Image source; Negative Space via Pexels
Interview with Professor John Davis, Chair of Families in Business Program at Harvard Business School and Chairman of the Cambridge Institute for Family Enterprise
Professor John Davis at Harvard Business School, is one of the world’s greatest authorities on family businesses. Davis embarked on a successful career as an educator and advisor to business families around the world by combining his passion for business organisation and family psychology. One of the first in the field, Davis began studying family-owned businesses in the 1970s. A few decades and hundreds of articles later, he is the driving force behind many prevalent family business theories and management principles. Professor John Davis continues to teach and research in this field and also consults with families around the world. Tharawat Magazine sat down with Professor Davis to discuss one of the family enterprise’s biggest challenges: talent management.
Why is the discussion of talent management in the family business more important than ever?
Winning in business today is mostly about the talent in your company. To have a high-performing company, you need exceptional talent. You need to be able to recruit, develop, motivate and keep great people. Factors leading to good company performance, such as being able to spot and develop the right opportunities for your company, manage key stakeholder relationships, keep up with technological change all depend on having the right talent, and especially depends on the quality of your management team. If you are not working on building a highly capable management team, including great non-family managers, you might not be able to grow your company or even keep it going.
Families generally hope that one or more family members will be interested in the family business and be able to eventually lead it. Sometimes you get one or more talented family members to join your company but you can’t count on it. At the very least, a family needs to have good options if family members do not have the interest or ability to manage the company.
Do family businesses have any advantages attracting and retaining good non-family employees?
Family businesses are often attractive employers because they tend to create more caring workplaces and offer more job security because of their long-term thinking. If they have an exciting mission on top of that, family companies can be hard to beat. A real competitive advantage of many family companies is the closeness and loyalty of their employees, a sense that the family and non-family employees are a special group, a “tribe” with a special mission. This culture needs to be communicated to people the company wants to recruit. As family companies become more “professional” they should make sure they don’t lose this tribal identity.
[ms-protect-content id=”4069,4129″]
What talent management challenges do family businesses face?
The first big challenge is just devoting the time and attention that talent management needs. To get the talent they need and deserve, the leaders of family businesses need to devote adequate attention to all aspects of talent management: recruitment, development, compensation, and retention. Family companies need to build their bench of inside family and non-family talent, and be able, when necessary, to integrate non-family outsiders into their company.
The next big challenge is really share decision-making with your senior non-family managers. We often see the family insist on being the head craftsman and controlling all important business decisions. Families can continue to be at the helm, but so can others. In many cases, family owners are much more needed as good owners who can help make big investment decisions and determine overall direction than they are as managers of the company.
Probably the biggest challenge to talent management today is that the talent a company needs today will not be exactly the talent it needs in a few years’ time. Industries are changing more and more rapidly. New industries are appearing and others are dying. So businesses don’t survive for as long as they used to and those businesses that do survive usually must change a lot. Clearly, top management must make it part of their job to think about how to develop and keep the right talent in the company as it is changing.
How can and do family businesses recognise and reward good non-family talent?
The best performing family businesses are those that give non-family executives a feeling of partnership with family executives, the support to develop their talents, and the chance to be a senior leader of the company—usually along with family members.
Any final words of advice to our readers?
The ultimate goal in hiring people is to find people who know and like your values who can learn how to do things in a very high-quality way. The higher the position you hire for, the more you need to hire people that know things you don’t.
Tharawat Magazine, Issue 29, 2016
[/ms-protect-content]
