Flexibility is often touted as the single most valuable asset when it comes to sustaining success, and some family businesses try to foster this by encouraging family members to fill many overlapping roles simultaneously. However, any competitive edge provided by this elasticity is almost always impacted by the increased potential for conflict and confusion it causes.
Amelia Renkert-Thomas is a North Carolina based business consultant who works closely with families to overcome these issues. After training as a tax, trust and estates attorney, Renkert-Thomas joined the family business, a ceramic tile manufacturing company at the behest of her father, the fourth generation CEO.
Without any formal training in management, Renkert-Thomas learned on the job and paid close attention to strategies that worked and the causes of problems that arose. She wrote Engaged Ownership: A Guide for Owners of Family Businesses as a way for other family business members to benefit from the invaluable lessons she’d learned, including the value of clearly defined roles and the importance of shared purpose.
Recently, Tharawat Magazine had the opportunity to sit down with Amelia Renkert-Thomas to discuss her journey in the family business, tactics to successfully leverage core capital and advice on how best to begin the process of delineating roles.
What did you discover about identity and roles when you joined the family business?
When I arrived, the business had recently gone from public to private ownership. So, even though my dad was fourth generation, he was more like a founder. Initially, there was constant disagreement – I was trying to make decisions, but kept hearing, ‘No, you need to do it this way.’ I had to develop a balance between respect for my father’s experience and my own initiative as a leader. Finding this equilibrium was extremely challenging. In the end, he was my strongest advisor and advocate, and that continues today.
Additionally, we had acquired my mother’s decorative tile business, and she had brought my brother in so he and I needed to learn to work together as core leaders as well as siblings. There was a lot to navigate in terms of roles and relationships as family members and business people, but in time we were able to do this successfully.
Some family businesses tend towards less defined roles in favour of flexibility. What do you recommend?
I encourage my clients to articulate a shared purpose. It’s imperative to ask, ‘Why are we here? Why do we want to be owners and managers of this business together?’ If there is disagreement, then these cross-purposes will interfere with each other and cause problems. On the other hand, a shared purpose will ensure family members are aligned and pulling in the same direction. We can ask each other, ‘What are you going to do? What am I going to do?’ It’s important to stay in the collective space – isolation is never useful when trying to solve problems.
That said, I have seen some families navigate role definition by creating silos. The logic is, ‘I’m going to be responsible for this and you’re going to trust me, and you’re going to be responsible for that and I’m going to trust you. We’ll communicate very little and hope for the best.’ This too is problematic. If family members aren’t working together towards a shared purpose or working towards very different goals because they’re not communicating, the business will lack direction.
There are other families who are much more willing to be collaborative and interdependent and I think they get there by a conscious process of aiming at a shared purpose – my brother and I did well to navigate this. We acknowledged very early that neither of us had all the answers and we were always more effective together.
How is it possible to find a balance between individuality and a collective purpose, and what are some common challenges that people face when trying to find this balance?
I often refer to the work of Ken McCracken, a remarkable family business consultant and long-time collaborator – specifically, something he calls the Good Enough Test, where decisions need to pass a standardised set of four questions: Does it work for the business? Does it work for the family? Is it feasible in the real world? And, is it good enough for me? I think the final question is crucial but often overlooked. If it doesn’t work for you, going through with the decision anyway will plant the seeds for future conflict.
It’s a balancing act and I think the strongest family businesses have family leaders working in multiple roles that have found the sweet spot between independence and interdependence.
What are some helpful tactics when it comes to managing the transition from one role to the next?
Growing core capital is integral to the success of any family business. If the goal is not to waste, but rather to invest in all forms of core capital, then it becomes clear that the family has an enormous amount of talent and skill to offer. Succession is often viewed as kind of a baton pass: ‘I’m the CEO and I’m going to figure out which of my kids should run the business.’ In reality, however, it’s much more complicated and the CEO is just one of many integral roles. It’s vital to consider, ‘Who can be on the board? Who can be out doing other things while still bringing perspective, valuable skills and experience? Who can be leading aspects of the business, but maybe not the entire business? Who can be out there taking capital and creating entirely new ventures?’
People fill different roles at different times in their lives, and they also play different roles simultaneously. If the family can see this as an opportunity to invest in core capital, they tend to be more successful in the long run. Focusing on continuity of core capital over time – human capital and enterprise capital as well as financial capital – is crucial. Having too narrow a view comes with the danger of getting lost in the minutiae.
What kind of factors influence the expectations family members have of each other within the business?
I’ve discovered that gender makes a difference. One of my clients had a fabulous fifteen-year run in her family business – under her leadership, the business tripled in value in a very challenging industry. When she first met me, and she heard that I have brothers, she said, ‘Well, why did your father pick you to run the business?’ In my family, my brothers and I were always, maybe surprisingly, given equal merit. In her case, her father had a clear gender bias.
I think I had an easier time working in the family business than I would have had I been practising law. I was lucky to be surrounded by family – they gave me a tremendous amount of support and confidence. Perhaps not all families are like this, but many of my clients say the same thing. Their spouses and parents stepped up, and I think that that is a trend in family business generally.