Chapter 2

DEVELOPING ENTREPRENEURIAL LEADERSHIP SKILLS

Thomas Alva Edison held 1,093 patents over his life time, having at least one new patent every year for sixty-five consecutive years. Best known for inventing the phonograph and motion picture camera and successfully commercializing electric lighting, he symbolizes the relentless pursuit of innovation and continuous improvement. “I can never pick up a thing without wishing to improve it,” he once remarked.¹ While Edison is unique in his accomplishments, enterprising families try to imbue his mind-set of ceaseless fine-tuning and ability to inspire others in every family member. Each generation views itself as the family steward responsible for building on the legacy of its predecessors. Continuous adaptation and improvement is the core of the stewardship mind-set.² Some long-lasting progressive families do indeed accomplish this state where entrepreneurial instincts become a norm.³ However, this state is not a destination but a journey of continuous learning in which both senior and junior generations play an integral part. Focusing on the development of intellectual, emotional, and social skills of members of the next generation, enterprising families embrace whole-person learning.⁴ Opportunities for such learning present themselves in five forms.⁵ The end of this chapter contains a work sheet that lets you keep tabs on what you already do well in terms of each learning form and where it might be helpful for you to build some more skills.

Figure 2.1. Six Forms of Learning to Develop Entrepreneurial Leadership Skills

Learning by Absorbing

An advantage of a family that runs a business is that family members can absorb a lot of information just by being alert, by listening and observing. Often by listening to family conversations younger members can understand instincts about self and surroundings; learn how to evaluate, take, avoid, and deal with risks; see the values that guide decision making; and learn the words, tone, and gestures that encourage others to follow a leader. Some younger people are naturally drawn toward the discussion of such issues, while others are not terribly interested and easily drift away into their own thoughts. Of course, familial norms vary in terms of discussing business or family matters around children. Regardless of these norms, in today’s fast-paced lives, it takes discipline to be available for family gatherings and to be “in the moment” during them to reap the unique learning benefits from family members’ experiences.

The power of gathering over a meal transcends the history and geography of humanity, as sharing food has a profound effect on building relationships and understanding the others’ perspectives. How often meals are shared together varies over the life cycles of families and individuals. Robert Tracy, a father of eight, was thirty-four in 1960 when he started a modest powdered-milk delivery service in Mount Sterling in western Illinois. Today, Tracy’s Dot Foods Inc. is the largest food redistributor in the United States, delivering more than 100,000 products to distributors across the country, employing over 4,000 workers, and having sales exceeding $4.5 billion. Joe Tracy, son of Robert and Dorothy and the current president and chief operating officer of Dot Foods, recalls observing that his father loved to talk with employees and customers. And every other month, his mother would invite a different group of customers to the company to listen to what they were doing right and how they could improve their services. In an interview with the Family Business Magazine, he explains how dinner conversations in their family reinforced the notion that while family harmony was Rule #1, family members could disagree and debate with candor without being destructive:

We love to debate and don’t shy away from conflicts. … Our parents often didn’t see eye-to-eye. We learned from listening to them argue at the dinner table that people could have different perspectives and still share a common vision. Our comfort level with disagreements was a good preparation for the business.⁶

It is not necessary for such quality family time to be spent around meals, however. Each family is unique and can arrange some form of regular get-togethers that facilitate the flow of conversations. Families can share and listen to stories and dreams during walks or drives, vacations or celebrations, or even sad family gatherings. The rhythms of some families naturally carve out times for easy flowing conversations. In such cases, all that is needed is to be an active participant and think of ways to deepen the experience and mutual learning. If the current rhythms of a family do not encourage such conversations, there is a unique opportunity to organize new activities that bring the family in close range to listen to and observe each other. Entrepreneurial leaders enjoy starting something new and inspiring others to energetically follow along. Wherever a gap exists, an opportunity awaits.

Junior generation family members often have more influence on the family’s choices than they may realize. If you want to start something new to enhance the active sharing and listening in your family, you have in your favor the human tendency that the American social psychologist James Pennebacker labeled the “joy of talking.”⁷ In an experiment, he divided strangers into small groups. Each group was given fifteen minutes to talk about their members’ favorite subjects—school, career, hometown, and other topics. After the assigned time, the participants individually reported how much they liked the group and how much they learned about other group members. Interestingly, those who talked more reported liking their group more. The talkers also felt they learned more about the group, even in cases when most members in their group did not say much.

