Robert Sher is fascinated with the world of business and the many challenges CEOs face in trying to build successful companies.
“It’s a field of study where you can never figure it all out,” says Sher, founding principal at CEO to CEO Inc. “As a leader in business, you’re an innovator to some degree. But as your business gets to midsize, the CEO’s role is to help. You have to coach your people, figure out who needs to be on your team and make hard decisions. It’s not you doing everything. It’s you helping your team to do everything.”
Sher will provide the keynote address at this month’s 2015 Family Business Conference and Family Business Achievement Awards at the McLaren Conference Center at the University of San Francisco.
He works with many different business types, but family businesses are particularly close to his heart having grown up in one.
“My father was entrepreneurial and always had businesses going,” Sher says. “When you’re a family business, not only do you want to provide money and profits, but you want it to provide some non-monetary benefits for the family including a place to work and the benefit of working as a family. When you place that additional demand on a business, it requires better and more disciplined leadership.”
Smart Business spoke with Sher about the challenges of leading a family business and the motivation behind his latest book, “Mighty Midsized Companies: How Leaders Overcome Seven Silent Growth Killers.”
SB: What are some important components to a successful family business?
RS: A family business has to have a clear and accepted business purpose with unwavering discipline to stick to it.
There is sort of a natural dilemma between loyalty to family and loyalty to the business’s mission that persists in most family businesses. It’s always there, but you have to acknowledge it and then make some clear decisions.
It may be that a family business is first and foremost a place where any family member can work. That is either an accepted business purpose or it’s not. You have to decide.
Is this business about dominating the marketplace and producing money for the family? If that’s the primary focus, that’s different than saying, ‘No, we want this to provide this broader mix of benefits.’ Leaders of family businesses have to be clear about that and say, ‘This is the way we roll and here’s how we manage that.’
SB: Are there family businesses that try to do both?
RS: You can do both, but there are sacrifices on either side. If you’re going to employ everybody in the family, regardless of performance, the business might not perform as well. But if the business can handle that and the competition doesn’t run over it, it may be OK.
That leads into another really important point.
You have to honor the justice of the marketplace, which doesn’t care about family business. It’s just a marketplace. You have to run the business well enough to win, or win enough to make a profit.
Secondly, there’s a marketplace for humans. These are your employees, and in this case, also your family. You have to honor that as well. If you have the genius child that can lead the company, you have to pay a market wage to him and give him marketplace opportunities if you’re to retain him in the business.
Likewise, if a family member gets fired three times and does a terrible job, the marketplace is saying something about what that person is worth. Family businesses that try to ignore that reality of this person being fired three times, just like any businesses that ignore that, do so at their own peril.
SB: What about people who are part of the business, but not part of the family?
RS: Try to create a family-like culture inside the business. While people know they are not part of the family, there are those connections that make them feel like part of the family when they are working in the business.
In our own families, it feels bad when one sibling gets treated special and another doesn’t. That’s something that has always ruptured families. It’s no different in business.
If you have three people working on a team and the one who always wins and gets the awards is a family member who doesn’t deserve it, you destroy a culture. You won’t keep the good ones if they don’t get treated fairly.
SB: How did ‘Mighty Midsized Companies’ come together?
RS: It’s painful to walk into situations all the time where companies are in real pain. If CEOs or business leaders can read a book and realize some of these pitfalls and reduce that pain, that’s crucial and really the driver of the book.
After six years of consulting, I said, ‘Look, we keep getting called in on similar situations. But there is nothing written for midsized companies.’ So I grabbed one topic, got my contents together and wrote a newsletter on each of 12 problems over the course of a year.
I thought that would be a good start for the book. I looked into it more deeply and got some of my own coaching and decided to up the research level around the book.
So I took those as sort of the hypothesis. We started interviewing over 100 different business executives to look for best practices and get increased validation for those things that stop the growth of midsized businesses.
SB: What drives you to want to help people?
RS: In consulting you get called in at the hardest of times when it takes special skills, creativity and experience to solve a problem. You help people figure out where they need to go to solve the problem. Then, as the consultant, you say, ‘OK, it sounds like you’ve got a map and you know where you’re going. I’m backing out. Call me if you need help.’
Then they grind it out and get there, or they bring us back if we’re needed. So we get to jump from really hard problem to really hard problem and leverage our experience in a way that you can’t if you’re the CEO of one large business. ●
How to reach: CEO to CEO Inc., (925) 829-8190 or www.ceotoceo.biz
