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Articles by Rob Lachenauer
10 warning signs your family governance is stuck in defense mode
By Matt Allen, Rob Lachenauer Don’t focus your governance on avoiding problems at the expense of promoting purpose-driven outcomes. A Decrease font size. A Reset font size. A Increase font size. Don’t focus your governance on avoiding problems at the expense of promoting purpose-driven outcomes. This post is only available to members. Matt Allen is the John L.
10 warning signs your family enterprise governance is stuck in defense mode
“Offense sells tickets, but defense wins championships,” iconic college football coach Bear Bryant famously said, putting his own spin on the old sports adage, “The best offense is a good defense.” The maxim applies well beyond athletics, and there’s a good reason for that: humans tend to be risk-averse, as psychologists Daniel Kahneman and Amos Tversky documented in a series of well-known experiments around hypothetical bets.
¿Su empresa familiar está en el camino del crecimiento?
Hemos visto que las familias utilizan distintos términos para la "tasa de reinversión", como DCF (flujo de caja distribuible). También hemos visto ligeras variaciones en la forma de calcularla. Pero, en esencia, miden lo mismo: la decisión crítica que toman los propietarios sobre cuánto reinvertir y cuánto distribuir. Ninguna otra cifra expresa mejor la intención de los propietarios.
Why It's So Hard for Leaders to Let Go
Expert Opinion By , Co-founder and Partner, BanyanGlobal Family Business Advisors Why is it so hard for some of the world's most powerful leaders to pass on the torch? Our work advising many of the world's top family businesses to help them successfully navigate from one generation of leaders to the next may shed some light on President Biden's decision whether to step back and let his potential successors vie for the Democratic party's nomination.
Is Your Family Business on the Path to Growth?
For many years, Bethany didn’t ask a lot of questions about her family business, a successful third-generation technology company.* Bethany had pursued a career as an educator outside of the family business, but she was proud of how the business had grown rapidly and profitably under her uncle’s leadership. She trusted him to make the right decisions for both the business and the family.
Is Your Family Office Built for the Future?
Two years after their father died, Paul and Hank knew the time had come when they should break-up their family office. At their father’s insistence, the family’s substantial financial assets had been invested together. As their father’s business was the source of the family wealth, the brothers felt an obligation to build a single-family office together. But investing decisions soon became a source of conflict.
Do most family businesses really fail by the third generation?
If you’re a fan of the HBO show Succession, or if you’re aware of the conflicts playing out publicly and perennially among some of the most visible family businesses in the world—think the Murdochs or Sumner Redstone’s family—you might assume that family businesses are more fragile than other forms of enterprise.
Do Most Family Businesses Really Fail by the Third Generation?
If you’re a fan of the HBO show Succession, or if you’re aware of the conflicts playing out publicly and perennially among some of the most visible family businesses in the world — think the Murdochs or Sumner Redstone’s family— you might assume that family businesses are more fragile than other forms of enterprise.
Family businesses cite large gaps in their family employment policy
Taking Care of Your Own: Family Employment Policies Photo from Creative Commons Published on May 27, 2021May 27, 2021 • 13 Likes • 0 Comments Josh BaronFollow Co-founder BanyanGlobal, Adjunct Professor at Columbia Business School, HBR author and thought leader By Josh Baron and Rob Lachenauer For many family business owners, having a child (or another relative) thriving in the family business is one of the biggest payoffs of all.
There’s a reason (many) why family businesses fail
Home > Article VOL. 45 | NO. 14 | Friday, April 2, 2021 By Terri Schlichenmeyer Updated 6:51AM Print | Front Page | Email this story You have entered an invalid email address To: * Required From: * Required Message: You have entered an invalid email address From (email):* Required Message:* Required They say not to take work home with you. Leave it at the office, they say. Lock the door and forget about work, seize the down-time, relax. Leave work at work, they say, but how can you?
WJR Business Beat with Jeff Sloan: Entrepreneurial Success by Age Demographics (Episode 184)
News Talk 760 WJR. Here is special guest host, Guy Gordon. I don’t know if you harbored this dream, but I know a lot of people do, that you could become the next Bill Gates or the Steve Jobs. You’d come up with that idea, or the Zuckerberg, you come up with that idea that is the next big thing. And it turns you into, if not a billionaire, it gives you comfort in the future financial life that you want.
