Survival Tips For CEOs At A Family-Owned Business
The Chief Executive article, “Survival Tips For CEOs At A Family-Owned Business,” quoted Russell Reynolds Associates Consultant Shawn Cooper on possible advantages the CEO of a family-owned business might have compared to that of a public company. The article is excerpted below.
In Mario Puzo’s The Godfather, Michael Corleone, having narrowly escaped an assassination attempt, names the mafia family’s loyal No. 2, Tom Hagen, as acting don—or interim non-family CEO, if you will—and Hagen takes the assignment with impressive calm. The organization faced some fairly significant challenges, including lethal external competition, damaged morale, infighting among senior-level staff, and, of course, the strong tendency for anyone in charge to meet the business end of a Smith & Wesson. In Puzo’s corporate climate, a single wrong move could land an executive on a one-way trip to the bottom of Lake Tahoe.
While more traditional family businesses might not be as fraught with quite so much peril, they do share some of the challenges of the Corleone’s: loyalty is highly prized, but not always guaranteed in return; competition is fierce; expectations are high; and just about every family has its Fredo—or at the very least, its share of drama and dysfunction.
But for CEOs looking for new leadership opportunities, it’s only logical to include family-owned companies in the scope of search. They account for 90 percent of American businesses, according to the U.S. Bureau of the Census, and collectively contribute 57 percent of the U.S. GDP and employ 63 percent of the workforce, per Family Enterprise USA figures.
Leading one of these family-run businesses comes with some advantages, including greater longevity. “If you look at turnover in public companies it gets higher and higher every year,” says Shawn Cooper, member of the global board and CEO practice at Russell Reynolds Associates. “In a family-owned company, unless there is tissue rejection when you first join, there is a greater likelihood you can call this a longer-term career for yourself.”
To read the full article, click here.