Thanks to Allan Cohen of Babson College and Pramodita Sharma of the University of Vermont and the editor of FBR, for their thoughtful article, “Building Entrepreneurs Across Generations Requires Influence,” on the relationship between influence and entrepreneurship from a generational perspective.
Building Entrepreneurs Across Generations Requires Influence
When Allan R. Cohen and David L. Bradford first published Influence without Authority in 1990, most companies were hierarchical and running on principles derived from the military or early bureaucracies. Leadership models were mostly heroic, with the assumption that there was a designated leader at the top who was responsible for and knew and controlled everything, gave orders which were mostly followed, or punished those who did not follow them. Although in practice plenty got done informally, organization charts never fully accounted for what it took to make things happen. Experimental models like matrix organizations were invented to work across boundaries where full control could not be assumed. Family businesses largely stayed under the radar, as did the notion of influencing without authority.
A combination of rapid technological advances, global competition, longer lives and fewer wars changed it all. Technical expertise often resides in the younger generation, while the wisdom lies with seniors. Four or even five generations are simultaneously in the workplace, as the notion of family is constantly changing. The entrepreneurial spirit to innovate must be imbued deep in the veins of a family and its enterprises. Influence without authority is not unidirectional anymore but must be exerted by juniors, seniors, men, women, blood relatives and in-laws, family and nonfamily members, to negotiate the pace, nature, and scope of innovations in the work place and at home. Initiative is vital at all levels of the organization and family. Entrepreneurial spirit and initiative cannot be coerced.
How do some families manage to overcome the odds and generate successful enterprising companies across generations? In our search for answers to this question, we looked at patterns that emerge from successful enterprising families around the globe. A common theme is that they work at individual, organizational and familial levels simultaneously. The seeds of curiosity and work ethic are planted in individuals, fertile organizational soil is readied to absorb and grow these seeds of innovative ideas, while families provide the nurturing air and water to develop entrepreneurs in every generation.
Traditional hierarchical leadership methods, where father/mother/founder/top person always knows best in family or in business, and can just issue orders about all important decisions, does not produce the requisite initiative and ideas from all levels. Successful entrepreneurial leadership increasingly calls for “ambidexterity,” the ability to do apparently opposite things when appropriate, including driving efficiency at times while encouraging experimentation and innovation at others. Since initiative will be needed at all levels of the organization, influence becomes an increasingly important skill.
In family businesses, the need for influence arises at many interdependent levels. Advisors need to be able to influence the influencers. That includes senior family members, who may be too quick to reject new ideas or methods out of concerns for protecting family assets, and next generation members, who may be impatient to try what they have learned and do not show sufficient appreciation for the accomplishments of the senior generation.
In our book, Entrepreneurs in Every Generation: How Successful Family Businesses Develop Their Next Leaders, we developed a dozen “Iron Laws of Influence for Enterprising Families” that apply when people will be dealing with each other over long periods of time, and where relationships are all important. For example:
- Influence is built out of reciprocity and exchange. People allow themselves to be influenced because they believe that in some way, sooner or later, they will be “paid back” with something they value.
- Know the currency others value. See which you have, and make an exchange that allows each to win and feel satisfied. In families, that which is valued may be love or emotional support, and the temporal span may be across generations.
- Treat every new goal as an experiment or pilot project. Create data, learn from it, and adjust as you go. Let others help.
- Be thoughtful, kind, and generous to even the lowest-level people in the company. Not only will your kindness always be appreciated and repaid, but it is worthwhile in its own right. And you never know what others know that they will choose to tell you, if they feel you are worthy.
To preserve longevity, family businesses need to create organizational practices that engage as many as possible in collaborative behavior.
The core influence model can be taught to any family members. Seniors can learn how to influence next generation and non family members by listening to their desires for learning, having responsibilities to be in charge of something whole and chances to test themselves, being given the chance to prove themselves or fail and learn, wanting to honor the family name through possibly trying different methods, feeling like responsible adults, etc. Next Gen members can learn that seniors are more likely to respond when their experience and wisdom is honored, their caution or boldness is understood in the context of family history and life stage, their respect for hard work and paying dues is fundamental for anyone in business, etc. Helping everyone learn to listen to the others’ currencies before leaping to judgments, and only then to respond, is a major contribution, and can help get past many business, as well as family, logjams.
It is worth mentioning that the same model of influence applies to advisors in dealing with clients, actual or potential. You influence them when you offer what they value and not just what you prefer — the fundamental principle of sales and negotiations 101.
About the contributors
Allan Cohen and Pramodita Sharma are co-authors of Entrepreneurs in Every Generation: How Successful Family Businesses Develop Their Next Leaders.
Allan Cohen is the Edward A Madden Distinguished Professor of Global Leadership at Babson College. He can be reached at firstname.lastname@example.org.
Pramodita Sharma, FFI Fellow, is the Sanders Chair and professor of Family Business at the University of Vermont and the editor of FBR. She can be reached at email@example.com.