I saw John sitting nearby for breakfast and, in the spirit of an international conference, we glanced at the other with a smile. Though we had only barely met the day before, John joined me for a meal. How nice!
John is a long-time Chair in Dianella, Western Australia, where he has attracted members who are in family businesses — closely-held companies that are each led by two or more members of a family, with the prospect of the ownership being transferred from generation to generation.
John generously taught me about the dynamics of family businesses.
Who is the CEO?
John said, “Every family business has a CEO: Chief Emotional Officer. This person is the primary influencer of the emotional momentum of the business and the family’s emotional connection to that business. Each family business has a CEO and it is important for the family to know who the CEO is.”
An Emotional Officer?
When John first proposed the idea of a CEO, I had immediately assumed it was a person who was an emotional crazymaker, the person who stirs the pot and mires a family business in a series of intra-family squabbles.
But my assumption is little more than my own headtrash, based on too little experience with family business. My father was a stockbroker, so I learned about capitalism from the investment side, not from the asset generation side. And, for all my tangible and intangible inheritance, my parents did not own an operating business that could be transferred to my siblings’ generation. Our family business has been working and saving, investing in equities and education.
I’d always thought us lucky to not have a family business. I’ve watched friends (including Vistage members) with family businesses and wondered: when is a family business a blessing and when a curse? I’ve seen third and fourth generation inheritors of great wealth — in the form of a business entity — see that inheritance as golden handcuffs.
On the other hand, I have quietly thought, “Huh. I’d like to try on those handcuffs.”
But one person’s handcuffs are that person’s handcuffs. It’s not for me to judge them as ungrateful for the ‘cuffs.
A Question Worth Asking
During the past month, I’ve asked a couple family business leaders, “Who is your Chief Emotional Officer?” The answers have surprised me. Emotional officers aren’t necessarily crazymakers.
“It’s me,” said one. “That’s an important part of my job.” Another: “It’s [honored family leader]. I rely on [that family leader] as our Chief Emotional Officer.”
In these cases, the family enterprises are not threatened by emotional familial squabbles. With appreciation for the good emotional health of the business, managed by a CEO, the emotional momentum is a competitive advantage. Other companies can lever other connections, but they can’t imitate familial care, collaboration and bonds.
I’ve thought the difference is slight. The conversations about CEOs has led me to believe that I’ve under-appreciated the difference.
Anyone who runs — or works in — a family business can tell you: family businesses are different.
Who Is Your CEO?
If you lead a family business, who is your Chief Emotional Officer? Look to the person who sets the mood, who — with a glance and a grimace, or a squint and a smile — can turn the direction of deliberations toward the heart of the matter.
Who is the CEO in your community? Who is the CEO of your family? Is that CEO able? Deserving of the CEO role?
Who is the CEO in your individual life? (Hint: look in the mirror.)