Originally published in Tharawat Magazine (February 19, 2016)
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.