Lausanne, Switzerland (GenevaLunch) - “Families have this idea they are different – they see themselves as unique. In our early years we said to them right away, ‘No, you’re not different!’ and they had a tough time accepting that,” laughs Joachim Schwass, co-director of business school IMD’s Family Business Center in Lausanne. As a result IMD has developed a popular and effective set of modules to help some of the world’s top family businesses see in what ways they truly are unique and in what ways they resemble every other family business on the planet. Once they reach this point they are better able to focus on securing the future of the business and the role of the family, says Schwass.

Starting Saturday 21 June, 37 family business students will test that theory in Lausanne. They are the latest group to attend IMD’s “Leading the Family Business” stream, a week-long set of classes and meetings. Some will also participate in the “Orchestrating Winning Performance” programme, a global business programme for executives and one of the reasons IMD was named one of the world’s top schools for executive education in 2008 by the Financial Times.

The families represent 16 nationalities, including the USA, Peru, India, Scandinavia, Switzerland, Chile and Croatia, and the oldest family firm among them dates back to before 1800.

If the idea of taking your family to school sounds odd at first,
Schwass says that families tend to discover they need help with the
business when the founder is about 50 years old and suddenly sees
that it’s not clear who will be running the company and how, once he or
she is gone. A good example is ISCAR, an Israeli metalworking business
whose founder Eitan Wertheimer, enrolled his family in the IMD
programme when he reached his fifties and realized his succession in
the company had not been organized. Wertheimer appeared with investor Warren Buffett
at IMD in May, under the aegis of the Family Business Program to talk
about how his family’s three generations are moving into the future.

IMD’s family programme is 20 years old in 2008, and the IMD-Lombard Odier Darier Hentsch Family Business Research Center was created in 1997.
”Globally leading family businesses are our market,” says Schwass,
pointing to winners of IMD’s annual family business award, sponsored by
Lombard Odier: they include Yazaki in Japan (2007) and companies from
Brazil, Canada, Peru, the Philippines, Spain and Italy’s Barilla in the
past four years.

These are not mom and pop shops, of course, but the problems they
face are similar to those of smaller family businesses. “Size is not an
issue, but it does add complexity.” The research centre at IMD has
helped provide a solid base of shared experience in the form of case
studies. “The research now is much richer than it was five to 10 years
ago,” Schwass says, “but underneath, the fundamental needs of a family
business have not changed because these are based on human issues,
values and behaviours. But because you’re involved in the business, as
the owner or family member or outside manager, you can’t necessarily
see these. I always say that the families just see the trees and we
help them see the forest.”

The first step is not necessarily an easy one, largely because
families often leave the question of who will carry on the business
rather late. “The next generation tends to want to rush in and grow the
business,” says Schwass, and that can cause friction – if the next
generation is even interested in carrying on, which is not always the
case. The founder or founding generation doesn’t always know how to
motivate and encourage the next generation. Families need to be able to
move from authority-directed learning to what Schwass calls “a kind of
consulting learning, where ‘I am the one who knows what I need to learn
and I’m asking your advice.’”

Whether or not a family has a business, making this transition is a
difficult task for each generation. “You’ve got built-in conflicts,” he
notes. And a business can complicate the process. “By definition, the
seniors know more than the juniors, but you have to find the meeting
point. This is where we’ve developed some meaningful models, patterns
that families can follow. It’s a fabulous benefit for a family to be
able to do this because it allows you to see where you are and to look
around the corner.”

Part 2 will appear Monday 23 June, “What a family business learns at school.”

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