Starting a Family Business? Avoid These 5 Mistakes in Your Continuity Plan
About Latest Posts Josh Baron and Rob Lachenauer Josh Baron and Rob Lachenauer are co-founders and partners at BanyanGlobal Family Business Advisors. Both are frequent contributors to HBR.org and together have authored "The Harvard Business Review Family Business Handbook." The following is excerpted from “The Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise” by Josh Baron and Rob Lachenauer (Harvard Business Review Press, 2021).
How to Form an LLC in Michigan
About Latest Posts James Gilmer James Gilmer is a Compliance Specialist at Harbor Compliance, a leading provider of compliance solutions for companies of all types and sizes. Founded by a team of government licensing specialists and technology trailblazers, Harbor Compliance has helped more than 25,000 organizations apply for, secure, and maintain licensing across all industries.
Finding the Goldilocks zone of conflict in family business
Two brothers sharing ownership in a successful fourth-generation concrete business had a bitter falling-out triggered by an unlikely issue: a sailboat. The older sibling accused his younger brother of dipping into the company till to support his racing habit. The younger brother countered that since he often entertained customers on the boat, he was following the same pattern the older brother had for years by having the company pay for expenses that had both a personal and a professional use.
Rob Lachenauer
Rob Lachenauer, a co-founder, partner and chief executive of BanyanGlobal, has been an adviser, business leader, and writer throughout his career. As an adviser, he was a partner at The Boston Consulting Group, where he helped family-controlled and other businesses set and implement growth strategies. While at BCG, he co-authored Hardball: Are You Playing to Play or Playing to Win?with George Stalk.
Build a Family Business That Lasts
Idea in Brief The Paradox Family businesses are famous for power plays, backstabbing, and dramatic implosions. Yet some are among the most enduring companies in existence. Why It Matters Family-controlled firms represent some 85% of the world’s businesses. In the United States they employ 62% of the workforce.
What You Need to Know About Taxes for Your E-Commerce Side Hustle
About Latest Posts Chris Rivera Chris founded the E-commerce Accountants in 2019 which specializes in tax, accounting and business structuring for e-commerce companies including digital marketers, drop shippers, Amazon automation, Amazon FBA and internet coaches/gurus. Chris works with some of the most high-profile and influential individuals and businesses in the e-commerce space.
Why Companies Thrive Or Die: Ownership and the Path to Perpetuation
Why do some companies continue to thrive for decades and others die after an initial run of success? Much like an airplane accident, company failure is generally the consequence of cascading effects that combine together to overwhelm a previously effective strategy. But the errors that led to those corporate death spirals often can be traced back to a common factor that receives insufficient attention: their ownership model.
Dealing with the Unique Work-Life Challenges of Family Businesses
Howard is the brilliant and overpowering founder of a billion-dollar vehicle business who pressed his elder son into the business. The son is himself a brilliant man who wished to be a physicist but, overwhelmed by a sense of duty to his father, studied business in college and then entered the family firm. His father demanded absolute commitment to the business, forcing his son to be “all in” and to follow the career path set down for him in early adolescence.
Why I Hired an Executive with a Mental Illness
A few years ago, I was interviewing a candidate for a substantial position in our firm. Although the candidate and I had exchanged a number of emails, this was our first meeting. We got along very well. Then something unexpected happened: She looked me in the eye and said that she struggled with a “mental illness.” She added that she’d been on meds for more than a decade, and that there had been no episode during that time.
What to Do When You’re Caught in a Lie (Even an Unintentional One)
People lie, on average, one to two times per day. While the percentage of lies told by a person, the conditions under which we lie, and the degree to which the truth gets stretched all vary, research agrees — we all do it sometimes. Given the prevalence of lying, it seems inevitable that, at some point, we are going to get caught. Many people, however, don’t see it that way. Most of us believe that our lies actually work — mainly because it takes a rare person to confront us.
