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Chief Emotional Officers Set the Tone in Family Business

By August 15, 2012November 1st, 2019Family Business Law, News & Publications, Uncategorized

Beatrice E. Wolper
Emens Wolper Jacobs & Jasin Law Firm
August 2012

It may not be a surprise that the highest/oldest woman in the family owned business is the CEO—“cEo” or “Chief Emotional Officer.” She nurtures the family beliefs, calms sibling rivalry and sets the tone for the family interaction.

Although currently young mothers may work in/run/own the family business, in most traditional division of household duties, the mom is still the “primary-care-giver” –the person primarily responsible for raising the children. Many men would state that sentence is not true, and they would declare very loudly that they help around the house all the time. And they do help – they help mom with the household duties.

But, in traditional families, most of the time, mom is still the person who stays home if the child is sick, takes the child to the doctor, and is responsible for calling a plumber, being at the house to let the plumber in and makes sure the household repairs are done. Her time with the children is spent with empathy, listening to their goals and dreams, instilling family values, and sharing her expectations for them. So when these children come into the family business, they look to and listen to mom when it comes to facilitating cooperation, encouraging family relationships and providing a bridge between family and business.

Successful family businesses do not attempt to remove the emotional power of family relationships from the family business. Instead, recognizing the emotional power of such relationships becomes the foundation for a successful transition from one generation to the next. A family business’ strong family relationship is one of the reasons family businesses are so successful. The cEo can provide the necessary emotional support, can help smooth things over and keep communication open. Communication that is open, direct and respectful is a key. The cEo can help make peace between and among the generations in the family business and can nurture the necessary commitment to the family and to the business.

Unfortunately, there can also be a downside to the invisible cEo. In family businesses, triangles often happen. Dad tells mom that daughter is doing poorly (but doesn’t tell daughter), daughter tells mom that dad is unreasonable; son tells mom that dad won’t listen to his ideas, dad tells mom son has some hair-brain ideas that will destroy the company. No one tells the other person directly what the issues are! A strong cEo must say, over and over, “go tell dad/daughter/son what you feel, not me.”

In troubled family businesses, the cEo attempts to smooth out the issues without fixing the communication problem. These situations rarely work out well. A strong invisible cEo will encourage communication among all family members.

There is a well known story about the succession of The New York Times in 1896. When Adolph Ochs passed on the succession of the Times to Arthur Sulzberger, Arthur’s wife, Iphigene Ochs Sulzberger (daughter of Adolph) had a “quiet but decided influence” on the newspaper for her entire life according to her obituary. Her obituary also stated that “she strove to preserve the family ties among her four children, 13 grandchildren and 24 great-grandchildren. …She was the ‘glue that held us all together.'” It appears that Iphigene was a characteristic cEo.

Successful cEos often will help with communication among family members and encourage family get-togethers. Recently, the “mom” was asked to return from her home in Florida to attend a family council meeting of a Columbus business. The children running the business were in their 50s, and there were grandchildren also in the business. Mom talked about the sacrifices she and dad had made starting the business. How difficult it was to get any financing. How $500 saved the business. How dad’s word could be relied upon by everyone. How much the family business meant to them. How important it was to preserve the family name and reputation. When her presentation was over, everyone crowded around…but most significantly, the grandchildren had heard, perhaps for the first time, the history of the company and the importance of the family values, even though Mom had not “worked” at the company.

In many family businesses the wife of the founder will state that she “has nothing to do with the business.” Nothing could be farther from the truth. Because she is the “invisible” cEo, she is the behind-the-scenes promoter of equality, communication and cooperation. Although she may not have a formal role in the company, she can foster self confidence and competency. It is important to include the cEo in family council meetings (programs for family members to discuss the family and the continuity of the business). In reality, mom may end up as the majority shareholder of the business and may need to make those crucial and required decisions about the future of the business.

It should be noted that other people often take on the role of cEo…not just mom (although she is most convenient). Many times, an outside, non-family member can assume that role. An “outside” person can be someone family members go to for advice and counsel. She or he can listen objectively. Since family relationships can be “emotional,” sometimes a third party can facilitate better communication.

Family business is like a complicated maze. With planning, good counsel and luck, the family members find their way out to another successful generation of owners, leaders and managers. Without the support and “glue” of a cEo, many families get lost in the maze and just stop, or must reverse their direction completely. A good cEo is invaluable.