Managerial leadership practices - RO in family organizations: The role of the owner in organization

Speaker A Of your question, you're talking about working with family held organizations and very often those organizations do not do well at task assignment, particularly in my experience and often in that first or second generation because they know each other very well and they're all working together. The gift you have in a family organization, at least our experiences in North America is that most family organizations are very comfortable taking a longer view. So this system makes complete sense to them in terms of posterity. How do I establish an organization that will be able to carry forward for the next generation and the next generation? The organization that Nancy and I was Interior, we all three were just working in, they're on their fifth generation fifth. And it's incredibly important to them to make sure that they are leading a good organization for the children and the grandchildren. So that's back to the values question is that one of the things that most family organizations very much value is a good culture for their employees and they also value longevity and prosperity and posterity. Actually, I, long time ago in my career decided that I would much prefer to work in family or organizations because the owner generally works from that perspective. So in this system you could really appeal to their value of that their sense of value around taking care of people. This is a very fair and trust building organization and it sometimes takes a little while, but it very much is at the heart and soul of what I think they're trying to do in terms of values. Do either one of you have any comments about that?

Speaker B They're also much more willing to allow.

Speaker A Change to take a little bit longer.

Speaker B Time usually I've worked with quite a number of small startup companies. For the rest of you we talk about first line work, first line managerial work or technical work. This is how each level adds value to the level below in terms of having seeing a larger world and being able to handle a bit more complexity and solve problems for the people who are working for them. The third level up is the managerial level. We call it manager because we can't find another word in English for it. I've tried for 20 years. The next level is typically a director or a vice president. That's level four. Level five is usually the head of a full scale business unit. Level six will be either the head of a large company or the head of a number of business units. Level seven will be a very large corporation handling a lot of level six global vice presidents. That is the 32nd version of what I would normally take half a day. But typically we find that entrepreneurial organizations are somebody who is currently working at floor and what happens is at the level where they can handle a lot of complexity, integrate a lot of things, have been doing many, many roles, but they've never had a chance to develop the skills to take a full scale business organization forward from the perspective of the next five to ten years. And that's very often where I find I'm called in to help them and I find it a very problematic time because it's just constant firefighting. We just live from emergency to emergency to emergency, and they don't have the time, as you were mentioning, to really clarify the task. People are still doing many roles. It's very hard to differentiate out the roles. And generally it's the time when typically they look at having to bring in some kind of professional management. And at the point the professional management comes in, if the entrepreneur understands this need is at the point where it works, not when they're still scrambling, trying to turn their four level organization into a true five level business organization. It's very challenging to do. I find it much simpler to work in an organization where people have been working larger organizations have been working for a long time, have a lot of ideas and beliefs that we have to talk to them about. Some propositions to change those ideas and beliefs if they can choose to or not. And then the principles that follow. Nonetheless, I've had some extraordinary success. Typically I've gone into an entrepreneurial organization, but the time they really go into pain, and this falls into the theory that Elliot discovered is when their organization has 100, 250 people, and all of a sudden it needs to grow to 200 and 5200, 300, there is a whole new set of processes that have to come in. Policies have to be set up, roles have to be differentiated, tasks have to be clearly assigned. That is a critical point when you get 150 to 200 and moving over it. I have one wonderful client at Brewery out in Colorado, and she had to open two plants. Now, how do you handle that? How do you think about it? Because her plan was her family, now she's going to go nationwide. And how do you do that? These are fascinating challenges, but here is a totally comprehensive science. And I don't mean that my book. All I tried to do was interpret Elliot's work in a simpler, more linear way, so managers at three, managers at four could have this as an introductory book and then go back to Elliot's work as sort of a research based and the senior managers absolutely. To read Social Power and the CEO, because they do have social power and they can change the world if they are values based. I think it's the role that the owner chooses to take. We have one organization that we work in that the organization is more complex than the capability of the owner. I think he realizes this because he lets this happen and he hires higher level people in terms of their capabilities, the complexity that they can handle and he tends to work although he acts as the figurehead he tends to work in an area that he's very comfortable in, which is the numbers area. But he lets his senior managers for the most part do their work. So I think one of the things that US viewer consultants who are working with these smaller companies here can help your owner define the role where he can best serve in the company to achieve the outcomes that he would like the company to achieve. I find for many of them it's a hard switch to move to a role where they're not in total command of everything. But this work has to start from the company vision mission strategy. I don't do that work. I used to teach it at the university level and my husband actually goes into corporations and helps them figure out their strategy. I go into the corporation and I ask them where are you trying to get by? When are you trying to get there? And that's the starting point for all of this work. Whether it's explicit on a piece of paper strategy, I don't care. I just want them to explain to me when it is. And the fact that I can get them to articulate their outreach gives me an idea of how that organization should be structured and why. And that's part of my work with them is to explain that to them and see if that proposition suits them. If it doesn't then I'm not there to help them. But I'll tell you there's way more work in this area than all of us can manage. So it's a very exciting and challenging time to be working in the area and it makes the organization healthier, happier places for people to work. That's why.