5 Signs That Your Family Business Might Have an Ethics Problem
When he was attending his grandfather’s funeral, Robert Pasin, the CEO of Radio Flyer, was overwhelmed by the outpouring of affection and respect for the family patriarch, who had originally founded the third generation family business, which manufactures toys. “All these people who worked in the factory, all these suppliers, they told me stories about my grandfather. His word was his bond. One supplier told me that they’d never even had a signed contract, just a handshake agreement.
What Happens When You Lose Your Mentor
Juj Winn/Getty Images He had been my mentor for 30 years. He died yesterday. He was CEO of the firm where I began my consulting career, and for the first 15 years our relationship was informal, distant. His leadership was less about directives and more about exploring ageless themes — constantly reminding us, “Consider this.” He’d seek leadership clarity on the other side of the complexity: How, despite all the noise around you, do you help people bring the best out in themselves?
5 Signs That Your Family Business Might Have an Ethics Problem
In theory, family businesses are well-positioned to push back against the temptations that drive companies to step over ethical boundaries. However, managers in every kind of company can be tempted by marginal thinking — the idea that “just this once” I’ll do something a little shady. There are five warning signs that your family business is in jeopardy of heading down the wrong path: 1) You lose the full family narrative.
Giving Negative or Awkward Feedback to a Close Colleague
Tony is a purchaser at a chocolate factory. For two years Jay has been both his manager and his friend. Lately, many other employees have asked Jay to tell Tony that he has bad breath. The situation has become intolerable for many, even off-putting to vendors. What you should say: “I’m here to be for you what someone once was for me.” When you are giving sensitive feedback, no matter how much you try to position yourself as an advocate, people tend to become defensive.
Podcast: Chadramouli Venkatesan on How to Win at Work
Chandramouli Venkatesan (Mouli) has a strong corporate track record of over 25 years. He is an alumnus of XLRI, Jamshedpur and spent his initial years in Sales and Marketing in Asian Paints, GE Capital and Onida. He worked with Cadbury’s from 2005 till 2016. Over that time Cadbury metamorphosed to Kraft Foods and Mondelez and his last role there was Managing Director for India.
Why I Hired an Executive with a Mental Illness
A few years ago, I was interviewing a candidate for a substantial position in our firm. Although the candidate and I had exchanged a number of emails, this was our first meeting. We got along very well. Then something unexpected happened: She looked me in the eye and said that she struggled with “mental illness.” She added that she’d been on meds for more than a decade, and that there had been no episode during that time.
Working with Your In-Laws Isn't Always a Terrible Idea
When Walmart’s Rob Walton, board chairman of the family-controlled company, appointed Greg Penner to vice chairman last week, he was going to bat for his son-in-law, underscoring the important role that in-laws can play in the game of family business. It isn’t always that way. In-laws in many business families often find themselves at a disadvantage. As nearly every married (or formerly married) person recognizes, tensions with in-laws are common, whether you work together or not.
How to Cultivate Gratitude, Compassion, and Pride on Your Team
As a leader, what traits should you cultivate in your employees? Grit – the ability to persevere in the face of challenges? Sure. A willingness to accept some sacrifices and work hard toward a successful future are essential for the members of any team. But I believe there’s another component that matters just as much: grace. I don’t mean the ability to move elegantly or anything religious.
Tactics for Asking Good Follow-Up Questions
Whether you are looking to hire someone, decide whether to trust someone, or enter a business partnership, the better you are at judging people, the better off you will be. Unfortunately, most people are just plain bad at reading others. Several decades of research among psychologists has indicated all sorts of blind spots, biases, and judgment errors we make in assessing people. Much of that research has focused on the mental processes we use to interpret what we see or hear.
Yes, You Can Start a Business and Have a Baby at the Same Time
The stereotypical image of startup life is a handful of scruffy twenty-somethings working 24/7 in a garage. No one has kids, needless to say, because no one has a life outside of work. That image of workaholic, childless founders is often reinforced by founders who recount stories of their firms’ exhausting, around-the-clock early days.
Family Business Owners Must Set the Agenda (Without Micromanaging)
With those three little words, Charles changed the course of his family’s shipping business**, highlighting the role that owners can play in a family business. His father had founded the business in the 1960s and, after building it to $500 million in revenue, had passed ownership down to Charles and his four siblings, then stepped away from the executive suite and ultimately from the board. This may seem like the perfect succession; in fact, it was a perfect set up.