“Storytelling is a very old human skill that gives us an evolutionary advantage,” notes the celebrated author Margaret Atwood. For example, “[I]f you can tell young people how you kill an emu, acted out in song or dance, or that Uncle George was eaten by a croc over there, don’t go there to swim, then those young people don’t have to find out by trial and error.”⁸ Families have stories about their history and its players, its conquests and its defeats. These narratives shed light on the business and its cast of characters, values held sacrosanct by the family, lessons learned, and pitfalls to avoid. In a study of forty-one wineries in Sardinia, researcher Nadine Kammerlander and her colleagues⁹ discovered that a “founder” focus in family stories deters innovation by later generations as it encourages sticking with the ways of the past. In contrast, when “family” is the focus of the stories, innovation by next-generation members is enhanced as the past success inspires them to make future-focused decisions.

Stories of some enterprising families, like the SC Johnsons, are shared through films providing a glimpse into how each generation liberates the next to make future-focused decisions. In the film Carnaúba: A Son’s Memoir, fourth-generation leader Samuel C. Johnson (Sam) received a posthumous letter from his father, who died in 1978, encouraging him to run the company as he felt was right for his people and to pay no heed to those who complained that he was not running it as his father had done. This led Sam to conclude that “as a son I shouldn’t worry too much about whether I have lived up to the expectations of my father … but whether we as fathers live up to the expectations of our children,”¹⁰ thereby reinforcing the stewardship mind-set in this remarkable family.

In enterprising families, some stories lurk on the surface and appear with ease during family gatherings … but more digging is needed to surface other, perhaps more interesting stories.

A lot can be learned simply by spending time and listening to family stories. Research suggests that an attentive listening skill makes us more attuned to others’ thoughts and feelings as we become adept at picking cues from words and body language used,¹¹ even noticing the changes in facial expressions during a conversation. It is amazing how much we can learn in a short time if we just let people speak, then listen with our head for the evidence and with our heart for the emotions.¹² Mindful listening is a skill that needs to be cultivated, however, as the human tendency to talk resides within each of us. And it is hard to really listen when talking or planning the next thing to say, or reaching out to check the electronic message that just arrived. You might want to try the little exercise of sitting quietly and mindfully at home or in school or a workplace and simply absorbing what is going on around you. Try for five minutes, then increase to ten, and then to twenty, and see how the voice of silence becomes louder and you start to see and hear things you never knew existed around you. Don’t forget to keep tabs on when you switch from an alert, conscious mode to a more introspective, meditative mode. Slowly, such practice helps to build awareness of self and the surroundings—the ambidextrous skills useful for entrepreneurial leaders. While such awareness is surely the primary benefit of absorbing by attentive listening and observing, there are secondary benefits to all other ambidexterity dimensions discussed in the last chapter. Examples include contemplating and clarifying one’s dreams and better understanding current or potential team members, learning the influence tactics in use, and different ways to handle new beginnings and endings, entries and exits.

Learning by Interacting

In enterprising families, some stories lurk on the surface and appear with ease during family gatherings. Attentive listening is sufficient to absorb the nuances of such conversations. But more digging is needed to surface other, perhaps more interesting stories. One possibility is to ask questions. “But not all questions are equivalent,” notes Edgar Schein in his book Helping. He contends that the social art of asking questions—what we ask whom, how we ask, where we ask, and when we ask—is essential to build trusting relationships and ensure better communications and collaborations.

Schein has proposed¹³ that to draw someone out and to get an honest response, it is necessary to engage in “humble inquiry,” that is, to ask questions based on curiosity and interest in the other person—in other words, questions for which we don’t already know the answers. He argues that for a question to lead to an honest response, two conditions must be met. First, an individual must believe that the person asking the question is genuinely curious and interested, and second, he or she must have an open mind to receive the information shared. Apparently most of us tend to be quite adept at spotting an insincere question, regardless of how it is phrased, and knowing when the recipient is not ready to receive information. The diagnostic we often use to decide whether or not there is a genuine interest is how well he or she hears the response and the follow-up questions asked. Family members, in particular, deeply understand each other, know when a question is asked sincerely or not, and sense when a family member has stopped listening.

Is there a set of standard questions that are more likely to solicit honest responses from family members or from those working in and with your family business? The short answer is no. But some questions are better than others. The aim is to ask questions that do not influence the content or form of the responses. Exploratory, open-ended questions that encourage the other person to tell his or her story in an unbiased way are better than those that can be answered with a simple yes or no. Questions that draw on the experience of other family members work best because they imply that their experience is important and valued. Such questions—usually short in nature—avoid inadvertently steering the conversation in a particular direction and instead leave it open for the respondent to relax and share information with ease.

