John L. Ward's scientific contributions
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Publications (172)
Some of the strong personality characteristics that enable entrepreneurs to succeed against the odds in launching their business may actually complicate the transition to the sibling generation. For example, children who are raised by controlling parents may not develop great self-confidence which could affect their ability to build a team or to ma...
Sometimes with all the time and work required to become an effective and successful ownership and leadership group of siblings, it is easy to lose sight of what a family business is really all about: family. It’s about each sibling’s own family and extended family, Mom and Dad, brothers and sisters and their spouses, and nieces and nephews. Without...
Love and strong family ties can blind some families to future risks. When siblings have trusting and close relations with one another, they often resist setting up formal processes and policies because they do not feel they need to create so many structures and systems to manage their company. After all, they grew up together, work well together, s...
While proactively planning for the rise of the sibling generation will improve the odds of a smooth intergenerational transition, its accomplishment requires hard work, tenacity, and patience. There will be bumps in the road and roadblocks. We have alluded to some of these challenges throughout this book, but let’s take a closer look at some of the...
Successful transition to sibling generation leadership requires preparation and effort by all stakeholders of the family business. The complexity of the sibling stage in a family business typically requires adjustments in management, business governance, and the family’s decision making. Ideally, the senior generation works with the next generation...
The appropriate management structure of an enterprise at the sibling stage will vary depending on the business, industry, markets served, number of employees, etc. It is beyond the scope of this book to prescribe optimal management structures, but it is almost certainly necessary to move the company away from the hub-and-spoke model of management t...
Planning for the continuity of your enterprise has never been more relevant. As the baby-boom generation (persons born between 1946 and 1964) is reaching and passing the age of 60, our culture is facing an unprecedented “bubble” of individuals moving toward retirement age. In an extensive survey of family businesses, wealth management advisors Lair...
The transition from the founding generation to the sibling generation is considered the most challenging of succession journeys for families in business for many reasons. Some significant ones include: the intensity of sibling relationships, the arrival of in-laws, and the difficulties the founder may have in letting go. We will touch on these and...
Susan’s story is a composite of the many, many stories we have heard from spouses in business-owning families. Quite simply, it is hard to marry into a family business. The arrival of in-laws in the family system is a significant event; it represents growth in the family and the possibility of a next generation, but it also generates a lot of anxie...
The sibling partnership stage is generally more intense and volatile than any other. As a result of their growing up together, the level of intimacy is higher among siblings than it is in the cousin generation that follows. This deeper knowledge of one another can foster a particularly strong partnership between individuals who can finish each othe...
Ownership in a family business can be a rewarding and important role. It means stewardship, protection and nurturing the family business. As a guide for shareholders, this book will developing understanding and insight into the role of becoming more valuable as an owner, not just financially, but intellectually and emotionally as well. It aims to p...
Statistics show that many family businesses fail by the third generation-- those that survive are able to navigate the transition from a sibling run business to an expanded family run business. Here Aronoff and Ward show siblings and cousins how to work together on key issues that are critical to the future success of the business including how to...
Strategies for family firms, unlike those of other businesses, can and should incorporate family factors. Responsible and disciplined strategic integration of family and business goals, strengths and values produces powerful results. In Preparing Your Family Business For Strategic Change, you'll learn: * How to reach your family business's strategi...
Family business leaders of the past could often guarantee decades of success built on a single, long-lived strategic plan. But the current rapid rate of change makes ongoing success an infinitely more difficult challenge. What works today is passé tomorrow. In Make Change Your Family Business Tradition, those involved in or with a family firm will...
Families can be good for the businesses they own, and businesses can be good for the families that own them—particularly when owners pull together in the same direction. Like one hand washing the other, a business can provide the cohesive focus that brings a family together, and the family cohesion, in turn, benefits the business and moves it forwa...
As you and your cousins think about how your business should be managed while you are in charge, it is helpful to review some of the changing dynamics we described earlier. Your parents, the sibling generation, may have been seen as equals. Each probably had his or her own area of responsibility—perhaps a business within the family enterprise—and d...
When we consult with a group of cousins in a business-owning family, we nearly always open the proceedings with two questions: “Do you want to continue to own this business together? If so, why?” These are the most critical questions the cousins have to answer and we urge them to be particularly thoughtful as they explore the questions together. It...
