As businesses and families evolve, promoting meaningful involvement and engagement of members in the enterprise presents a challenge. As one sage family business leader suggests: “entitlement and wealth become the enemy”.
Most families that have effectively addressed the challenge of engagement pursue what pioneering family business scholar Ken Moores refers to as the “Big Tent” approach. It’s the idea that family leaders prefer their growing number of family members inside the tent, where they are provided appropriate education and other development support for meaningful roles, rather than outside the tent, where they may become suspicious of what’s going on inside and even tempted to sabotage it, whether intentionally or not.
Thus a Big Tent approach sends a strong message, particularly to next-generation members and married-ins, about their potential value and contributions to the enterprise—and the importance of having them involved. But it requires careful, strategic orchestration.
Indeed, with an increasing number of families worldwide committed to pursuing family governance initiatives, they are in effect developing their own, idiosyncratic Big Tent approaches. Specifically, they are setting clear guidelines for how family members can engage meaningfully with, and contribute to, the family and its increasingly complex and challenging business activities.
When I share my observations of families who pursue the Big Tent approach in various lectures and presentations, no matter the country or audience, the metaphorical concept usually makes intuitive sense to listeners. But it’s only when I describe what it feels like to be left out of the tent that the message really hits home.
The main example I share is from when a founding generation explained that they wanted their legacy to be a family enterprise that survived across many generations. Immediately after, they stipulated that the wives of their two sons were not to be included in business conversations. When they were delicately reminded that the wives were the mothers of their grandchildren and therefore significant influences on how the third generation would see the business, and that it may thus make sense to “bring them into the tent,” they reconsidered and committed to establishing meaningful non-operational roles for their daughters-in-law.
Other, similar examples, such as of married-ins who are excluded from “family” meetings, also tend to hit home. Still, inclusion for the sake of inclusion can be interpreted as—and likely is, in most cases—a token gesture. The key, then, from my observations of insightful multi-generational family businesses, is to ensure that individuals are ready, willing and capable to contribute in a meaningful way.
I must emphasise the tripartite nature of this set of attributes, as suggested by the use of the word “and” rather than “or.” That is, the omission of any one of the three qualities—such as being ready and willing but not capable—means potential disaster, or at the very least a far from ideal situation for the family and enterprise. Being ready, willing, and capable to contribute is mandatory.
This discussion also raises the question of what it means to contribute to the enterprise. Again, observing families who spend a considerable amount of time getting this right, an ideal way to promote contribution is to design meaningful pathways to contribute. There’s no one right set of such pathways, but examples include an executive pathway, manager/supervisor pathway, enterprise pathway, family office pathway, family governance pathway, business governance pathway, and family philanthropy pathway.
Each of the pathway-related roles comes with a distinct set of requirements, responsibilities, and remuneration that must be clearly articulated. See again my earlier caveat that all elements of the Big Tent approach require careful, strategic orchestration.
How does it all come together? Back inside the tent, when a family member who does not work in the business understands that there are meaningful ways that they can engage with the enterprise, such as through a family office or business governance role, they are likely to feel valued.
Likewise, a married-in will feel included when they hear about opportunities to get involved in the family’s philanthropic activities. Or, when a rising generation member finds out about the enterprise pathway, they will enthusiastically consider the family business a venture partner they may need in the future to execute on their entrepreneurial vision.
Whatever the exact circumstance, the Big Tent approach helps the full range of family members to see new opportunities to contribute and to understand the need—and expectation—to have the required skill sets to deliver optimally in a given appropriate role. That is, they recognise the importance of being ready, willing, and capable of contributing to the enterprise.
These issues and much more are the focus of my forthcoming book written with Ken Moores: Leading a Family Business: Best Practices for Long Term Stewardship (available July 2017 from Praeger)
Dr Justin Craig is Clinical Professor of Family Enterprises and Co-Director of the Center for Family Enterprises at Northwestern University’s Kellogg School of Management