Leadership and

Interpersonal
Communication in
Family Business
By

Otis W. Baskin, Ph.D.

Professor, Pepperdine University
Associate, The Family Business Consulting
Group

The Challenge of
Leadership Development
and Succession

From Entrepreneur to Group Ownership

Less than 35% Survive to 2nd Generation

From Sibling Group to Family Branches

Less than 15% Survive to 3rd Generation

Leadership Challenges in
Succession Planning
1st
2nd
Generation Generation
Owner/Manag
ed
Entrepreneurs
hip
Unity of
decision-making

3rd
Generation

Sibling Owned Cousin Owned

Small

group of Family
owners
branches
Leadership
Multiple
conflict
owners
Return on
investment?

The #1 Challenge
for Leadership in
Family Business
Preserving the best of the
past while creating a
company that is able not only
to accept, but to initiate

CHANGE.

CHANGE IS
INEVITABLE
Only 40 % of the Fortune 500
companies of a decade ago
still exist today.

CHANGE IS
MASSIVE

Leaders in the automotive

industry in 1985 boasted a
defect rate 1.5 times better
than their competition.
Today you must beat the
competition by more than

CHANGE ALWAYS
SUPRISES US

1943I think theres a world market for

maybe five computers. Chairman, IBM

1949 Computers in the future will weigh

no more than 1.5 tons. Popular Mechanics

1984 640K ought to be enough for anybody

Bill Gates, Microsoft

The # 1 Reason Change

Initiatives Fail:

LEADERSHIP

The Incumbent Leader

Should take responsibility for creating and

maintaining a climate for change.
Challenge, encourage, and empower the next
generation while still in control.
Use vast experience to guide change not
resist it.
Believe the business can survive without
them.
Recognize that the next leaders job is to build
consensus around change and forge a team.

Leading Change in a
Family Business

Is Easier Because:

Smaller & more

entrepreneurial
Able to move faster
Few or no outside
shareholders
Owners have more
influence

Is Harder
Because:

Leaders have
longer tenure
Fear of offending
predecessor
Tradition
Difficult to have
another vision
when leader grows
up in current
culture

Which Leadership Style

is Best?
Project

Strategic
Resistance

Style

Directing

Expected
Job Cuts Involved
Not

Time Critical
Development
Goal
Culture Change
Innovative
Technical
Low

resistance

Family/Tea
m

Inexperienced
Lacks

Confidence
Limited
Competence

Coaching

Counseling

Respects

Leader
Skilled but needs
Development
Already

Motivated
Experienced
Technical Skills

ASSESSING THE
READINESS OF THOSE YOU
WOULD LEAD
Stakeholder
s
1.
2.
3.
4.

JRW
CHR
AVN
PCG

Active
Active
Resistance
Support

Passive

Passive

Resistance

Support

O
X

O
X

O
X
O

Source: Worley, Hitchin & Ross

Strategies for Different

Stakeholders

High

Terrorist

Champion

(isolate)

(expose & promote)

Influence
Casualty
(treat wounds)

Low

Critical Mass
Supporter
(encourage & recognize)

Supportiveness

High
Source: Bywater plc

Four Core Qualities of

Emotional
Fortitude
Authenticity
Self-awareness
Self-mastery
Humility
Bossidy and Charan, Execution: The Discipline of Getting Things Done, 2002

FIRO-B
Assessing Your Leadership
Tendencies and Preferences

FIRO-B:
Designed to Help You

Manage your behavior as a leader

Recognize sources of conflict

Recognize sources of stagnation

Acknowledge the contributions of all

members of your organization

What FIRO-B is NOT

A comprehensive personality test

An assessment of good or bad

behaviors

A measure of your ability

FIRO-B Measures Interpersonal

Needs

INCLUSION: The extent of contact

and prominence that a person seeks.

CONTROL: The extent of power or

dominance that a person seeks.

AFFECTION: The extent of

closeness that a person seeks

Measures How Much Needs are

Expressed and Wanted

EXPRESSED: The extent to which

a person will initiate the behavior.

WANTED: The extent to which a

person prefers to be the recipient
of the behavior.

Your Leadership Needs

and Expectations

Inclusion

Control

Affection

I make an effort I try to exert

to include
control and
others & join
influence.
groups.

I make an effort
to get close to
people &
express
feelings.

I want others to
include me &
invite me to
belong.

I want others to
act warmly
toward me &
share their
feelings.

I feel best
working in welldefined
situations with
clear
instructions.

If Your Strongest Needs

are for Inclusion
You will strive to be a leader who:

Focuses on fairness and involving your team

Integrates divergent interests
Gains legitimacy through endorsement and
consent
Enjoys serving and benefiting the common
welfare
Desires to have a noticeable impact
Likes to be viewed as a popular leader
Is gratified by public recognition

If Your Strongest Needs

are for Control
You will strive to be a leader who:

Focuses on the task to be accomplished

Meets deadlines
Provides structure and gives instructions
Sticks firmly to final decisions
Develops challenging goals
Gains legitimacy through task skill and
proficiency

If Your Strongest Needs

are for Affection
You will strive to be a leader who:

Focuses on developing human resources

Strives to increase and maintain
employee satisfaction
Encourages and supports others
Minimizes conflict
Gains legitimacy through personal
commitment and loyalty
Invites feedback - respects honest
communication

Teamwork

Groups of people banded together

to accomplish a shared goal

Complementary
Teams:

Strained Teams:

Some high
Expressed behaviors
rejected by low
Wanted needs

Some high Wanted

needs go unmet by
low Expressed
behaviors

Provide a means of
both getting things
done and meeting
social needs
Some high Wanted
needs matched with
some Expressed
behaviors

Initiator

The idea person: proposes

alternatives, encourages others to
share in the discussion
Inclusion (I)
High
(7-9)
eI

Control (C)

Affection (A)
High
(7-9)
eA

Energizer

Prods the team to act, insists on

covering the agenda
Inclusion (I)

Control (C)

High
(7-9)
eI

High
(7-9)
eC

Affection (A)

Opinion-Giver

Offers a belief/opinion on all issues,

benefit of past experiences,
independent from group and leader
Inclusion (I)

Control (C)

Low
(0-2)
wI

Low
(0-2)
wC

Affection (A)

Harmonizer

Strives to reconcile opposing

positions, agrees and complies with
group decisions
Inclusion (I)

Control (C)

Affection (A)
High
(7-9)
eA

High
(7-9)
wC

Consensus-Tester

Wants to build a close-knit team,

checks for agreement, brings closure,
confronts unacknowledged feelings
Inclusion (I)

Control (C)
High
(7-9)
eC

Affection (A)
High
(7-9)
eA

Task-Master

Tries to keep the team focused on

purpose and outcomes; business
before pleasure orientation
Inclusion (I)

Control (C)

Affection (A)

High
(7-9)
eC

Low
(0-2)
wA

Team/Leadership
Effectiveness
Inclusion
(I)
Do

I give others
enough space? (H)
Did

everyone get
an equal chance to
participate? (L)

Do

I expect others
to seek my input
do I ask for theirs?
(H)
Do

I meet with my
team often enough

Control (C) Affection

(A)
Do

I promote my
own ideas at the
expense of others?
(H)

Can

I intrude less
on others? (H)

Can

I support and
encourage others
more? (L)

Can

I be more
flexible and accept
ambiguity? (H)

Am

Why

Does

I allow team
members to set
priorities? (L)

am I resisting
independence or
real problem? (L)

Can

I too dependent
on feedback on my
work? (H)
my emotional
distance prevent me
from being seen as