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Ever wonder on why so many fictional dramas center on the machinations and personality conflicts of a family business?
This story first appeared in the July 21, 2008 issue of WWD. Subscribe Today.
Probably not. Even the most casual newspaper reader has scanned front-page headlines of spats among the powers that be in family-run companies—squabbles that have surely inspired dramatic gold for Hollywood screenwriters on shows from 1980s classics like “Dynasty” to prime-time hits du jour like “Dirty Sexy Money”. For more than a year, Viacom chairman Sumner M. Redstone’s acrimony with daughter (and once clear-successor) Shari has been consistent fodder for the business journalists. Even the world of sweets is not immune: Observers say the $23 billion proposed sale of candy maker Wm. Wrigley Junior Co. to rival Mars Inc. may be the only way to ease long-held tensions between majority shareholder and former CEO William Wrigley Jr. and other family members angered by his autocratic control of the company.
“By the time family issues hit the press, it’s usually too polarized, unless you have people who are willing to come to the table,” says family business consultant David Bork. “If you don’t have fundamental, mutual respect, you’re finished.”
For family companies that haven’t quite reached such impasses, Bork has long been a go-to mediator, from apparel retailers like Mitchells to multibilliondollar conglomerates like Koç Holding, the Turkish company with subsidiaries in automobiles, appliances and other industries. These days Bork can more often be found on the seat of a titanium frame bicycle than a boardroom chair, though the 71-year-old Colorado resident has racked up more than 400 businesses as clients since 1970—largely before there was any literature on the psychology of family-as-business entrepreneurs. “There were very few people who consulted in family practice. David was really it,” says Leslie Dashew, a partner in the Aspen Family Business Group that Bork founded in 1990. “He’s perceived by our clients as our most trusted adviser, whether he is working for one of the top 10 family businesses or a small [client]. He’s comfortable in any setting.”
Whether it’s a luxury retailer or a real estate group, family businesses inevitably encounter similar challenges. A father’s unfounded favoritism for a particular child, a daughter’s habit of delegating hot-button issues to her parents, even if she is supposed to be running the business herself: Bork asserts that these problems cannot be solved until the dynamics of family relationships are first addressed. Where some turn to lawyers, he turns to psychology.
Jack, Mitchells’ CEO, and Bill, its vice chairman, who first hired Bork back in 1985, approached their business with different skill sets and contrasting personalities. “There’s a reason why people refer to Bill as Mr. Westport,” Bork says. “He’s gregarious. He’s the glad-hand guy. Jack is the details guy, the inveterate consensus builder within the family. The dynamics of your relationships will play themselves out in business … and you can imply that’s what happened to Jack and Bill.”
Both, however, were committed to equal opportunity for their children. The Mitchells first had to address the interpersonal dynamics of their working relationship. To do this, Bork took Jack and Bill out of the store setting and off to a golf resort in Florida (they did not play golf, however). “It was the first of several critical ‘off-store’ meetings that helped Bill and I learn more about each other and develop a new level of mutual respect and trust with David’s insights,” Jack Mitchell says.
Working with the Mitchells over the years, Bork has implemented many of his core principles. To an outsider, some may seem like no-brainers: Two family members struggling with a conflict shouldr esolve their problem directly rather than roping in a third party to gossip and vent. Oral decisions on employment policy should always be put in legally binding writing. Once you forge an agreement, stick to your plan.
Other principles can be harder to swallow. For instance, no family member is automatically entitled to a position. Bork recommends that all prospective employees work outside of the company for three to five years in order to prove themselves. In some family situations, he also advises that sons or daughters should have been promoted at least twice in their outside jobs in order to be considered for positions within the family business.
As a result, children in a family business know they have earned the job through their own merits. Otherwise, younger generations often struggle to have their input recognized by family elders. “The top three things that motivate individuals are that they are recognized, that they can give input, and that the work is intrinsically interesting,” Bork says, citing the work of the psychologist Frederick Herzberg. “If you employ a competent person who isn’t recognized and not asked for their opinion, you have an employee and a family member who’s unhappy and bored.”
In addition to a firm’s executive structure, Bork recommends a “Family Business Forum,” where members are educated about the company, children are groomed to become effective managers and the issues of family life are addressed separate from the business.
Not all who seek Bork’s expertise are a match. Bork interviews prospective clients, looking for cases that may be chaotic but portend at least a “neutral or a favorable climate” for change. Before diving in, he schedules a preliminary seminar in which he gives family members a collection of exercises. Bork then studies the interactions and identifies who in the family dominates, who clarifies statements of others and who initiates discussion. If utter dysfunction rules, he is blunt with the family— even an unnamed, high-powered one who once sought his services, Bork says. “When I told the father that I didn’t want to work with them, he asked why. I said, ‘I’ve been watching you all day. You don’t listen to anyone. Your wife, your children, even me. It would be a waste of your money and a waste of my time.’”
But when the fit is right, the money spent for consulting is hardly a waste, Bork asserts. “If you grow to feel good about your dad, and you get the chance to work with your dad, what could be better?”