Instead of figuring out where COOs can fit in the current set-up of the family firm, it is best to discover the passion of each of the COOs. One must not forget that it was/is the passion of the founding family members that started and is growing the enterprise. Instead of simple blood ties, it was/is the founders’ values that influenced the choice of opportunities to be seized.
But how do founders know that the enterprise is their passion? First is the discovery of a personal vision that could be attained via the enterprise. Second is the discovery of the values his/her elders have been trying to inculcate and thereafter live by them and serve as guide for moments of truth or when decisions have to be made.
Thus, COOs must first discover their own personal vision, which is the platform for discovering and understanding what can make them passionate. This is essential to become a successful entrepreneur. This is part of self-mastery along with situation mastery and enterprise mastery (the three masteries required to become a master entrepreneur in the ME program of AIM’s Center for Entrepreneurship).
There should be activities and structures in the family that will allow the personal discovery of family values such as reward and recognition schemes for their practice. However, every family will have their own sets of values and, therefore, there is no such thing as right or wrong values in this situation.
What the family deems as the correct family values is simply the correct values. The consistency of practice becomes the ultimate test since values are what people live by. Moreover, they do not change over time nor circumstance.
Once COOs discover their passion, they must move on to create enterprises that are consistent with it. Financial support should be extended to passionate COOs’ enterprises that are consistent with the family values. Under this formula, family wealth will surely grow without the usually attendant family succession issues. The original family firm will just be the source of capital for COOs’ ventures. If no COOs are interested in the family enterprise, then it can get CEOs who share the family values and have the competence to deliver plus the passion for the work. After all, it is passion that will fuel the growth of the enterprises (financial growth being but its consequence).
But it is not sufficient to just get warm bodies for their competence. While this happens to be the usual case, this approach has been proven wrong or even disastrous. CEOs must share the family values and be passionate in what they are doing. This formula has always worked in consistently growing family enterprises.
Enterprising families should have a deliberate process that allows the screening of CEOs who share the family values. There should be an observation and mentoring process that allows a family member to discover the values of the CEOs and to discern their congruence with that of the family when it comes to decision-making.
Therefore, enterprising families should have a deliberate process that allows CEOs to know what the family values are and, if this does not conform to their set of values, how to best exit from the enterprise. Likewise, there should be a deliberate process to discover the passion of their key CEOs. Again, it is this passion that will grow the enterprise. If the CEOs are passionate about their work, it will be done in an excellent manner. Then too, a process that will allow the family the personal vision of the CEOs must be in place.
Matching the tasks and responsibilities with the passion of the CEOs is a must. Of foremost importance to ensure the fit is putting in place a training program that shapes the CEOs’ competencies to the work requirements in the enterprise.
One such successful family whose enterprises passed the test of time over 150 years sustained the growth of the family wealth with more CEOs than COOs. They developed a human development program that not only improved the competencies of the CEOs but also inculcated values and allowed the discovery of personal visions and passions. However, this is not to say that an enterprising families with a good mix of visionary, passionate and values-driven COOs and CEOs cannot live even longer, perhaps even for 500 years. Why not?
(Alejandrino J. Ferreria is the dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: ace@aim.edu.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//:www.aim.edu.ph).