When you act like an owner—that is, a good owner—you accept a host of interesting and challenging responsibilities. You adopt what we call an “ownership attitude.” If we had to describe what an ownership attitude means in one word, we’d say stewardship.
How you manage your resources—people, money facilities, equipment, and so on—has a great deal of influence on your ability to change and to do it in a timely, appropriate, and profitable fashion.
Accepted wisdom suggests that family businesses are more flexible, more innovative, and more responsive to market changes than publicly held companies. Family firms don’t have to answer to outside shareholders. They can move quickly. They can turn on a dime.
It’s one of the facts of life: Nothing is constant except change. Let’s look at some of the events—or changes—that trigger change within a family business:
Death, incapacitation, or retirement of a family member. While the death of any company’s CEO is always traumatic, in a family business, the death of family members—and non-family key executives...
To create a tradition of change in a family business, you must develop a culture of change. In other words, you need to put together an environment that embraces change, encourages it, and thrives on it. In a culture of change, an organization is flexible and adaptable. You can have continuous incremental and relatively painless change rather than...
The foremost responsibility of a new leader in a family business is to preserve the best of the past while at the same time opening up the organization so that it is willing and able to accept and embrace continuous change. Mastering this paradoxical challenge is, we believe, central to the success of successor leadership.
Paradox: How you define your business and what brought it success determine your ability and freshness to see new ways to do business. A narrow definition of the business and its success factors can lead to paradigm paralysis.
For many business owners, recognition of the need for change in compensation practices begins a process of transformation.
A key to an effective compensation system is building trust among family members, employees, and others. Here are some issues that often arise as business owners try to build trust in the compensation planning process.
Why should business families be concerned with the workings of the family? Shouldn’t business and family issues be kept separate?
Most enduring family businesses hit compensation trouble spots. Awareness of these potholes can help the business owner develop policies in advance to deal with them. A sampling of “sticking points” is contained in Table 8.
Many compensation conflicts stem from misunderstandings and misinterpretations, misaligned and unrealistic expectations, a lack of awareness about how equitable pay systems should work, or bigger problems resulting from historical accommodations. Without a working knowledge of a rational compensation system, attempts to correct an existing problem...
Many business families are so accustomed to weathering hardships and challenges together that they assume they can get through almost anything.
All of the traits of normal families discussed so far have a common feature: they address how individuals within families interact and affect each other. This quality of interrelatedness has given rise in recent decades to a whole new body of thought regarding how the family works as a system. In this section, we will discuss how some of these basi...
Strategic planning is not necessarily a straightforward, objective process in a family business. Current and future leaders who understand this spare themselves, their managers, and their families considerable frustration.
As the year leading up to John Smith’s planned retirement wears on, he prepares to work with a family business consultant on the financial issues raised by ownership succession. But he is hampered by a growing sense that all the fun seems to have drained out of life. Roh and Kathy are avoiding one another, and they argue a lot when they do work tog...
Many people assume, amid all the talk about values in political and business circles, that “values” are always something good.
Here are a few more principles that, in our experience, have helped many business families:
Develop a family code of conduct. (See Exhibit 5.)
Hold family meetings. (See Family Meetings: How to Build a Stronger Family and a Stronger Business.)
Keep confidential all of your discussions about family patterns and behavior.
Never undermine another fami...
While there are no hard and fast rules about what policies a family firm needs or when it needs them, we believe there are core policies that benefit most, if not all, business-owning families. These include:
Family decision-making/governance policies
Compensation/performance evaluation policies
Employment policies
Codes of conduct
A Seattle salesperson at Nordstrom, the big, family-controlled retail chain, had just finished serving a customer when she noticed the woman had left her plane ticket at the counter before racing off to the airport.
As the Smiths have discovered, any transition that brings a reorganization of the family, the business or both can lead to tension or conflict in even the most peaceful families.
Because it contains several family business policies, developing a shareholder agreement is often a great challenge to business-owning families. Such an agreement is needed whenever a business has more than one owner (as in a partnership), or when a founder begins to distribute shares to children or other family members. Shareholder agreements—some...
In addition to the core policies that will benefit most family businesses, there are a number of other issues around which a particular family may find it helpful to develop policies.
