Leadership and

Interpersonal
Communication in
Family Business
By

Otis W. Baskin, Ph.D.

Professor, Pepperdine University
Associate, The Family Business Consulting
Group
 The Challenge of
Leadership Development
and Succession
 From Entrepreneur to Group
Ownership
 Less than 35% Survive to 2nd Generation

 From Sibling Group to Family

Branches
 Less than 15% Survive to 3rd Generation
Leadership Challenges in
Succession Planning
1st 2nd 3rd
Generation Generation Generation
Owner/Manag Sibling Owned Cousin Owned
ed
Entrepreneursh Small group of Family
ip owners branches
Unity of Leadership Multiple
decision-making conflict owners
Return on
investment?
The #1 Challenge
for Leadership in
Family Business
Preserving the best of the
past while creating a
company that is able not only
to accept, but to initiate
CHANGE.
 CHANGE IS
INEVITABLE
Only 40 % of the Fortune 500
companies of a decade ago
still exist today.
 CHANGE IS
MASSIVE
Leaders in the automotive
industry in 1985 boasted a
defect rate 1.5 times better
than their competition.

Today you must beat the

competition by more than 700
 CHANGE ALWAYS
SUPRISES US
 1943“I think there’s a world market for
maybe five computers.” Chairman, IBM

 1949 “Computers in the future will weigh

no more than 1.5 tons.” Popular Mechanics

 1984 “640K ought to be enough for anybody”

Bill Gates, Microsoft
The # 1 Reason Change
Initiatives Fail:

LEADERSHIP
The Incumbent Leader

 Should take responsibility for creating

and maintaining a climate for change.
 Challenge, encourage, and empower
the next generation while still in control.
 Use vast experience to guide change
not resist it.
 Believe the business can survive
without them.
 Recognize that the next leaders job is to
build consensus around change and
 Leading Change in a
Family Business
 Is Easier Because:
 Smaller & more
 Is Harder
entrepreneurial Because:
 Able to move faster  Leaders have
 Few or no outside longer tenure
shareholders  Fear of offending
 Owners have more predecessor
influence  Tradition
 Difficult to have
another vision
when leader
grows up in
current culture
 Which Leadership Style
is Best?
Project Style Family/Tea
Strategic
Directing m
Inexperienced

Resistance Lacks Confidence

Expected Limited

Job

Not Cuts
TimeInvolved
Critical Competence
Respects Leader
Coaching
Development Skilled
but needs
Goal Development
Culture
 Change
Innovative Already
Counseling
Technical Motivated
Low Experienced
resistance
Cont. Technical
 Skills
Experienced
Delegating
Improvement Entrepreneurial
Non Cross-
functional
 ASSESSING THE READINESS
OF THOSE YOU WOULD LEAD
Active Passive Passive
Active
StakeholderResistance Resistance Support
s Support

1. JRW X O
2. CHR X O
3. AVN X
4. PCG O
X O

Source: Worley, Hitchin & Ross

 Strategies for Different
Stakeholders
High

Terrorist Champion
(isolate) (expose & promote)

Influence

Critical Mass
Casualty
(treat wounds)
Supporter
(encourage & recognize)

Low
Supportiveness High
Source: Bywater plc
Four Core Qualities of
Emotional
Fortitude

Authenticity
Self-awareness
Self-mastery
Humility

Bossidy and Charan, Execution: The Discipline of Getting Things Done, 2002
 FIRO-B
Assessing Your Leadership
Tendencies and Preferences
 FIRO-B:
Designed to Help You
• Manage your behavior as a leader

• Recognize sources of conflict

• Recognize sources of stagnation

• Acknowledge the contributions of all

members of your organization
What FIRO-B is NOT

• A comprehensive personality test

• An assessment of “good” or “bad”

behaviors

• A measure of your ability

FIRO-B Measures Interpersonal
Needs
• INCLUSION: The extent of
contact and prominence that a
person seeks.