Venerated talk show host Charlie Rose, who has spent almost four decades interviewing heads of states, industry leaders, and movie stars, was asked how he developed his light touch that allows his subjects to lead a conversation. He noted:

It’s mostly about listening. It’s surprising to me how many people in this business don’t listen. They’ll ask something that the person has already spoken to because they’re thinking about their list of questions. I’m never that: I’m always in the moment. I do a lot of research but the conversations are spontaneous.

And, on his famous pregnant pauses in interviews, he says:

You have to let a conversation breathe, let it have space. … I think I help people explain themselves by the nature of the engagement, asking the right questions, making it feel like there’s no one there but the two of you, being silent for a moment, and then saying, “But is that all?”¹⁴

Here are some triggers to open up or build family conversations related to business.

• “Tell me about …”

• “Really, tell me more …”

• “Go on …”

• “Like what? Can you give me an example?”

• “How did our family get into …”

• “How did we change directions …”

• “What might be some interesting future directions for us?”

• “What did we (our family) do about that?”

• “What did she (or he) do then?”

• “How did you (or our family) feel about that?”

• “How would they have reacted if we had told them how we felt?”¹⁵

Such questions are useful to learn the basics about a family and its business, although if you ask and don’t really listen to the answers, it makes things worse. Faking interest kills relationships and closes off others. But once these basics are learned, the questions that start with why enable deeper levels of understanding. What, when, where, how, and who questions shed light on a focal event, the time it happened, its location and the process through which it happened, and who the players were.¹⁶ But only why questions explain the subject and lead us to a deeper understanding of it and the underlying social, psychological, physical reasons for events and decisions.

Try this. Ask a family or nonfamily member involved in your family business a question starting with what, when, where, how, or who. Listen carefully to the answer. And then ask a follow-up question starting with why? Notice what you learn from the two responses. Remember the purpose of asking these questions is to interact with the person, not to immediately refute the answers.

Members of enterprising families learn a lot about each other’s core and evolving interests and needs through regular interactions. They are therefore better positioned to identify mutually beneficial opportunities for next-generation members to engage in the family enterprise. For example, Brian Butler,¹⁷ a third-generation member of Dublin Cleaners of Ohio, a company with a good reputation for cleaning bridal wear, was leading an independent software company when his father Greg asked for his help on a one-year project to improve the systems of their dry cleaning company. Brian had spent a lot of time with his father when Dublin Cleaners was under construction, so he was attracted to this project to help his parents’ company. By collaborating with another software company, he created an identifying bar code that could be attached to the clothes, thereby improving accuracy without increasing the labor. Next, he added a robotic order assembly system that allowed customers to track their orders through the company website or a smart phone app. While working on these projects, Brian got so involved in the family firm that he joined it full time. Under his leadership, Dublin Cleaners expanded from one to five locations. His mother commented that “Brian really took the business into the twenty-first century. Everything he has done has really made it (Dublin Cleaners) leaps and bounds ahead of other dry cleaners.”

Faking interest kills relationships and closes off others.

Families vary in their prevailing beliefs and norms regarding hierarchy and equality across generations. In some families the norm is for the senior generation or elders within the same generation to have the last word, and top-down direction flows easily. In such contexts, how can junior family members establish their voices without sounding disrespectful, particularly when opinions differ? Examples of differing views might include career-related decisions such as studying a field that is different from familial norms or expectations; working in another company, industry, or country after graduation; starting in a particular position in the family business; asking for formal evaluations or promotions; or launching a new venture at the start of a career.

It is helpful when family members have sensitivity and understand that perspectives often vary because of differences in life stages and experiences. When building a case for one’s position, it helps to frame the discussion around why unorthodox steps are needed or how the proposed changes are likely to benefit the enterprising family. Every course of action will have not only some pros and cons but also contingencies, that is, reasons things could go wrong. Inevitably, it helps to think from the other’s perspective and to understand why they may have reservations and what those might be. If someone is prepared to present logical, fact-based responses to such reservations when they come up, not only does that person increase the likelihood of getting a favorable response but such thoughtfulness helps to earn the respect of influential people. It is not only the content of what to present and the preparation that goes into it but also how it is presented. Some school-going members of the next generation find it helps to join debating clubs or case competitions, as that enables them not only to build their analytical skills but also to become more comfortable in thinking on their feet and articulating their position clearly. And senior family members might get better responses if they are willing to explain the reasons for their views and (when possible) the history that has led them to their firm views.

The questions that start with why enable deeper levels of understanding.

