"Clan Management" - when the circle of shareholders grows.
From the research workshop. The increasing acceptance of egalitarian forms of inheritance of shareholder shares has led in recent decades to the emergence of large shareholder groups of equal descent. How it is possible to succeed in attracting entrepreneurial families of this size to the company and to organize them as strategic and decision-making units.
There's this rough rule of thumb: The number of shareholders of a family business triples per generation. In these family types not only the reproduction rate is disproportionately high compared to the general average. In addition, a trend towards an egalitarian inheritance of shares to all descendants in equal shares can be observed more and more often - regardless of whether they work in the company or not. In combination, this leads to a steady growth of the circle of shareholders with each generation transition.
Initial random investigations have shown that there are already at least 30 large shareholder groups with 80 or more shareholders in Germany. Due to the wave of inheritance, this number will rise sharply in the coming years. More and more often, clans of entrepreneurial families - social units composed of persons of equal descent - are formed, forming an economic and solidarity community.
What distinguishes this type from other entrepreneurial families? Are there really differences between a group of 15 to 50 family members or 2300, as in the case of the Belgian Solvay family? What typical questions arise in these clans? Initial findings from current research projects show that various problem complexes can be worked out that require specific solutions within the framework of "clan management".
First and foremost, it is about the organisation of commitment and cohesion. Family leaders must ask themselves in what form this is still possible with members scattered across the globe, some of whom have different mother tongues.
Is a family reunion that takes place every two years sufficient to enable mutual acquaintance and to preserve the much invoked "family spirit" in everyone's consciousness? What must happen so that not only a fraction of the community - the representatives of the remaining family members - participates in the shareholders' meeting and informs themselves about the course of business?
The representatives often tell us that the motivation to become actively involved in the family business is declining or even non-existent in large parts of the family. An example of this trend may be the answer given by a sixth-generation shareholder to an invitation to the company's anniversary: "I've already attended the shareholders' meeting. Now I should also spend a second day for the family business this year? That's just too much."
This declining basic motivation can be explained as the result of decades of successful patriarchal decision-making and organisational structures in previous generations. This success has a downside: the non-active shareholders, who were not elected to a supervisory or advisory body, are trapped in a "learning trap" - they have either settled in comfortably with the work being done elsewhere, or they feel discouraged in their commitment.
In the past, there were often no opportunities for interested family shareholders to get involved elsewhere in the company or in family cohesion. Thus the thirst for knowledge was slowly lost and only the descendants - if at all - of family members who had formerly worked for the family business in management positions or had been active in supervisory bodies participated.
Those who contribute to the company often remain among themselves as representatives of the extended family. The exchange into the breadth of the clan is lost. Observable attempts in recent years to revive communication within the clans via specially created intranet solutions for the clan have had little success.Although Sie promotes the chances of finding out about developments in the company and family through clicks and downloads, a lasting increase in loyalty via "family chats" is usually not possible.
Here, solutions are required that pick up individual family members in their reality of life and at the same time are so attractive that regular use of this medium is perceived as attractive and enriching.
At the same time, the question must be asked which interest within a clan leads to commitment to the common good. If the sense of belonging to a larger unit can (again) be felt succinctly, this is often accompanied by a fulfilment of meaning. This then leads to a similarly strong commitment and motivation for the family community as is known from charitable or association work.
Clan management in this context therefore means much more than an improved "service", a "one-way communication" of expectations, information and messages from the committees into the "mass" of family members.
Well-functioning communication within the clan creates personal and digital communicative spaces beyond an "ego-push logic".
However, this requires a steadily increasing involvement of interested family members. Uns show that active and interactive communication within the clan community takes about five to ten years of active family management. Similar to adult education, this has the character of an "enabling didactics". Of course, a number of motivational setbacks can also be expected, especially if the binding forces have been eroded for some time.
The management of an entrepreneurial family of the clan type thus requires in part completely different measures and contents than small shareholder families. Interactive communication within the clan plays the most important role in creating and maintaining loyalty and motivation. It carries information from the representatives of the family to the general public and at the same time takes up questions, feedback, wishes and needs in this social system.
The creation of opportunities to commit oneself to the company and the family is a second central task of clan management. All this requires the development of special capabilities so that the committees can be staffed by a few highly competent members from the respective clans. What these are and how they are conveyed is examined in the September issue of private wealth;
Authors: Prof. Dr. Tom A. Rüsen, Managing Director of the Witten Institute for Family Businesses (WIFU), Managing Director of the WIFU Foundation
Prof. Dr. Arist von Schlippe, Academic Director of the WIFU and Professor of Leadership and Dynamics in Family Enterprises at the University of Witten/Herdecke, Germany