to lay off in down times.² Family businesses invest more in resources and training.³ Perhaps born out of a sense of personal responsibility, generative family business successors take better care of their people as an asset of the company.

More like primary-care physicians than specialists, family business owners tend to be more in tune with their employees' overall well-being than their counterparts in publicly held firms. Many are quick to address employee groaning, optimize employee strengths, and reward employee contributions. In short, they commit to employees, and, as a result, tend to hold on to employees longer.⁴

Family business is not just about the bloodline but also about the lifeblood of the organization: employees. They are the reason a family business succeeds in a roiling economy and its mission reaches the community. Often, employees are loyal from generation to generation. One way that successors of family businesses build this loyalty is by pushing down decision making as far as they can through the organizational structure. By doing so, people on the front line attach what they do to the mission and vision of the business.

Small businesses tend to do this much better than large corporations. Large corporations use a series of institutionalized carrots and sticks (usually, a combination of policies, procedures, and monetary rewards) to motivate employees to act in a way the company desires. People are drawn to status and a paycheck rather than to the values of the organization. This is the classic climb up the corporate ladder: Success is measured by how high up the ladder one goes, along with increasing monetary rewards at each rung. Large corporations are people-challenged, because, with exceptions, they tend to treat people as a commodity. Employees then tend to feel less ownership of their jobs, and, consequently, their unique contribution to the corporate mission. Employment becomes a transaction: my work for your pay.

A differentiated leader elicits the opposite response from employees. It's a kind of leadership that activates pride, loyalty, and enthusiasm about the mission and vision of the organization. The almost paternalistic feel of working for the family elicits a feeling of being cared for. Employees receive a sense of emotional return as they work to add to the financial return. Regardless of role, title, or position, employees who feel they are part of something great will contribute to making the company greater. This approach to leadership generates social capital—the bonds of trust that hold a hard-working community together. Trust comes from listening, reflecting, and communicating that each person is valued in the organization. When people feel valued, status and salary are still important but not primary. A great leader enjoys talking with a truck driver as much as she likes talking with her COO. To value employees is to listen to them. As Chester Sykes put it in the mission statement for Label Makers, Inc. (now LMI Packaging Solutions), “This is a place where employees have a voice.”

Differentiated leaders understand that people respond and perform better when they are intrinsically motivated. I liken intrinsic motivation to internal credibility, the degree to which a person feels he or she has value.

In his New York Times best seller, Drive, Daniel Pink explores the reality of what motivates people at work.⁵ While exploring this theme, Pink looks at the traditional carrot-and-stick approach to motivating people. He found that while the approach might work for simple tasks, it doesn't work for the more complex tasks that most employees are engaged in every day. Pink found that to motivate people in complex tasks, leaders must give them autonomy, mastery, and purpose: all things that family businesses are well positioned to provide. If leaders want engagement from people, they give them autonomy, the freedom and space to do their job. Mastery is the desire to get better at something that is meaningful to us. A sense of purpose comes from the vision of the family and aligning our talents and expertise with what the system needs.

Through a focus on their people, generative successors create an environment of trust with their employees and give them the autonomy to do their jobs. As John Tyson sees his goal as providing opportunity for his people, the generative successor delights in seeing their people build skills and improve at what they do. And, finally, the vision that they cast gives to their employees a sense of meaning and purpose to their work.

I believe that family businesses are better positioned than any other economic or commercial institution to provide intrinsic motivation. Businesses build value by prioritizing the value of people, and helping them feel valuable.

More than Money

“Money talks, but it don't sing and dance and it don't walk.” American singer-songwriter Neil Diamond tells us why the dollar is not almighty. Money rewards people, but it doesn't celebrate them. What employees need is more basic and more powerful than money. It's the recognition that they are valuable, they belong, and their contribution makes a difference. Leaders reward people with money; they celebrate people with recognition.

A CEO doesn't rally his people by talking about what he or she is doing for them. He shares the glory. Generative successors embody Level 5 leadership, a term coined by Jim Collins in his bestseller Good to Great. They “channel their ego needs away from themselves and into their larger goal of building a great company.”⁶ Generative successors think first of the family business system and not themselves. Nothing inspires a group more than the story of a common person who embodies the business's values and inspires everyone else to uphold those values. Leaders talk about success by celebrating the people who make the right things happen, or prevent the wrong things from happening. Small or big, it doesn't matter, because it all matters.