• CONTROL: The extent of power

or dominance that a person seeks.

• AFFECTION: The extent of

closeness that a person seeks
 Measures How Much Needs are
Expressed and Wanted

• EXPRESSED: The extent to which

a person will initiate the behavior.

• WANTED: The extent to which a

person prefers to be the recipient
of the behavior.
 Your Leadership Needs
and Expectations
Inclusion Control Affection
I make an effort I try to exert I make an effort
to include control and to get close to
others & join influence. people &
groups. express
I want others to I feel best Ifeelings.
want others to
include me & working in well- act warmly
invite me to defined toward me &
belong. situations with share their
clear feelings.
instructions.
If Your Strongest Needs
are for Inclusion
You will strive to be a leader who:

 Focuses on fairness and involving your team

 Integrates divergent interests
 Gains legitimacy through endorsement and
consent
 Enjoys serving and benefiting the common
welfare
 Desires to have a noticeable impact
 Likes to be viewed as a popular leader
 Is gratified by public recognition
If Your Strongest Needs
are for Control
You will strive to be a leader who:

 Focuses on the task to be accomplished

 Meets deadlines
 Provides structure and gives
instructions
 Sticks firmly to final decisions
 Develops challenging goals
 Gains legitimacy through task skill and
proficiency
If Your Strongest Needs
are for Affection
You will strive to be a leader who:

 Focuses on developing human resources

 Strives to increase and maintain
employee satisfaction
 Encourages and supports others
 Minimizes conflict
 Gains legitimacy through personal
commitment and loyalty
 Invites feedback - respects honest
communication
 Teamwork
“Groups of people banded
together to accomplish a shared
goal”
 Complementary  Strained Teams:
Teams:  Some high
 Provide a means of Expressed
both getting things behaviors rejected
done and meeting by low Wanted
social needs needs

 Some high Wanted

 Some high Wanted
needs matched with needs go unmet by
some Expressed low Expressed
behaviors behaviors
 Initiator
“The idea person: proposes
alternatives, encourages others to
share in the discussion”
Inclusion (I) Control (C) Affection (A)

High High
(7-9) (7-9)
eI eA
 Energizer
“Prods the team to act, insists on
covering the agenda”

Inclusion (I) Control (C) Affection (A)

High High
(7-9) (7-9)
eI eC
 Opinion-Giver
“Offers a belief/opinion on all issues,
benefit of past experiences,
independent from group and leader”

Inclusion (I) Control (C) Affection (A)

Low Low
(0-2) (0-2)
wI wC
 Harmonizer
“Strives to reconcile opposing
positions, agrees and complies with
group decisions”
Inclusion (I) Control (C) Affection (A)

High
(7-9)
eA

High
(7-9)
wC
 Consensus-Tester
“Wants to build a close-knit team,
checks for agreement, brings
closure, confronts unacknowledged
feelings”
Inclusion (I) Control (C) Affection (A)

High High
(7-9) (7-9)
eC eA
 Task-Master
“Tries to keep the team focused on
purpose and outcomes; business
before pleasure orientation”
Inclusion (I) Control (C) Affection (A)

High
(7-9)
eC

Low
(0-2)
wA
 Team/Leadership
Effectiveness
Inclusion (I) Control (C) Affection
Do I give others Do I promote my
(A)
Can I intrude less
enough space? (H) own ideas at the on others? (H)
expense of others?
Did everyone get (H) Can I support and
an equal chance to encourage others
participate? (L) Can I allow team more? (L)
members to set
Do I expect others priorities? (L)
Can I be more Am I too dependent
to seek my input – flexible and accept on feedback on my
do I ask for theirs? ambiguity? (H) work? (H)
(H)
Why am I resisting Does my emotional
Do I meet with my – independence or distance prevent me
team often enough real problem? (L) from being seen as
for their needs? (L) supportive? (L)