Through thoughtful listening, observing, and asking, family members can understand why employees follow family or nonfamily members in leadership positions and why some individuals are better at coming up with new ideas while others are better at executing them. Over time, such distinctions help them to become adept at both creating new possibilities and leading people. Both take practice. Seniors in enterprising families support the building of these skills and the development of all voices even if they hold different views.

Learning by Reflecting

Learning to absorb and interact with the world around is a good starting point for next-generation members, as there is a lot to learn from the surroundings. However, amidst the din of past success and the prevailing familial norms of hierarchy, it is perhaps more challenging to discover one’s true passion(s) and learn to think independently. Yet, such discovery lies at the heart of developing entrepreneurial leadership skills, given the uniqueness of each individual’s talents and interests, upon which excellence must be built. Entrepreneurial excellence demands a 24/7 attention span, which is difficult to sustain without an alignment of interests and talents.

Research on failed successions in family businesses¹⁸ indicates that mindlessly following the past is as harmful as the rebellious rejection of it. Families that succeed across generations align the interests and ambitions of the next generation with the business, and vice versa. Cristina Henriquez, a third-generation member of the Henriquez Group of El Salvador, explains how this is done in her family:

As a business we (they) never really developed a core activity but rather always had a portfolio of different investments. … Usually the question of succession in a family business is dealt with by asking whether the next generation is interested in the family’s activities. Mario Henriquez (the founder) was certainly not discouraged by the fact that his sons’ passions rested in sectors other than retail. He knew how to convince them to join the family firm. “He just made it happen,” declares Cristina. “My uncle, Luis, was interested in banking so my grandfather bought shares in a bank. My father was passionate about coffee and agriculture so my grandfather purchased a farm. His motto being to keep it in the family.”¹⁹

But for this to happen, members of the next generation must be able to listen not only to others but to their deepest thoughts as well, so they can know what they are really interested in. Nevertheless, thinking and listening to oneself is hard. Henry Ford called it “the hardest work there is, which is probably the reason why so few engage in it.”

Today, a Hollywood Walk of Fame star has the name of celebrated comedian Steve Harvey. This is a far cry from his early life with a coal miner father and a mother who worked in a school cafeteria. As he reflects on his career trajectory, including stints as a mailman, a carpet cleaner, an insurance salesman, and a boxer, he talks about the importance of identifying one’s gift:

Our creator, in his infinite wisdom, created every single soul with a gift. Your gift may be totally unique or it may be similar to someone else’s, but know that your gift is yours.” When we utilize our gift, the universe thanks us by giving us an abundance of riches—from abundant opportunities to good health to financial wealth … Incorporating your gift into your life and sharing it with others will bring you joy, passion, and a new vigor for living life to the fullest.²⁰

As Harvey’s winding career path shows, discovering one’s “gift” can take a long time. One good way to understand this passion is to pay attention to what triggers one’s curiosity. When asked what energizes him to take on new initiatives at age eighty-three, Rupert Murdoch, who transformed his father’s news business into a global media conglomerate, remarked:

I am a permanently curious person. I probably waste my time being curious about things that have nothing to do with the business sometimes. What keeps me alive, certainly, is curiosity.²¹

Walt Disney observed, “We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.”²² Perhaps Eleanor Roosevelt best captured the matchless importance of curiosity when she said:

I think, at a child’s birth, if a mother could ask a fairy godmother to endow it with the most useful gift, that gift should be curiosity.²³

Curiosity is the desire to know more, learn more. It is triggered by things that surprise us because they do not conform to the norm²⁴ or because there could be multiple reasons for an occurrence. Psychologists have also found that we are least curious when we don’t know anything at all about the topic—we simply don’t know what to ask or think. Similarly, our curiosity also wanes when we know a lot about a topic because we have already asked all related questions that could have been asked. In other words, knowing a little triggers the desire to know more.

Enterprising families promote the cultivation of curious minds by exposing family and nonfamily members to different ideas and experiences through travel, conferences, or visits to other family enterprises. Perhaps the easiest way for such exposure is through reading or by watching movies, documentaries, or thoughtful commentaries on different topics. Access to these sources of new ideas has become significantly easier with the availability of electronic and recorded books, Ted Talks, and other media. Voracious readers not only broaden their own perspective and gain a deeper appreciation of themselves and their surroundings, but they also enrich their conversational repertoire. They use others’ experiences and thoughts to broaden their cognitive horizons and learn the nuances of developing different skills necessary for entrepreneurial leadership. It is no surprise that some of the most successful entrepreneurs like Bill Gates, Warren Buffet, and Oprah Winfrey are well known for their avid reading habits. The younger generation of entrepreneurial leaders are not only reading themselves but take pride in recommending books to others.²⁵ For example, as his 2015 resolution Mark Zuckerberg, the founder and CEO of Facebook, not only vowed to read a book every two weeks, he invited people around the world to join him. There is no reason to be disappointed if some members of your family have not yet discovered what they are truly interested in or curious about. The only way they can find this out is through continuous exposure to new ideas and experiences.