Sam Walton’s father was an avid trader who bargained hard for low prices in the Depression-era dust bowl of Oklahoma and Missouri. The late Mr. Walton took that core value and transformed it into Wal-Mart, a retailing empire built around serving the customer with low prices. The same value drove his relentless insistence on squeezing costs out of t...
As we discussed in Chapter 4, we like to see the leadership solution evolve over time. When the siblings work together as an executive team, they begin to develop their own leadership and decision-making systems. And the choices available to the family become clearer.
The principle of parallel focus on the interests of family and business, in our experience, has proven the best and most enduring strategy for successful family businesses.
Family and business are so fundamentally different that they naturally pull apart over time.
A man we’ll call Roger and the family he works for represent almost the ideal when it comes to the relationship between a key non-family executive and a business-owning family. And the benefits of this good relationship are standing all parties in good stead now that the children are beginning to take positions of leadership in the family business.
The functions of good family business governance stay pretty much the same as the family and the business grow.
Policies governing the relationship between the family and the business are important to any family business. What is more important, however, is the process family members engage in when they create policies. We cannot emphasize that enough.
The history of family business is full of examples of what can happen in the absence of effective governance.
Several communication techniques have proven effective in helping the family and the board function smoothly and fostering trust and confidence between the two.
An important way to move toward the goals of a strong business and strong family is through family meetings.
The potential contribution of the board in the private company is often underestimated by family business owners.
A well-organized family and board, while focusing on their distinct responsibilities, also share broad areas of synergy.
Whatever the impetus for a family meeting, the act of gathering as a family can encourage members to act on deeply felt, shared values. The result can be a landmark achievement for both the business and the family.
This could be called the Age of Sibling Partnerships. Where once a business was almost invariably handed down from a father to a son, we are seeing a major shift in which businesses increasingly are passed from a founder to a next-generation team of siblings.
Each generation of a family business is unique and faces its own special set of challenges. We believe, however, that the sibling team—frequently the second generation—faces some of the most difficult challenges of all. If you are a member of a sibling group, be prepared to spend enormous effort building and maintaining an effective team. The deman...
While families often have meals together or gather for holidays or special occasions, the idea of holding a structured, purposeful family meeting is new to most. Here are some practical suggestions for planning, arranging, and conducting successful family meetings.
For a business founder, it is never too early to begin thinking about and planning for the transition of the business to the next-generation sibling team. In fact, how children are treated even when they are small and how they are reared can help that future partnership be successful. All that’s needed is incredible foresight and the willingness to...
When leadership and ownership of a business move from the founder to next-generation siblings, the enterprise doesn’t just change hands. It often moves from being an entrepreneurial, informally run business to one that needs more formal structures, systems, and procedures. This formalization is often referred to as “professionalization.”
Just as the attributes described earlier signal benchmark service by an advisor, some behaviors should sound an alarm.
Family business leaders are frequently resistant to and uneasy about putting non-family members into key executive positions. Talented executives are often equally cautious about joining family firms, even though they see many benefits of doing so.
In a printing company we’ll call Hubbard Graphics, Dad learned that his three kids were considering purchasing a very expensive German press. Yes, he knew he had put them in charge and begun semi-retirement. But he thought buying the press would be a big mistake. It was just too costly, and the company was not doing the kind of printing that would...
Turning any group of people into a team is a tough assignment. Forging two or more siblings into a team, especially if they didn’t have team-building experiences growing up, is even tougher. The emotional issues we talked about earlier frequently get in the way—all the more reason to be aware of and understand these issues so that any negative impa...
Throughout the world and across the centuries, family businesses share a common set of challenges: liquidity for shareholders, capital for business growth, and responsiveness to shareholders’ control objectives. Let’s consider the case of Carwood, a U.S. family business:
Judging from their beautiful new headquarters on the outskirts of Cleveland, t...
In the previous chapter, we described 11 ways to raise external capital for growth. Because of the increasing availability of private equity capital for family companies, this chapter will explore the private equity solution in much greater depth.
Often, a primary objective for business-owning families is to maintain control over their own destiny. In today’s global economy, one question that family business owners face is whether to sell the business, keep it as it is, or expand it internally or externally.
