About Josh Baron
Dr. Josh Baron is a co-founder and partner at Banyan Global. For over a decade, he has worked closely with families who own assets together, such as operating companies, family foundations, and family offices. He helps these families define their purpose as owners and establish the structures, strategies, and skills they need to accomplish their goals.
Before Banyan, he worked at Bain & Company and The Bridgespan Group. Baron teaches family business courses at Columbia Business School in the MBA, Executive MBA, and Executive Education programs. He publishes and speaks frequently on family enterprises and is a regular contributor to the Harvard Business Review, including “Why the 21st Century Will Belong to Family Businesses,” “Why Family Businesses Need to Find the Right Level of Conflict,” and “Every Business Owner Should Define What Success Looks Like.”
A graduate of the University of Pennsylvania, the University of Cambridge, and Columbia University, he is also the author of Great Power Peace and American Primacy: The Origins and Future of a New International Order.
The Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise
Though “family business” may sound like it refers only to mom-and-pop shops, businesses owned by families are among the most significant and numerous in the world. But surprisingly few resources exist to help navigate the unique challenges you face when you share the executive suite, financial statements, and holidays. How do you make the right decisions, critical to the long-term survival of any business, with the added challenge of having to do so within the context of a family?
The HBR Family Business Handbook brings you sophisticated guidance and practical advice from family business experts Josh Baron and Rob Lachenauer. Drawing on their decades-long experience working closely with a wide range of family businesses of all sizes around the world, the authors present proven methods and approaches for communicating effectively, managing conflict, building the right governance structures, and more.
In the HBR Family Business Handbook you’ll find:
- A new perspective on what makes family businesses succeed and fail
- A framework to help you make good decisions together
- Step-by-step guidance on managing change within your business family
- Key questions about wealth, unique to family businesses, that you can’t afford to ignore
- Assessments to help you determine where you are—and where you want to go
- Stories of real companies, from Marchesi Antinori to Radio Flyer
- Chapter summaries you can use to reinforce what you’ve learned
Keep this comprehensive guide with you to help you build, grow, and position your family business to thrive across generations.
HBR Handbooks provide ambitious professionals with the frameworks, advice, and tools they need to excel in their careers. With step-by-step guidance, time-honed best practices, and real-life stories, each comprehensive volume helps you to stand out from the pack—whatever your role.
You can feel the admiration and passion that the authors have for owners of family businesses throughout the newly released Family Business Handbook.
Family ownership brings more than the hunt for shareholder return; it brings passion, purpose, a sense of loyalty, and a feeling of connection and responsibility to the communities in which their businesses operate.
Debunking the commonly held belief that families go ‘from rags to riches and back again in three generations,’ Rob Lachenaur and Josh Baron, (both Partners at the leading international Family Advisory firm BanyanGlobal), show how family businesses outlive publicly traded ones, are more resilient in downturns and more prudent in upturns. Careful planning and decision-making have permitted many to pass on their firms and perpetuate multi-generational family enterprises. But it’s not easy and this book is a well-structured and insightful guide to help make this happen even more frequently.
The Handbook is written for family owners who through their curiosity, hard work, and adaptability, are set on making this unique and complex family-business system stay healthy over time. As the authors illustrate abundantly, there are so many small or large challenges that if not addressed in a timely, open, and consensual way can destabilize the owners and have a life-threatening impact on their businesses. The book is a guide to help navigate successfully through these challenges. As they state in the introduction “ownership brings the power to destroy your business or position it to thrive across generations.”
Their starting point is to lay out five critical rights that owners have. These five rights represent the uniqueness of family ownership. The five rights are based around:
- the design of the company and its ownership,
- how decisions get made and by whom,
- what objectives and goals the owners have and any constraints that might get in the way,
- what information gets shared with others, and
- how to pass on the assets and to whom.
For each of the five rights, they lay out its importance, give detailed alternatives and add pros and cons for each. The authors are not prescriptive, suggesting that there is no single right answer but prefer to offer a range of options for owners to think through, talk about and decide on. Not deciding, however, is in itself a choice that, they point out, frequently ‘scatters the seeds of destruction.’
This failure to engage on the difficult issues is wonderfully addressed in a later chapter on conflict resolution. Rather than state the obvious that conflict is bad, the authors actually propose that too little conflict can be equally harmful. Difficult conversations postponed between family members, a desire not to hurt a sibling, difficulties in bringing up tough parent-child (the child can be 55 years plus in age!) issues can lead to too low levels of conflict and as such a failure to address ‘the elephants in the room’.
Conflict becomes an issue when it gets out of control, often leading to a downward spiral. The ‘conflict spiral’ they describe would appear to be an interesting tool for families to keep in the top drawer of their desks and to bring out when differing interests appear that may lead to a hardening of positions and a proxy war which can then lead to non-family members being contracted and a legal case seems inevitable. Stop the slide is the advice. Nip it in the bud. Be open about differing interests. Recognise them. Look for commonalities and build from there.
The second half of the book details a series of questions unique to family business ownership that all owners will address at some point. These touch on a range of issues; facing unexpected challenges such as a sudden death or an errant family member, one or more owners being responsible for the family wealth, dealing with family conflict, bringing (or not) in-laws in to the system, family members working (or not) in the family business, servicing family needs outside the business, building a portfolio to last, preparing next generations to be responsible with wealth and more. Each chapter ends with a check list to allow easier recall of the key points.
The final chapter is designed to get the worry level up; ‘how to spot the signs things might be going wrong.’. It suggests there is a strong need to keep a check on how, as owners, you are adhering to the values handed down from previous owners and how distant you feel the ownership group is drifting from the business and their governance. Both can lead to poor decisions, often taken by others that accumulate over time and have a big negative impact.
At the end of the book is a simple one page survey tool for owners to run a quick ‘health check’ and help assess if there are areas that might require the owners to work together to revitalise or address for the first time.
As the authors state in the last paragraph; “Family businesses require a lot of work to sustain . . . but this work is a blessing. When the members do it well and do it together, it is exceptionally rewarding; connection to your family, personal growth . . . pride . . . closeness to loyal employees and an expression of your values in the larger community.”
In my opinion, this is the handbook for family business owners and an essential read, highlighting some of the pressures placed on families in business together, but with insights and suggestions as to how to start a conversation. Open and honest conversations are something that I refer to regularly and this book is a good place to start and will undoubtedly help many families in business realize the need to talk, discuss the challenges and find a way forward that works for them.
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