Breathing Is the Key to Persuasive Public Speaking
Have you ever wondered why two people can say exactly the same thing in a meeting, but only one of them gets credit for it? Many times it’s the way we sound that makes the difference between whether or not we are actually heard. We all know when someone sounds nervous or confident.
Why Fights Erupt in Family Businesses
Two brothers sharing ownership in a fourth-generation concrete business had a bitter falling out over an unlikely issue: a sailboat. The older sibling accused the younger of dipping into the till to support his racing habit. The younger brother struck back by issuing an ultimatum: buy out my share of the company, or sell me yours. An ugly fight ensued, affecting the business, the family, the employees, and the customers.
Signs You’re Losing Control of Your Family Business
When the non-family chairman/CEO unexpectedly told family business owners that they had to live without dividends or sell the business, Tommy leaned over and whispered in his cousin’s ear: “Do you get what’s going on? The numbers have always been terrific.” Despite their shock, Tommy and other family owners shared responsibility for this painful situation. For years, they’d been detached and unengaged owners.
The 5 Models of Family Business Ownership
One of the first questions we ask clients is, “How do you own your family business?” Often the response is legalistic: “We are a limited liability company” or “Our shares are held in trust.” This information is essential, of course, but it leaves unanswered the more fundamental questions: “In your family business system, who gets to be an owner?
Warren Buffett’s Risky Final Bet
Throughout his great career, Warren Buffett has made huge bets – for example, investing billions in Goldman Sachs during the financial meltdown of 2008. But as shareholders gather in Omaha for the Berkshire Hathaway Annual Shareholders meeting on April 30, they ought to be thinking about Buffett’s biggest bet. The altruistic capitalist has pledged to donate 99% of his fortune, which is held primarily in Berkshire stock, to philanthropic causes, largely through the Bill & Melinda Gates Foundation.
Dealing with the Unique Work-Life Challenges of Family Businesses
Howard is the brilliant and overpowering founder of a billion dollar vehicle business who pressed his elder son into the business. The son is himself a brilliant man who wished to be a physicist but, overwhelmed by a sense of duty to his father, studied business in college and then entered the family firm. His father demanded absolute commitment to the business, forcing his son to be “all in” and to follow the career path set down for him in early adolescence.
Surviving in a Family Business When You’re Not Part of the Family
We see all kinds of office politics – the good, the bad, and the ugly – in family-owned businesses. Families can be intensely political organizations, and non-family executives must know how to play politics both in the business itself and in the dangerous borderland between the business and the family.
Can an Outside CEO Run a Family-Owned Business?
Gus, the dad of one of us (Rob), found his dream job. After being head of sales in a large sporting goods company for over a decade, he was ready to move up to a CEO role. A good friend ran a sizeable sports cap company, a family business, and he was looking to step aside. Gus took the job and relocated his family. Eighteen months later he was out and looking for new employment. What happened? A son may not always be unbiased about a parent, but Gus was a smart businessman.
If You’re Feeling Unappreciated, Give Someone Else Credit
Harry is one of our most successful family business clients. A high school graduate, his first job was pouring concrete. Once he joined the family business, he showed a real gift for leadership. Strategically brilliant, disarmingly funny, a driven worker, and still grounded in his deep values, Harry grew the firm at more than 15% per year. He embodies much of what we all admire in leaders. Yet something was amiss in the culture of the business Harry had created.
Keep Your Kids Out of the Entitlement Trap
Want to know what keeps the owners of the most successful family businesses up at night? The dread that their kids will grow up to be entitled. This is the concern of most parents, but among the very wealthy, the anxiety can be sometimes paralyzing: Will their children and grandchildren end up lazy, good-for-nothings, who are not contributing to society? In other words, “trust fund babies,” the kind whose scandalous antics fill the pages of the New York Post.
Hardball: Five Killer Strategies for Trouncing the Competition
The Idea in Brief Does your company have the strategic backbone to dominate its markets? If not, hardball players may overtake you. Hardball players play to win. They focus relentlessly on their competitive advantage, as Wal-Mart does by constantly honing its innovative distribution and inventory-management systems. Like Toyota with its unmatched production system, hardball companies strive for “extreme” competitive advantage.
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