This is the third in the February series of “Blogs from the Board.” Thanks to Debbie Bing for her blog on “The Moment You Can’t (or Better Not) Ignore.”
As an advisor to family businesses, I spend countless hours finding creative ways to help clients identify and address roadblocks that are getting in the way of achieving their goals. More often than not, these issues have been ignored or worked around for years, because people fear that raising them will do more harm than good. Yet the issues we’re naturally afraid to discuss are often the most essential for a family business—succession plans and career interests, performance, money and inheritance, aspirations for the future.
My firm’s new book, The Moment You Can’t Ignore, focuses on events that bring the vital issues facing an organization into focus–moments so dramatic and disruptive that they command the attention of the entire organization. These moments can lead to organizational paralysis, or to the release of incredible forward momentum. What happens depends on leadership. Effective leaders recognize unignorable moments as opportunities to boldly forge a new path, changing the course of the future in ways that enable continuity and success.
I recently read about such a moment at the 150 year-old brewing company, Heineken, when sole heiress Charlene de Carvalho went, overnight, from owning one share of the company—valued at roughly 25.6 Euros (then $32)—to having 100 million shares and voting control when her father died (for more, see A Self-Made Heiress, Fortune Magazine, December 22, 2014). Carvalho was not atypical of children of controlling patriarchs. She was on the board but largely uninvolved, unknown to employees, a stay-at-home mother with no formal business training, operating under the radar. Yet when suddenly and very publicly faced with the choice about what to do (she called it her “wake up call”), she seized the reins and launched an incredible new chapter for Heineken. With the partnership of her husband, Michel de Carvalho, she transformed a company struggling with growth and increasing competition into a formidable giant. Since taking the helm in 2002, she has tripled sales, expanded from 39 countries to 71, while remaining ardently committed to maintaining family ownership.
How do you know when you’re facing an unignorable moment? While no two look exactly the same, they share some characteristics:
- They are visible. In a family business, an unignorable moment may never be visible outside the family, although it likely impacts both family and company. Sometimes, however, the unignorable moment captures the attention of everyone. This was the case when the Heineken story broke. Employees, investors, competitors, and family members waited to see what Carvalho would do.
- They are irreversible. When an unignorable moment occurs, it’s clear that things will not revert to the way they were. Early in her tenure, Carvalho replaced the CEO, changed the Board and launched an aggressive acquisition strategy including re-branding. She read the signs of a company that had lost its edge, seizing the moment with sweeping, strategic change.
- They are systemic. Unignorable moments are not just about the individuals most immediately involved. These moments are about larger systems of stakeholders, beliefs, history and culture. Carvalho toured offices around the world, listening to the views of employees about what could be done better, and what must be preserved. She listened closely to the signals of needed change, turning an event that could have been painted to be about her, to one that forged a path for re-staging the business.
- They challenge identity. These moments call into question the identity of the entire organization: Who are we? Why do we do the work we do? What will we have to change? Carvalho had to contend with a deeply embedded culture that accompanied her father’s long-term leadership, and challenge some of his assumptions about risk, growth and what winning meant, to take the family’s legacy forward. The next set of identity questions lies just around the corner as Carvalho considers the succession plan and the roles of her four adult children in Heineken.
Thankfully, families don’t often have their “moments” show up so stunningly in the public eye. But whatever the trigger, it is incumbent on us as advisors to help leaders not ignore them. There is much to learn from Charlene de Carvalho about the courage to take on what might be easier to ignore. The potential outcome of paying attention can be spectacular.
About the contributor:
Debbie Bing, an FFI Fellow, is a principal at CFAR and a member of the firm’s next generation of leaders. She heads up CFAR’s Boston office and is a member of CFAR’s board of directors. She also co-leads the firm’s Family Business and Owner-led practice group. Debbie was recently elected secretary of the FFI board of directors. She can be reached at email@example.com.
Go here to read about The Moment You Can’t Ignore
Yours in Practice,