A global Amrop study⁸ asked senior executives about their due diligence on hiring organizations. Most consulted multiple channels, both within an organization’s control, (such as websites), and outside it, (such as the opinions of employees). Only a third sought data and facts direct from the organization. Given the discretion of the family-owned businesses, such information may be elusive. And even that is not enough. 

Top tips 

Ask your executive search consultant for insights on the FOBs top management: its configuration, the role/s of family members, decision-making processes and your (real) mandate and involvement - beyond the job description. Seek clarity on the (vital) integration plan: milestones, stakeholders, governance and chief custodian. To understand the motivation for and commitment to the search, ask what factors prompted an external hire. Consider transition coaching to enhance awareness of your behavior patterns and outcomes, propose interventions and new interpretations of challenges⁹. As a newcomer you must now navigate an unfamiliar ecosystem, one which may feel impenetrable. Be more ‘dispassionate naturalist’ than ‘slash and burn’. Learn which areas can be cultivated, re-positioned, re-shaped or integrated to support the environment.

As this Amrop Partner says: “If you put into a family business the best person in the market who shoots the lights out for private equity you could come off the rails because they're going to challenge the owners to take on risk and debt. And family businesses don't like that.” Instead, it is important to understand the terrain, identifying areas that can be cultivated, re-shaped, repositioned, or integrated in a way that supports the environment. 

An exploration of boardroom functionality points out that a daughter or son may receive senior role in a family business at an age when they would (at best) hold a middle management position elsewhere.¹⁰  Executives need to be alert to both the advantages and disadvantages of this. 

Pedro Ferrer, Deputy Chairman and co-CEO of Freixenet, the global leader in sparkling wines, is a positive example of a family member who literally grew up with the product. “As a small boy I played by the cavas, which are a part of my life, and I always had the idea that that was where my future lay.” ¹¹ After studies in economics, ecology and viticulture Ferrer started work at the Freixenet Group from the ground up, first as a production assistant and then in sales. After a further eight years’ study in Spain and California he moved to a senior role in Freixenet’s USA office and was appointed CEO in 1998.  

Top tips 

As a newcomer, blend functional knowhow with emotional maturity, collaboration over competition. Build bridges, play a positive and supportive role. Do not only dig for insights on the factors that make the FOB tick, but do so in the right way: via constructive questioning, not relentless integration. Asking, active listening and dialogue nourish visibly important relationships and reveal the more subtle networks. If you then understand which topics you can manage, the owner will be more likely give you autonomy. 

Despite heated discussions in private, FOB’s “are mostly not conflict oriented,” says this Amrop Partner. “If you tip up the apple cart, you become difficult.” Another warns: “Never show off. Never.” Of course, demonstrable functional knowhow is vital. But so is emotional maturity. Family members “never want to see someone competing with them at the power game level.”  

A family-owned business expects more from an incoming executive than big ears and a winning smile. Having identified the zones of continuity and change, it is now time to set the strategic road map. Together with humility, diplomacy, collaboration and patience, this is where leadership indicators for the ‘change’ side of the spectrum truly enter the frame. “When it comes to business performance and transformation, you need to be on the ball and deliver,” says this Amrop Partner. The 4 leadership qualities of transformation, entrepreneurialism, agility and focus are all essential now.  

Top tips 

Leadership versatility means you can resolve the tricky paradox of continuity and change. And this is vital because despite the long-term culture of an FOB, you’ll be expected to deliver just as in any other organization. On one hand, exercise the 4 leadership styles of patience, collaboration, diplomacy and humility (continuity). On the other, transformation, entrepreneurialism, agility and focus. If you are leveraging experience gained in a listed multinational, avoid ‘when-we’ language. It is time to diplomatically adjust your know-how to the new. 

You have asked the right people the right questions in the right way. Identified the quick wins and the long-term road map. Distinguished the ‘nice-to-haves’ from the ‘must-haves’. Determined which areas of the business should be preserved, and which are ripe for a rethink. You have framed the business case and identified the KPIs. Armed with your presentation, you enter the boardroom. What now? 

Top tips 

First, reassure the family about what will not change. “You need the humility to understand the company’s strengths and not destroy that value,” says an Amrop Partner. “Many CEOs come in saying, ‘I know it all. I’ve been brought into ship-shape this company.’ The assumption is the company is not ship-shaped.” Stay clear of the new broom syndrome. ‘Change for the sake of change’ will get a skeptical reaction in any organization. But in the FOB a meta-fear may lurk— a change tsunami that will sweep the legacy away: “Maybe tomorrow you’ll make the whole organization like this.” 

Use positive language (underpinned by a constructive attitude). An Amrop Partner warns against finger wagging and ‘have-to’ language. It is all too easy for an executive to slip into this behavior when under the influence of pressure (or enthusiasm). Instead, strategists should only help stakeholders to understand the benefit, but feel it, remembering that this is a smart (and probably wise) audience.  

Put relationships first, data second. Whilst incompetence is unlikely to lead to a long and illustrious tenure, trust tends to be prioritized over technicity. Notwithstanding, the basic business principles still apply. “You need documented examples,” says this Amrop Partner. 

Find safety in numbers. “Some individuals argue and explain why their decision might be better.” But defeat must be gracefully conceded, no matter one’s convictions. The owner decides. If his or her rejection of a strategy turns out to be misplaced, it is time to pull out the facts, says one Amrop Partner. Concession must not become over-compliance. “I brought you this idea. On x date we went through the numbers and you declined it.” What if the owner now backtracks and accepts the new strategy? “Then I had better be as good as I think I am to make it work.”