The secret weapon of a family business

By Gerald Le Van

Once upon a time, Margaret and Jack made an unspoken agreement. Jack would be in charge of family thinking, and Margaret would be in charge of family feelings. Of course they never negotiated. They really didn't discuss it. Over time it just happened. It was a common division of labor among older family businesses.

During the early days, Margaret worked in this hypothetical business, called JacMar Corporation. Margaret felt obliged to work there; to do those jobs Jack couldn't or wouldn't do. Working there was like paying her dues for the faith she had in him. Jack wouldn't have launched the business without Margaret's encouragement. Later, like many other entrepreneurial wives of her generation, Margaret moved back home. Jack hired someone to fill her place at the office. Margaret fired the housekeeper.

Now Jack and Margaret are in their sixties. JacMar Corp. is prospering, with $18 million in sales last year, 57 employees, two sons preparing to take over.

Though she hasn't worked there for years, Margaret still has strong opinions about the business. Now and then she favors Jack with them. Although he may pretend not to listen, he often follows her advice. Jack and Margaret are still in business together though Margaret seldom comes to the office.

As they age, Margaret senses how the daily burden of running the business is beginning to get Jack down. He is less communicative, more irritable, complains more about employees, suppliers, customers, even about his sons. Increasingly, her sons seem to be sending messages to Jack through her. Increasingly, Jack seems to answer them through her. She's not entirely comfortable in this role.

Family businesses are a glorious, curious, and often maddening mix of family and business. Margaret has always been the keeper of family solidarity and values. When younger son Frank dropped out of college, Jack refused to hire him—until Margaret said firmly: "No member of this family is going to be tumed away." Not long ago, Jack told Margaret of a tempting offer to sell the business. The deal would make them independently wealthy. "Sell this business?" she cried. "After spending a lifetime building it?" The buyer was turned down.

Family businesses must make room both for business and family values. This is their unique quality. Jack's business values told him to deny son Frank employment until he finished school. Margaret's family values told her that Frank might feel rejected by the family if denied the job. Jack's business values told him to sell the company at top price. Margaret's family instincts rebelled at parting with the business that to her so symbolized the family's position in the community and the accomplishments of her husband and sons.

A family is an emotional institution. As chief keeper of family feelings, Margaret has always taught "family first." Her basic lessons in family trust and loyalty have not been lost on her sons. Despite differences with each other, and disagreements with Jack, Margaret's sons are learning why a strong family business is the most formidable competitor in the marketplace. It's not because family members are smarter or work harder than anyone else (although they often do). Successful family businesses win out over others because family values simply can't be duplicated in other business environments. These are precious assets, taught and tended by the family's chief emotional officer.

The emotional agenda gets out of whack now and then. Perhaps it wasn't wise to give dropout son Frank a job. Perhaps Jack should have sold the business for top money. Sometimes tensions between the chief executive officer and the chief emotional officer demand family rules to cover such situations. (See "Who's In, Who's Out? The Clear Case for Rules," February 1990.) Sometimes the family just has to wing it—when there aren't any rules. And this is when family loyalty and trust are most needed.

If your family business is about to change leadership, who will be the next chief emotional officer? Some say the younger generation is more androgynous—women doing more of the thinking, men doing more of the feeling. Fewer couples fall into tacit agreements as did Jack and Margaret. Your next chief emotional officer may be male, or the role may be divided among several family members. Don't overlook the importance of finding a successor chief emotional officer. Family businesses prevail because of family trust and loyalty. Teaching and tending trust and loyalty is the job description of the chief emotional officer. It's good family business.

Gerald Le Van Is an attorney, lecturer, and president of the Family Business Foundation, a consulting firm in Baton Rouge.