Planning and implementing succession is a delicate task that breeds conflict. It can be frustrating for everyone involved.
Here, we are referring to management succession. Later, in Chapter 7, we address owner succession. A smooth succession won’t happen unless there is a willing, competent, and well-prepared successor or successor team. And it doesn’t make sense to wait until your children are young adults to think about their development as successors. While the proc...
Families often hesitate to convene regular family meetings. For some, the formality of meetings seem strange when family communication has been spontaneous and informal. For others, a meeting’s democratic spirit seems unsuitable for the inequality of parents and children.
Business families have found that even when succession is not a current issue—but most certainly when it is—a means of productively involving the broader family is critical.
The attitude of the family business leader is the single most important factor in any succession. But preparing for succession often brings an owner face-to-face with unexpected emotions and daunting personal obstacles.
No matter how powerful or compelling the vision of the entrepreneur, most express it only in bits and pieces. Entrepreneurs tend to depend upon their decisions and deeds, rather than words, to convey their vision to others.
While venture capitalists are not always the best friends of family business, they have a useful rule of thumb: as soon as you get involved in any deal, start working on an exit strategy.
The entire family should be aware, in a general sense, of plans for successor development.
Preparing someone else to take over your business can be a confounding challenge for many entrepreneurs. Let’s take a look at some of the personal issues it raises.
The successor will need, usually between the ages of about 25 and 35, to develop basic business skills as a foundation for future leadership. Let’s take a look at some elements of planning for this period of intense personal growth.
Joining the family business offers the rare opportunity to build one’s own destiny on a foundation laid by previous generations.
For many family firms, working with an independent board is a new experience that poses unforeseen rewards—and challenges. Every board meeting can be an adventure, an exploration of the unknown. The spontaneous interaction of experienced business owners, entrepreneurs, and managers facing common questions can spark insights and ideas gratifying to...
A leader with exceptional integrity and a clear vision for his company, Charles Collat, Sr., was instrumental in helping build Mayer Electric Supply into a $680 million concern in the southeastern United States. However, his longstanding presence made the issue of succession a delicate one to address—something the company’s advisory board helped to...
When the owners of McKee Foods decided to incorporate independent directors into their company board, they knew they were going to get insightful, perceptive feedback and guidance.
Good advisors to the family business are more than just experts in their field.
A common conception about family business throughout the world holds that the first generation builds the business and later generations harvest the business rather than reinvesting for long-term success. Nonetheless, many family businesses strive to achieve a lasting legacy. A strong, independent board of directors is one tool to strengthen the bu...
Jeffrey doesn’t like the way things are going. As the 17-percent owner of Woodruff Hardware, a wholesaler serving southeastern Pennsylvania, he thinks his opinion ought to count for more. A member of the family business’ third generation, Jeffrey shares ownership equally with two brothers and three cousins. Only his brother, Phil, the CEO, and his...
Leading a family business can be one of the most complex jobs imaginable.
Every family business has “insiders” and “outsiders”: owners who work in the business and owners who don’t; family members who own shares and family members who don’t; married couples where one spouse is an owner and the other is not; owners with voting stock and owners with non-voting stock or family members whose shares are held in trust, majorit...
Family business succession is an often misunderstood concept. Many think of it as simply passing the top executive slot from one person to another at a certain point in time. But it’s much more extensive and complex than that. Among other things, succession involves preparing the entire family business governance system for continuity. It’s about t...
At a very early age, children begin to learn attitudes about money, wealth, and pay that stay with them for a lifetime.
Citations
... Partager la direction d'une entreprise en fonction de ses goûts, compétences et savoir-faire a du sens (Heenan & Bennis, 1999). Le sujet renvoie cependant à l'identification des facteurs améliorant la probabilité de réussite d'une direction partagée, dans la mesure où cette approche collective s'inscrit dans la durée (O'Toole et al., 2002 Les trois approches présentées dans le tableau 1 amènent à des situations très différentes mais soulèvent une question commune relative à l'équité (Ayres & Lansberg, 1989;Aronoff & Ward, 1992;Nicholson & Bjönberg, 2008) entre frères et soeurs : est-il juste de partager la propriété entre tous les enfants, dans le cas où l'un d'entre eux travaille dans l'entreprise depuis plus longtemps que les autres ? Cette interrogation nous guide, et dans un souci d'homogénéité, nous ne retenons que les cas de figure dans lesquels les membres de la fratrie se partagent de manière égale la propriété de l'entreprise (première colonne du tableau 1). ...
