Vision of leadership in family businesses. Een concreet instapmodel voor goede communicatie

6 February 2023

6 February 2023

Executive-level tensions

Within many family businesses, the question at the board level is how the company can remain entrepreneurial while continuing to professionalize with, among other things, more control mechanisms.

Especially when expanding the board of directors to include family members of the new generation or non-family directors, this question sometimes leads to tensions that occur mostly “underwater. Dirk Harm refined a concrete model of three leadership styles for running an organization. This model* is a possible starting point for an objective discussion between family and non-family members about the future of the business. Dirk Harm: “For family businesses, it can be a challenge to maintain the right balance between entrepreneurship, professionalism and caring. That balance is necessary to properly take the business to the next phase and/or the next generation.”

From clodding soccer to positional play

“I often show two recognizable images of soccer,” says Dirk Harm. “One of clodding soccer and one of positional play. It works as a nice opening to the conversation. Where are you now as a company? And where do you want to go? Do you eventually want to play in the Champions League and what does that mean? Clubbing doesn’t always work to move forward, but it shows enthusiasm, drive and vigor.

Position play is about having a common goal, explaining what the positions are, making agreements, trusting each other, giving each other responsibility, calling each other to account for consequences and the right man/woman in the right place. But does positional play produce more results? These are topics that are also very important in business and family businesses.”

Do we understand each other at all?

The model for managing an organization distinguishes three leadership styles:

  • the entrepreneurial
  • the professional
  • the caring leadership style

Every family business needs balance in the executive team in terms of these three leadership styles. This leadership model, according to Dirk Harm, is not a roadmap to resolving executive-level tensions, but it is a useful tool for better communication. “You can use this model to start the conversation about how board members view the family business and the leadership of fellow board members. How do board members think the family business should be managed? Why does anyone act the way they do? What leadership style does the family business need? The conversation about this leads to greater mutual understanding and recognition.”

The caring perspective

The caring leadership style is typical of family businesses. Dirk Harm: “In corporate companies you hardly encounter caring as an ideology. Non-family directors are also often not a good fit for the family business; they are people who have worked for years at a large corporate and look at the business from a different perspective. They steer by responsibilities and competencies rather than commitment and relationships. It’s really an eye opener for them that family members look at their family business from that caring perspective.

Conversely, for family members, the non-family director can appear very formal and bureaucratic. The family business is primarily not for profit but for continuity and sustainability. Everything is aimed at ensuring the survival of the company, the employees are connected to the family which, above all, must stay together in harmony. A family business looks at the long term, across generations. They also often look back to the past; employees who were once good for the company are kept on board, often against their better judgment.”

Judging each other transparently

Different leadership styles within a board can lead to misunderstanding or frustration. “By plotting each other on those three different leadership styles,” Dirk Harm explains, “you make it possible to discuss what the current executive team is like. How do you feel your fellow board members act on entrepreneurship, professionalism and caring? What do you base that on, and are there any concrete examples that illustrate it? Of course, when assessing the other person, you look through your own glasses; you always include your own perspective. For most people, one of the three leadership styles is dominant. In essence, none of the three leadership styles is the only right one, it’s just that a good balance has to be found.”

By making it clear how you see each other and naming the misunderstandings and frustrations, Dirk Harm says you get a transparent conversation about what the organization needs. “By becoming aware of the characteristics, qualities and pitfalls of the three different leadership styles, a new foundation and common language can emerge about the vision of desired leadership and the steps that lead to thriving and continuity in the family business.”

* The model refined by Dirk-Harm Eijssen is B. Johannisson’s 2000 model from the article “Recruiting outside board members in the small family business.”

Text: Esther Smid

Dirk-Harm Eijssen shared his story at the NGFB‘s inspiration meeting, a special afternoon with almost all NGFB members full of inspiration and professional knowledge exchange.