Prof. Jess Chua is a celebrated name in the family business field. Today, he is active across three continents as Professor of Finance and Family Business Governance at the Haskayne School of Business, Fotile Chair Professor of Family Business at the Zhejiang University School of Management, and as the Chair Professor of Family Business at the Lancaster University Management School. When we asked him, how his interest in family business academics began his answer is humorous and down to earth: “I didn’t know anything about family business,” he declares. “And I didn’t know anything about leadership. So when circumstances led me into this field, I realised that I needed to learn as much as I could about family business. As is the academic’s way I began to disagree with many of the things that the books and authors were saying. This lead me to begin my own research, and that was how I entered the field in 1995.” The circumstances that prompted this new direction were more entrepreneurial than academic in nature: “A family business in Calgary had donated money to our university to set up a family business research center. Jim Chrisman and I volunteered to do this and we found a PhD student to support us, Pramodita Sharma. So the three of us got into the field together in 1995.” Both Chrisman and Sharma are today amongst the most published academics in the field and Prof. Sharma has been the editor of the Family Business Review for the past eight years.
After many years in the family business field, Chua has become critical of the direction it is taking: “The research up to this point leaves a black box in between the outcome (the behaviour or business performance), and family involvement. Family involvement continues to be the independent variable and researchers have found a multitude of dependent variable. In the early days of family business studies, this was the type of research needed to establish legitimacy for the field – that family businesses are different. But we now have to go beyond this type of research. That is why, to me, a lot of the research that is going on right now is boring, because all they do is find yet another dependent variable, and try to show that family involvement makes a difference,” Chua states. “I certainly don’t want to claim that this research is meaningless, since they contribute to the accumulating evidence that family involvement makes a difference. But the important thing is to understand the black box – moving from what are affected to how they are affected. How does family involvement truly affect the outcome of better performance and how can we exploit that understanding to help family firms be more effective and efficient at achieving their goals? The accumulated evidence definitely show that family involvement induces certain behaviours, and influences certain decisions and actions. But what is in the black box between family involvement and performance is mostly conjecture at this point. I think this is the biggest hole in family business research. If we are going to help family firms, understanding and applying that middle part is crucial,” declares Chua decidedly.
When we ask Prof. Chua what were the three key findings over the last year that could serve as take-aways for family business owners, his answer is quick and enthusiastic: “There was a paper in FBR, talking about rebuilding trust. Every generation must rebuild trust,” he explains. “I think it has to start with the 3rd generation, because in the 2nd generation, siblings grow up trusting each other through bonding and growing up in the same household. The minute one enters into the cousin generation, it’s all different. Also, if you take a modern family where family members live all over the world, there must be deliberate rebuilding of trust in every generation.”
“The second thing that will help is facilitating open communication among family members. This is crucial because there is no one solution to any family issue; in fact, you cannot prescribe one solution even within the same culture. The most important thing is to help the family communicate. Family members often don’t know how to communicate. They talk at the same time, and they don’t know how to listen to each other. Often, this behaviour carries over to formal family meetings,” Chua stresses. “This is why I place an emphasis on family business history. I believe we have lost narratives. We have lost invaluable stories. In the early days of family business studies, there were stories upon stories of successes and failures. Since we know that communicative families have greater satisfaction with succession planning, I believe these stories will help facilitate healthy communication within the family.”
With his final point Chua touches upon an issue that still lies at the heart of the family business phenomenon: “Finally, for intra-family succession to succeed, family members must be accommodating. If I am asked to say what are the two words that are most important for the family, I believe they are “accommodation” and “sincerity”. It is human nature to reject people who are not sincere. You cannot hide insincerity. If you have a situation in which everyone is trying to maximise his/her own interest instead of accommodating each other’s interests, the family unit, never mind the business, will not work.”