A leader asks, “Do we recognize the people who help us solve problems and create opportunities?” as well as, “Are we intentional about celebrating those contributions?” There are practical and structural ways leaders can do this, like awards programs. A family I work with invested in an awards program that revolves around the company's seven values. Every year, employees nominate each other to receive awards for upholding the values in some way. The family leaders not only reinforce their seven values, but they also celebrate an eighth tacit value: the people who demonstrate the other seven. Along with the recognition come the stories of what these employees have done.

Telling a collective tale of what the business is accomplishing together is one way of sharing the success of the family business. It also staves off the creation of a mythology of the successor. Media celebrate the monolithic leader. Humans want a hero, someone that they can connect with. And it's simpler to tell a story of a hero than the heroic feats of many. Though more complex to tell, the stories that celebrate supporting players are richer because they reflect a group that has cumulatively sacrificed for the greater good of the organization's mission. Humble leaders avoid the trap of narcissistic grandiosity and share the credit with others.

Leaders cannot develop this sense of humility without differentiating—the process by which they have developed internal and external credibility. The undifferentiated leader is happy to be the hero the press is clamoring for. The accolades stoke an ego beleaguered by insecurity. However, the hero story alienates family members and employees. Undifferentiated successors subtly allow a new family business myth that creates a shadow for the next generation. In contrast, differentiated leaders look for ways to share the glory and take responsibility for failures. They understand that people are valuable to the organization when they are valued. One of the best ways a successor can create unity around his vision is to let his people be the heroes of the success stories.

Dream Weaver

But stories aren't enough. A leader must also tap into his people's deepest imaginations, the place that spawns their dreams for the future. The family business is not just a place to put in a good day's work; it's a place that kindles people's imagination, encourages them to dream, and helps their dreams come true. The best leaders want those dreams to become part of a company's ongoing story. They look for ways to weave those dreams into the larger vision.

Dream work is advanced-level leadership. The leader has already demonstrated a commitment to employees when he or she encourages them to take ownership and pride in what they do for the business. But helping people achieve their own dreams is the ultimate proof that they are valued. It encourages them to take ownership of their lives, and gives them hope for a better future (sometimes apart from the organization).

Mike Hamra, CEO of Hamra Enterprises, has developed a “Dream Manager program” and placed a “Dream Manager” in charge. The program encourages employees to articulate their dreams, everything from “I want to run a marathon” to “I want to own a house” to “I want to work in the fashion industry.” The Dream Manager looks at how the organization can help them make it happen.

Dream work acknowledges that a business dreams along with its people. Leaders recognize that the business improves as its people live into their dreams. But the genius of Hamra's program is that it tells people that their dreams start now, so that they become more passionate and feel more connected to what they are doing now. These are not “beautiful dreamers” who look out the window when they should be working. These are industrious dreamers who engage in their work because they know it is work that makes their dreams attainable.

Mike Hamra trains competence and confidence so that his people know they can get another job if that is their dream. He doesn't want people staying at a job with Hamra Enterprises because they are afraid they can't do anything else. He wants them on fire.

The Brick Wall

In family-owned businesses, the emerging leader often struggles with credibility, as I've argued through this book. Successors typically hit two kinds of walls: the wall of their own insecurity and the wall of family resistance. Some leaders feel insecure when they inherit the crown. If they feel they didn't earn their title, they may look for ways to prove themselves, sometimes taking credit when others deserve the credit, as I've already discussed. This is classic image management. They waste energy crafting an image of credibility as a leader. Invariably, the attempt backfires. People can smell out insecurity and the inauthentic attempt to mask it.

Fearful leaders preoccupied with image management shut down on their people. They isolate themselves, stop listening, and try to consolidate power rather than empower their employees and bring out the best in them. A leader's greatest asset—the leadership team and employees—then becomes a liability, but only because a leader projects his or her insecurities on them. In reality, the people are not the problem. The leader is.

Most families of family-owned businesses are committed to their people. However, in times of crisis, when a leader's strength is most needed, an insecure leader generates fear instead of trust. Fear intensifies misperceptions and distorts reality.

Trust is the family currency. When it is depleted, a family starts to eat away at its assets and compromise its values. It will abandon the commitment to the philosophy that its people are the business's greatest asset. When differentiated leaders hit the double wall of insecurity and family resistance, they bounce off and redirect. If they can't move the wall, they move themselves: “Maybe it's time that I shift.” The shift is from victimhood to ownership. Mike Hamra tried to push his dad out of the business. Yet when he realized his dad needed to be connected to the business in some way, he was able to make the shift to “OK, well maybe I need to shift to figure out how to keep him connected to the business in a productive way.” That type of shifting is helpful to the business long term.