Disciplined thinking not only helps in the identification of core interests of members of an enterprising family, but it also helps in decision making when conflicting values and priorities must be considered. It is in these less scripted parts and uncharted territories that entrepreneurial opportunities are more likely to exist. According to Harvard researchers Ikujiuro Nonaka and Hirotaka Takeuchi, wise leaders²⁶ relentlessly practice mind-stretching routines aimed to get to the core of the problem or situation. They construct and test alternate hypotheses by combining variables in unknown and untested ways to develop new solutions. Some individuals find solitude helps them to practice such mind-stretching routines, while others do them best while walking, cooking, gardening, dancing, hiking, swimming, or doing other activities. And some people need to engage in deep exploratory conversation with a supportive, non-judgmental person to think deeply.

Enterprising families realize that although listening, observing, and asking can seed different ideas in the mind, reflecting and thinking help to combine these ideas in unique ways to produce new combinations and ideas that entrepreneurial leaders of each generation can act upon to make a unique mark on their family enterprise.

Learning by Working

The overlap between family and business systems distinguishes family enterprises from all other organizational forms. Work easily seeps into the family domain, and vice versa. Just as next-generation family members often find themselves within earshot of business-related conversations, similarly those serious about getting some work experience can find opportunities with relative ease. Enterprising families find creative ways to engage the next generation at a young age. For example, at age thirteen, Scenic Root was able to get her work desk set up in the office of her grandmother’s secretary. Perhaps this might be easier for a fifth-generation descendant of C. J. Root, who designed and manufactured the original Coca-Cola bottle.²⁷ But every next-generation member can find a few practical ways to get an exposure to their family business. Bill Rumpke Jr., for example, a second-generation family member and now the chief operating officer of Rumpke Waste and Recycling company,²⁸ insists that while the younger people in his family were not pressured to join the family business, interested juniors could get a job in the company sweeping floors even in grades six or seven, and they could ride the trucks with their fathers at an even younger age. As they grew older, if they expressed a keen interest in working they could get a truck from the company and the right to represent Rumpke in a certain area. They had to share part of the revenues generated from garbage collection with the company but got to keep the remainder for themselves. Not only did this motivate them to work harder, but it also taught them the value of money and how to deal with customers. While each route owner started by driving one truck and hauling garbage himself, over time as he picked up new customers, he could hire a driver and get a second truck, thereby growing the business by starting something new (route) and learning to manage or lead an employee.

It is in these less scripted parts and uncharted territories that entrepreneurial opportunities are more likely to exist.

Regardless of whether members of the next generation eventually end up working within or beyond their family enterprise, such learning experiences are great opportunities to learn and build skills. It is easier to start getting work experience with smaller part-time jobs within the family business than getting outside employment. Parents and grandparents are often more comfortable with having the next-generation members work on a part-time basis in the company at a young age while still in school. Enterprising families make sure to pay market wages to all their employees, including the next-generation family members, to differentiate their role as the child or grandchild of the controlling family from their role as an employee. Often, nonfamily members serve as the immediate superiors of juniors. This helps next-generation members to build a work ethic, earn some money, understand the business at its core, get to know the employees, and learn how different parts of the business connect with the overall organization. It also signals to family and nonfamily members alike that the next generation is not afraid of hard work. Care is taken to treat the junior family member like any other employee, providing quality feedback and guidance.

Enterprising families make sure to pay market wages to all their employees, including the next-generation family members, to differentiate their role as the child or grandchild of the controlling family from their role as an employee.

In the most progressive families, seniors and juniors work together to develop a career plan to build the entrepreneurial leadership skills of each family member. Some next-generation members find it extremely helpful to work closely with their seniors who know the business. For example, Bill Berkeley, the great-grandson of the founder of the Tension Envelope Corporation established in 1886, worked his way up the sales ladder. Commenting on the seven years that he spent working full time for the company before becoming a CEO, he notes that it did not hurt to have two great mentors in his father and cousin.

