When leadership resists the need to integrate a new technology platform that is necessary to compete in today’s global marketplace, the continued success of the business is threatened.
- Ever-changing demands of an industry can lead to the ultimate demise of a family business
- Family business is inherently risky business.
Christine A. Maginn, Ph.D.,(Psychologist), M.B.A., programs with senior executives, managers and support staff, as well as, family businesses and entrepreneurs.
The result of the convergence of my background, training and experience as a psychologist and MFT with my passion for business that arose out of growing up in an entrepreneurial family.
Over the years, she has worked with entrepreneurs, small business owners and organizations. Much of that work has centered on executive coaching and leadership development, as well as providing training and EAP consulting to corporations.
She found that many of the skills that she had acquired over the years are transferable to the “soft skill” side of family business issues.
Having an MBA has greatly improved my ability to better understand the gaps between the people skill side of running a successful business and the bottom line profitability that companies must achieve in order to survive.
When individuals within family businesses get stuck and cling to the past way of doing things, inter-generational conflicts are often ignited.
For example, when senior leadership resists the need to integrate a new technology platform that is necessary to compete in today’s global marketplace, the continued success of the business is threatened.
The inability to adapt to the ever-changing demands of an industry can lead to the ultimate demise of a family business.
However, working with multi-generations of family members as they move through the various lifecycles of a business in such a way that helps them develop greater flexibility in their thinking, adapt more readily to the ever-changing global marketplace, and align their core values and strategic objectives, she can help families create a sustainable business model.
Family business is inherently risky business. According family businesses comprise between 80 and 90% of all business enterprises in North America. Within the next five years, the leadership of 39% of family-owned businesses will have changed hands. Only 12% of family owned businesses will be viable into the third generation and 3% into the fourth and beyond.
She outlines some of the critical factors that she, and other family business consultants, can and should address where appropriate to help families move from being stuck in certain areas to refocusing and implementing best practices that help facilitate their success.
What leads to failure and success of family businesses?
Below is a framework that I have found very helpful in working with clients:
Risk of Failure vs. Keys to Success
Secrecy vs. Open communication
Rigidity vs. Flexibility
Rivalry & confusion / Teamwork & collaboration
Antagonism / Mutual respect for differences
Legacy mindsets / Creativity & innovation
Fragmented values & goals
Alignment of core values and strategic objectives
Leadership with a myopic vision
Leadership with a clear vision
Lack of depth of new leadership
“Some day” mentality Succession planning
Disempowering acts / Empowering acts
Antiquated business model
A business model that fits with the developmental phase of the business
Random strategies & tactics
Implementation of best practices
Promoting family members to positions well beyond their current abilities
Acquisition of necessary business skills that fit job requirements & a willingness to hire talent outside the family when necessary
Consequently, there is a growing need for family businesses to hire experts that can help families successfully resolve conflicts and maneuver through the sometimes sensitive issues related to succession planning and transfer of power.
Psychologists have many transferable “soft skills” that can help individuals within family businesses work to improve communication, resolve conflicts, address inter-generational differences, enhance leadership skills, help families align their core values and strategic objectives, build effective teams, and work together in a collaborative manner, in order to enhance the sustainability of their company and thrive in today’s global marketplace.