Building Family Business Champions
Eric G. Flamholtz and Yvonne Randle


Contents and Abstracts
1 A Framework for Building Family Business Champions
chapter abstract

This chapter introduces and defines the concept of a "family business champion." It presents and describes the family business "success formula" that is based upon effective management of two dimensions: organizational development and family functionality. A framework for understanding and managing the first dimension –the Pyramid of Organizational Development – is presented and discussed. This is followed by the description of a six- factor framework for managing family functionality. The chapter includes two self-scoring tools ("Organizational Development Assessment Questionnaire" and "Family Functionality Assessment Questionnaire") that can be used to assess these dimensions. It also presents a typology of family businesses, based on their level of family functionality and organization development. The evolution of Bell Carter Foods, a successful family business for four generations, is examined for insights on how to build family business champions.

2 The Evolution of Family Businesses
chapter abstract

This chapter describes the nature of family business transitions and presents a life-cycle model of family business growth. The model is intended to serve family business leaders and their advisors by providing a conceptual framework for understanding the different stages of family business growth as well as the key issues that are typically encountered at each stage. The model's value results from providing a conceptual "road map" for the development of family businesses. The chapter identifies four types of family businesses that can exist at any stage of organizational development – based on the level of family functionality and degree of organizational development: superstars, high potentials, sinking ships, and feuding families. It provides a typology that can be used to identify the family business type of a company – using the results of the Organizational Development and Degree of Family Functionality Questionnaires presented in chapter 1.

3 Strategic Planning
chapter abstract

This chapter describes how to create family business strategic plans that strike the right balance between family and business needs – what is referred to in this chapter and those that follow as "creating family business equilibrium." The chapter deals with both the "technical" issues of strategic planning as well as the family issues. It presents a six step approach for developing the family business strategic plans and provides recommendations for implementing each step. Case examples from family businesses are used to illustrate the implementation and deliverable of each step. This chapter provides a methodology for strategic planning for family businesses of all sizes (not just large companies) to help them become champions. A set of questions included in the book's appendix can be used to assess the extent to which a company has an effective family business strategic planning process.

4 Organizational Structure and Roles
chapter abstract

This chapter provides a framework for the design and use of organizational structures in family business. As with planning, there is a need to find the "right" equilibrium – that is, strike the right balance – between the family needs and the business needs when developing and implementing organizational structure in family businesses. The chapter examines some "basics" of and tools for designing and managing structure – including selecting the "best" overall structure and a specific approach to developing effective role descriptions. It then discusses some of the different types of family issues that can undermine effective structure design. A set of questions included in the book's appendix can be used to assess the extent to which family business leaders have developed and are effectively managing their company's structure.

5 Performance Management
chapter abstract

This chapter examines performance management in family businesses from the perspective of creating family business equilibrium – that is, the right balance between family and business needs. It examines both the technical aspects of performance management per se and the special challenges and issues of performance management in family business. The six components of an effective performance management system are described, along with the family issues that need to be addressed in designing and implementing each component. Key performance management issues in family business are identified and discussed. A set of questions (based on the concepts presented in the chapter) that can be used to assess the extent to which a family business has designed and implemented effective performance management systems is presented in the book's appendix.

6 Culture Management
chapter abstract

This chapter describes a framework for the management of corporate culture in a family business. It provides the concepts and tools required to help create and manage a functional family business culture. It defines the concept of organizational culture, and identifies the key dimensions of culture. It discusses the critical role of culture in business and family business, the tools of culture management, and the special problems of managing culture in a family business. It also examines selected actual cases of corporate culture and culture management – both functional and dysfunctional – in family business. A set of questions (based on the concepts presented in this chapter) that can be used to assess the effectiveness of a company's culture and culture management process are presented in the book's Appendix.

7 The Dark Side
chapter abstract

This chapter deals with the negative aspects of family dynamics in a family business. It identifies and explains each of ten dysfunctional syndromes that commonly occur in family businesses and, as such, provides a framework that can be used to identify whether a family business is experiencing any of these problems. The underlying causes of each of these syndromes relate to one or more of six factors (described in Chapter 1) that must be managed to promote a high degree of family functionality: treatment of family members, treatment of non-family members, expectations of performance and accountability within the family, family rewards and recognition, willingness of the family to learn and change, and family and company leadership. For each syndrome, case examples to illustrate what it looks like in practice and suggestions for overcoming it are also provided.

8 Leadership
chapter abstract

This chapter provides basic concepts, ideas, and research findings concerning leadership of family businesses. It presents a framework for success that draws upon leadership research as well as first-hand observation of family business leaders in actual organizations, illustrated by a series of case studies.

9 Succession
chapter abstract

This chapter examines leadership succession in family business from the perspective of creating or sustaining family business equilibrium–balancing the needs of the business with the needs of the family. It identifies key factors that must be considered and proposes a systematic process to facilitate family business succession. It also examines selected cases of family business succession in order to gain insights into the lessons that can be derived. The chapter argues that leadership succession is the most crucial issue a family business must face to support continued success. The chapter also argues that when done effectively, leadership succession keeps a successful family business on the path to becoming a family business champion. When done ineffectively, it can quickly destroy a family business that was painstakingly built during a lifetime of work.

10 Lessons Learned
chapter abstract

The concluding chapter identifies seven key lessons. The key to creating a family business champion is treating the business as a business and the family as the family. Successful family businesses are able to create and sustain family business equilibrium over the long term. A functional family is a prerequisite to a successful family business. Managerial tools must take into account the family situation and level of family functionality. There is a common set of attributes of all sustainably successful family businesses: strong business and family business foundations; an "infrastructure" that supports current and anticipated future operations; and a high level of family functionality. Two key variables account for family business success: a high degree of family functionality and organizational development. As a company grows in size, a more systematic, formalized system of management is required.