“One of the great things was to learn from the ground up from people who had been there for a while,” he states, adding, “our sales and production are closely intertwined, and it was important to know both segments to get a broad view of the organization … I needed to know the business firsthand to truly understand it and to have credibility with our associates.”²⁹

Other members of the next generation believe they can learn better if they don’t have to carry the additional baggage that comes with being the owners’ son or daughter. “Get out there and grow” was the prevailing belief for James Fernley, a fifth-generation member of Fernley & Fernley Inc., an association management company founded in 1886. Although since age five he knew that he wanted to be part of his family business, after graduating from university he worked for a competitor “to understand business from another perspective.”³⁰ Members of his senior generation encouraged such work. Similarly, Jeremy Jacobs, the second-generation family member and chairman of Delaware North—a three-billion-dollar sports and entertainment company best known for TD Garden, the home of the Boston Bruins, made sure each of his three sons worked outside the company. Jerry Jacobs reported that when he and his brothers graduated from college, their father asked them to find their own jobs, as he wanted them to know what it was like to get and hold a job before coming to work for their family business. When they did join the family company, each had to work in a range of jobs in different divisions. When Jeremy relinquished the CEO title, the three brothers had long working experience outside and within the family company that had fully prepared them to take on the co-leadership roles.³¹

Learning by Creating

Next-generation family members have many opportunities to watch and talk to entrepreneurs within their familial networks. Some of them may have started new ventures, expanded the product or service lines, or taken their enterprise into new markets. Such proximity helps to build confidence to take on entrepreneurial activities.³² But the story of success is mixed. While some next-generation family members do extremely well in building on the work of previous generations or starting new entrepreneurial ventures outside their family business, others face failures and frustrations. The distinguishing factor is the ability to augment others’ experiences with one’s own. The only ones who thrive are those who supplement learning by observing and listening with learning by doing. The type of doing we discussed earlier is largely focused on building the leadership skills by understanding the workings of an existing company. By experiencing work life in a follower’s role and watching others give directions, juniors understand the feelings and motivations of employees in such positions. And over time, next-generation members may grow into supervisory or managerial positions, thus getting opportunities to practice delegation and getting work done through others. In this section, however, we focus on building entrepreneurial skills by creating something new.

To create something new, first one needs to come up with ideas. One of the ways to develop the skill of identifying opportunities for new products or services is by practicing on everyday experiences. Gary Green was working for his father’s real estate business in New York when he felt frustrated with the cleaning services companies that overcharged landlords and tenants while providing mediocre services. He believed that the business model of the commercial cleaning services, where workers were on contract, needed to be changed to an employee-based model that provided fair salaries and benefits to ensure motivation, reliability, and continuity of quality services. In 1992 he started his venture, First Quality Management, to provide cleaning services to the properties owned by his family, enabling significant savings for the company and improving the services. With continuous hard work and refinement of his new model, by 2004 his company was providing cleaning services to over 100 buildings. Over time, the company added services such as security, messenger, restoration, and painting and also changed its name to Alliance Building Services. Reflecting on his decision to launch a cleaning service business independently from his family’s real estate business, he notes that entrepreneurial ideas are born where “frustration meets execution.” That is, when one person finds something frustrating, quite possibly many others feel the same. So, finding solutions to everyday frustrations leads to new business opportunities. For example, think about the last few times you traveled anywhere. What aggravations could have been resolved with a new product or service? How about the last time that you ate out or went shopping or to a film, concert, or sporting event? What would have made that a better experience? Once people develop the habit of thinking this way, they see new possibilities emerging everywhere.

When it comes to new creation, a bias for action is needed, as evidenced by the experiences of entrepreneurial startups like Starbucks, Staples, Costco, and others that Lloyd Shefsky documents in Invent, Reinvent, & Thrive.³³ An action orientation calls for just enough thinking about solutions to devise something that can actually be tried so as to get quick feedback from the users. It is also helpful to know what one can afford or is willing to lose—money, status, face, time—before giving up and trying something else. This is quite different from the “ready, aim, aim, aim, maybe fire” mind-set that some individuals may be inclined to take, spending enormous time to develop the presumably perfect foolproof plan³⁴ that never gets off the ground.

Stories of successful entrepreneurs are often sprinkled with a liberal dusting of small new initiatives since childhood. Examples may include small community projects like a lemonade stand or bake sale; or online sales and services or exchange of sports clothing or equipment, greeting or sports cards; or service ventures such as snow removal, gardening, dog walking, babysitting, or shopping for seniors. In any of these initiatives, there is a need to identify, acquire, and effectively use the human and financial resources needed to achieve an objective while creating something new that adds value to customers or clients. Adjustments will have to be made to ensure value is created and some unmet needs attended to. For next-generation members, such initiatives can focus on family or business. For example, in their quest to learn more about their family, particularly the extended family, some next-generation members of enterprising families take on a new project to document their genealogy or history. We have seen family members build strong networks by starting a family website that includes sections on family history, legacy, photographs, even YouTube videos. With the ease of availability of instruction and software programs to build genograms or family trees or history or websites, such projects are not only interesting, they also position the next-generation member in a desirable network node, while practicing entrepreneurial skills of starting something new and worthwhile. Over time, one can graduate from simpler ideas to more complex ones.

