Advising / Consulting / Family Business Review / Issues in the Family Enterprise

Developing Positivity in Family Business Leaders

The Practitioner

(Authors: Donella Caspersz and Jill Thomas)

Research Applied summary prepared by Wayne Rivers, Family Business Institute

Working with the cooperation of the Family Business Australia FORUM, the authors studied a leadership intervention in a group context (a.k.a. peer advisory groups) over a five-year period. Their qualitative study explored how this intervention helped develop positivity in leaders of family businesses. Positivity means having positive attitudes, emotions and capabilities.

Why is positivity important in the context of family businesses? The authors state that “[w]hen relationships are as long-term as they are in a family, family expectations exert a major influence on the task of leading and managing a family business. Family business leaders have to respond to a level of ‘emotional messiness’ not found in nonfamily business…” The section of this article entitled “The Concept of Positivity in Organizational Scholarship” provides an excellent overview of the concept of positivity and a related concept called “positive psychological capital” or PsyCap. “At the organizational level, PsyCap (who you are) potentially combines with human capital (what you know) and social capital (who you know) to provide a unique, in-house resource that is rare and difficult for competitors to imitate, thus providing a firm with a unique competitive advantage.” Positivity fits hand in glove with PsyCap.

While not necessarily the focus of the research, this article is a ringing endorsement for the power of peer groups in developing executive talent via a quasi-board of directors setting. Peer groups provide the following for family business leaders:

  • A safe place where they can interact with others who are facing similar leadership challenges; it fosters a community of practice that nurtures positive family business enterprise leaders and managers.
  • An advisory board that assists them with the ongoing monitoring of the strategies they pursue to manage both family and business.
  • A support mechanism to manage the emotional challenges that occur in a family business.

On the subject of his/her peer group, one participant said the FORUM “allows you to make decisions with confidence… you actually test your views or whatever else with a range of other people potentially before you actually enact them… If you are having troubles from a family perspective, you can talk about them within the group and get strategies to get the desired outcomes…” In case one doesn’t recognize what the speaker is saying, he/she is describing a type of family business consulting intervention. The difference in this intervention from the ones with which most practitioners are familiar is that the consultant isn’t a professional family business advisor but rather is a risk-taking peer of the family business leader in question.

Practitioners might be humbled to find that customer satisfaction ratings for peer group consulting far exceed those for traditional one-on-one consulting services. We found that because the peers serve as consultants to themselves, interventions are much more easily delivered and rationalized, recommendations are more readily accepted, and accountability improves as peers, at future group meetings, must defend their actions or inactions in implementing group recommendations. This arrangement allows for the professional family enterprise advisor to shift into a higher level, strategic role and keeps him/her out of some of the less important and often messy distractions that accompany family business interventions. And because peer groups tend to be perpetual  whereas typical one-on-one consulting assignments tend to have finite durations  peer groups have a better chance at producing long term success (low intensity over a long duration vs. high intensity over a shorter duration).

Practitioners and family business members should recognize that positivity in family business leaders is important for any number of reasons and that leadership intervention in a group context  the peer group  is an amazing and underutilized tool in the development of family business leadership, operations, and financial capabilities. Peer groups can be found in industry groups, university-based family business programs (for a listing of educational programs check http://www.ffi.org/?educationcenters), trade associations, Young Presidents’ Organization, to name just a few.

Practitioners and family business members will find this an interesting article to read in order to learn more about peer groups, positivity and the benefits that can accrue from both. The quotes from the study participants are particularly enlightening.

About the contributor:

Wayne RiversWayne Rivers, an FFI Fellow, is co-founder and president of the Family Business Institute in Raleigh, NC. He can be reached at wayne.rivers@familybusinessinstitute.com.