Should there always be one person in charge in the FOB?

Business Leader Post, November 20, 2013

Thomas D. Davidow, Ed.D.

Not necessarily. I know that suggesting that two people share the role of a CEO in any business goes against prevailing wisdom of most leadership models both in business and in government. The problem with family owned businesses is that the family dynamic cannot be eliminated or discounted as an issue that has to be taken into account when designing a leadership model. We know that if the family dynamic does not have coherency with the business model, then that family dynamic will eventually wear away at the business model. The erosion starts with discomfort and will morph into conflict. That conflict eventually trumps the effectiveness of the business model and both systems—family and business—suffer.

The answer to what is the best model is based on what the family members are most comfortable with. The evolution of the model begins with dialogue and communication with all the family members agreeing on developing a model that will work best for the business. I have seen many varieties. There is the model where siblings have their own area of authority and responsibility and come together on well-articulated decisions that require both of their input. There are models where each sibling has an area of expertise. For example, one sibling may be the CEO, while another sibling can have the final say on operating decisions with a board of directors of stockholder meetings to whom the CEO is accountable. That arrangement provides the non-CEO sibling with a voice and authority.

The point is that one should not assume that there is a standard model that will work for your family. You cannot buy this “suit” off the rack. It will have to be custom made. It will cost more in the beginning, but it will fit better and last longer.

I will never forget the time that I walked into a family business with five brothers/owners. They had lost their father at an early age and consequently had been supporting each other since they were kids. One of the brothers was on the phone and shouted out that there was a guy on the phone who wanted to talk to the CEO. He then yelled, “Who wants to be the CEO today?” That was clearly an unusual model, but one that was consistent with their relationship/history.