In the most progressive families, seniors and juniors work together to develop a career plan to build the entrepreneurial leadership skills of each family member.

The only ones who thrive are those who supplement learning by observing and listening with learning by doing.

At times, siblings or cousins may band together to co-create new initiatives under the rubric of their family business. For example, six eighteen- to thirty-five-year old cousins of the fourth generation of Australia’s Brown Brothers worked together, secretly from their parents and grandparents, to develop and launch two distinctive wine blends under a new brand, Kid You Not. While this renowned family-owned wine company has been known for its traditional wines since 1889, with a history going as far back as 1860, the new wines developed by juniors aimed to meet the needs of their age group.³⁵ They had a lot of fun developing their concept and implementing their ideas, while getting to know each other in a uniquely intimate yet professional manner. Developing their entrepreneurial skills together enhanced their understanding of each other and enabled them to gain the respect of their senior family members as well as nonfamily executives.

Engaging Personal Advisors

In addition to continuous learning, enterprising family members often virtually create a “Personal Advisory Board” that is committed to their growth and guidance. Experienced family or nonfamily members may be placed in such advisory positions for juniors. Senior family members—whether in or out of the business—who can understand different points of views prevalent in the family, friends, peers, faculty members from school, or professional peers from industry associations are some good sources of advisors. The best advisors are those who ask great questions that help the family member to reflect on possibilities, can anticipate potential trouble spots, are good at thinking up alternative methods of solving problems, and care enough about the individual to deliver hard messages when necessary. While such advisors need not come together for regular meetings, as is the case with boards in general, it is important to be in touch with them regularly so they can serve as sounding boards. Gary Green had Richard Branson, Warren Buffet, and his dad serve as advisors. In a lecture at his alma mater, the University of Vermont, he mentioned that he makes sure to meet with his advisors at least six times a year and encouraged the students to do the same with their trusted advisors. Advisors may change over time as life evolves and need not be famous to be helpful.

To illustrate how personal advisors can play a role in helping resolve the dilemmas of members of the next generation, we share a recent experience we had with a young Latina whom we met during her senior year at Babson College while planning a conference. “Rita Marquez”³⁶ did a superb job in this conference, gaining our high respect. After graduation, she was working in her family business and got very concerned about the unfolding dynamics among the family involved in the business. This included her parents (founders), brother (now CEO), and two sisters (one VP of sales living in the United States and one CEO of a division). Rita, youngest of the siblings, was herself the CEO of another division in another Central American country, a stretch job for her since she was a recent graduate and the youngest in the business. She reached out to us for advice, which we were eager to provide given the regard we had for her. Here’s how she described the problem:

All my brothers and sisters involved in the family business will be in [our home country] this weekend. Thus, I wanted to use this opportunity to have a family meeting as there have been many unresolved problems that need to be fixed. However, I need advice in how to guide the process in order to make it a proactive session instead of a session where feelings will be hurt.

We asked her to provide some more details about her family, the business, and their current dilemma. Here is what she shared with us:

• My family never talks about problems; people don’t like to openly talk about their feelings.

• In December 2011, my dad transferred the baton as CEO to my brother. This decision had the support of all family members.

• My dad transferred the baton as we were pressuring him to pass it on. We were getting quotes from consultants. However, he did it without a consultant. Without telling anyone in the company, in his speech at the Christmas dinner he passed the baton over to my brother “Hector.”

• My brother has implemented new projects that have allowed the company to maintain sustained growth in a very rough economy.

• My father remained in the company as legal advisor/supervising stores/public relations.

• In 2013, Hector was diagnosed with very delicate health issues.

• Hector is actively involved with many charitable organizations (as chapter president in some cases). This has forced my mother and my father to get more involved in the business and the power has changed again towards the founders.

• Currently my mother’s and my dad’s health have declined due to stress and pressure. They complain about my brother’s absence and the workload they are carrying, as he is not focusing on the business, as he should.

• On the other hand, my brother complains about my parents doing things without his consent.