... LMX theory emphasizes a dyadic relationship suggesting that depending on the relationship between leaders and followers (Graen & Scandura, 1987;Graen & Uhl-Bein, 1995), lower or higher quality exchanges will be forged (Wat & Shaffer, 2005). We move beyond the dyadic relationship between leader and follower and find that a network of relationships with various family and non-family stakeholders is key to fostering high-quality relationships (Salvato & Corbetta, 2013;Ward & Aronoff, 1994). This finding is in line with recent research on social capital highlighting how intra-and extra-firm and -family relationships interact with each other, affecting goals, resources, and governance in family firms (Zellweger et al., 2019). ...
... At the same time, the presence of outside directors alone, without any family presence on the board, may divorce business owners from the realities facing their company and can instill a profit-oriented mentality, which may drift the company away from family values (Parada et al., 2019) and decrease the allocation of resources towards employee well-being (Le Breton- Miller and Miller, 2016), eventually decreasing workplace social performance (Pendergast et al., 2011). Therefore, a mix of family and outside board members will be most efficient in enhancing the firm's workplace social performance. ...
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... While the state offers more stability than alternative sources of funding, it does compromise private initiative and creativity, leading to sport becoming entangled with politics (Van Eekeren, 2006, p. 10). Of course sport is not totally 'free of politics' as former International Olympic Committee (IOC) chairman Avery Brundage so boldly stated over 50 years ago (Cashmore, 1990). This is nowhere more evident than South Africa, which endured sports boycott during apartheid and has since put sport at the forefront of state policy, hosting mega-events such as the 2010 World Cup and developing an agenda and scorecard for transformation in sport. ...
... To address this research gap, we present a conceptual analysis of shareholder agreements and their effectiveness in attaining family and business goals as a function of strategic fit with relevant dimensions of family firm heterogeneity. On the one hand, we review the practitioner literature on shareholder agreements to distill four dimensions that characterize them (Aronoff, Astrachan, & Ward, 1998). On the other hand, we focus on two prominent dimensions of family firm heterogeneity namely the family's value and goal system (Frank, Suess-Reyes, Fuetsch, & Kessler, 2019;Seaman, Bent, & Silva, 2019;Zellweger, Eddleston, & Kellermanns, 2010) and the level of maturity of the family (e.g. ...
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... On one hand, a team with multiple successors who have complementary skills might be more successful (Aronoff 1998;Cater and Justis 2010;Farrington, Venter, and Boshoff 2012). But on the other hand, team dynamics could give rise to specific management challenges related to collective decision making and task sharing (Aronoff et al. 1997;Cisneros and Deschamps 2015;Nelton 1996), which ultimately might lead to succession failure. ...
... They are reluctant to permit information to be obtained from employees (Ward, 1997) and they protect knowledge about their internal activities related to the competition (Donnelley, 1988). Similar difficulties in obtaining data relate to the values and traditions of business families that avoid negative advertising (Aronoff and Ward, 1997) and prefer not to say anything that might damage their reputation. ...
... Ni siquiera será suficiente con aprender a responder y adaptarse a los cambios del entorno. Para perdurar en el tiempo será preciso tomar la iniciativa y promover el cambio (Aronoff y Ward, 2001;Amat et al., 2008). La gestión emprendedora que asegure el crecimiento rentable y sostenido es fundamental teniendo en cuenta además el incremento de complejidad que se incorpora al sistema familia-empresa con cada nueva generación. ...
... Because of their inherent diversity, it is also impossible to provide a simple concept of a family company (Pan et al., 2016;Peruzzi, 2017). In these organizations, family values and their roots are of considerable value, and younger generations have continued to stay loyal to the way their family conducts business (Zahra, 2003;Aronoff et al., 2016). These dimensions are vital because the family's history and values are preserved unchanged and become a practice that anchors decision-making. ...
... It is also known that the economic and cultural background of the nation influence family policy decisions and, thus, family firm's decision-making (Ward, 2004). ...