I have called a three-hour family meeting on Sunday. I need to create a dynamic that will allow me to reveal these problems without talking about it directly. I need to trust the process, but I have no idea what dynamic to create. Or how to go about it? HELP SOS.

A long telephone conversation with Rita was enough to help her think through the way she wanted to approach the meeting and bolster her confidence to proceed. The challenge of getting things on the table without talking about it directly sounds almost impossible (although not terribly unusual), yet she reported great progress. Here is the agenda she created (only indirectly based on any advice she got from us):

Agenda:

1. Life Box: Where are people at in their life? Where do they want to go? Are you happy where you are?

2. Business Box: What are we giving in the business? What does the business need from each one of us?

3. Possible scenarios?

4. What are our takeaways?

With a few rules:

1. No cellphones

2. If someone gives his or her opinion, you can’t answer with your point of view. First you must ask three questions.

3. No interruptions

Rita reported the following positive agreements coming out of the meeting:

1. Quantitative evaluations for family members (a completely new idea, embraced by all).

a. Board meetings for Division 1 (even months)

b. Board meetings for Division 2 (odd months)

2. We must be headhunters.

a. Creation of an in-company program that allows employees to grow inside the company (star project)

b. Developing managers who are leaders

c. Evaluations of all managers

d. Internship program (structured, paid)

3. Be in continuous improvement.

a. Intradepartmental Quality Circles

4. Boosting growth in private label for the two major product areas.

Three months later Rita reported:

Last week, we had our first board meeting after the intervention. All the family members presented their quantitative evaluations. I think it was a great start because it helped us to focus on the priorities the company is expecting of us, and we could see the improvements immediately. From this experience I would encourage all family businesses to be more quantitative with their family members’ evaluations, and actually have evaluations.

A recent update from Rita was even more encouraging. The overall business was thriving, and she personally was growing and doing very well.

Such positive results are definitely not guaranteed every time, and we have to acknowledge that this enterprising family is remarkable for moving rapidly to a way of creating objective data that would enable more authentic conversation. And they are remarkable not only for allowing a recent graduate to be the CEO of a small division as a stretch learning experience but also being for being willing to follow her lead in this family meeting. But we offer it as an example of how asking someone who is trusted for advice can be very useful, even if the specific advice is not exactly followed. Talking about it, asking questions, and listening to the reactions can help anyone sort out the tangled emotions and come up with an action plan that fits the family’s culture.

Part of how the next-generation members can build entrepreneurial leadership skills, including how to create a vision, get people aligned behind it, manage the trade-offs among diverse points of view and between risk and reward, short-term and long-term, is by doing it. Rita Marquez in the previous example is doing exactly that by managing a new, small division in another country, being stretched all the time. And when she felt that her family could be getting itself into a conundrum, knowing our experiences with family enterprises, she was quick to reach out to us. Based on our discussions, she was able to lead the first family meeting for their family and get it on a positive track.

Some next-generation members may fall into the fundamental attribution error of blaming the situation. Instead of taking the initiative to build their entrepreneurial leadership skills, they may convince themselves that their parents don’t allow them to do this or that their family business is not set up to do that. But the most enterprising ones create appropriate learning challenges out of any assignment they are working on. Remember Henry Ford’s remark: “Whether you think you can, or think you can’t, you are probably right.” The son of a farmer from Dearborn, Michigan, although Ford did not invent the automobile or the assembly line, through persistent trial-and-error he was able to shape transportation and manufacturing in the twentieth century. Following the mantra of not finding faults but remedies instead, he persevered to find solutions that worked. As a young boy he organized other boys to build rudimentary steam engines and water wheels—an early form of leading others. As he got older he took on demanding and perhaps undesirable jobs such as working as a night engineer at the Edison Electric Illuminating Company—not because he knew much about electricity but he saw it as an opportunity to learn new skills. Over time, he became good friends with his role model, Thomas Edison. Being fired from his first job and failing in the first two companies he formed, in hindsight, seem to have added to building his entrepreneurial leadership skills. You can too!

The next-generation members can build entrepreneurial leadership skills, including how to create a vision, get people aligned behind it, manage the trade-offs among diverse points of view, between risk and reward, short-term and long-term … by doing it.

Using the following work sheet for yourself or other family members, assess strengths related to each of the five forms of learning discussed in this chapter, and identify some things to work and improve upon. Develop a meaningful, measurable action plan so that the practice of building entrepreneurial skills can be part of your routine.

WORK SHEET 2

Assessment and Action Plan to Develop Entrepreneurial

Leadership Skills of ____________________________ (name)

Action Plan: Develop a measurable action plan of what

____________________________ would like to accomplish: