COMMENTARY | COLUMNISTS | PEGGY EDDY

Down the Yellow Brick Road

Family Business Matters

At a recent conference for family-owned businesses, several family members presented their own case studies for audience feedback. Part way through one presentation, the founder’s daughter threw up her hands and declared “I feel like a character in ‘The Wizard of Oz,’ only I don’t know which one!”

Her incongruous statement made me think about the yellow brick road and the wonderful characters L. Frank Baum created in this childhood classic. In going through the list of Oz characters, I was struck by how much some families in business actually have similar “cast members” in the family who are impacted by the family enterprise.

There usually is a Dorothy, a sweet and idealistic family member who lives in the present and doesn’t worry much about the future. The Dorothy in a family business can be an in-law, sister, daughter or wife who usually doesn’t work in the business and always assures family members that everything will turn out just fine, even if cyclones hit, generating family discord and seemingly insurmountable challenges.

Next, I thought about the Scarecrow, whose greatest wish was to get himself brains. Normally one family member who has worked for years in the business feels a bit intimidated by the cousin or sibling who comes into the business from another career.

It’s great that other family members can contribute their outside experience, but the family member who has long been in the trenches of the family firm undoubtedly has helpful perspective and almost intuitively understands the pulse of the business. Whoever plays the part of the Scarecrow in the family enterprise shouldn’t feel unintelligent or unresourceful — they are. And, like the Scarecrow, they just may become the ruler of Emerald City when the Wizard retires!

Let’s talk next about the Tin Woodsman, who wants a heart from the Wizard of Oz. The family Tin Woodsman often displays little or no emotion at the office or at board meetings. However, if asked privately about the family legacy and what the business means to them, this family member may be surprisingly sensitive and emotional. They just don’t wear their heart on their sleeve. In addition, their shyness may prevent them from being more emotional.

However, sensitivity gives this family member the ability to manage a department or motivate a team of employees to work toward a common business goal. Often a Tin Woodsman in the family business does an excellent job negotiating leases or equipment purchases, while keeping the family’s values close to his heart.

One of my favorite characters is the Cowardly Lion, who seems to be afraid of his own shadow. When he encounters Dorothy, Toto, Scarecrow and Tin Woodsman in the forest, he claims to be a coward and wants the Wizard to give him courage. The family member who plays this part may think they lack courage, but when the family business is threatened or a family member’s health fails, it may be this family member who rises to the occasion and proves himself courageous in times of need.

Then there is the Wizard of Oz. This character accidentally ended up in the Land of Oz and was assumed to be a powerful sorcerer by the Munchkins who lived there. The Wizard went along with their illusion and helped them build the Emerald City.

Normally, the Wizard is depicted as a humbug that Dorothy and her friends unmasked after they successfully killed the Wicked Witch of the West as the Wizard had directed. In a family owned business, the Wizard can be the founder of the enterprise who may have built up a reputation as a powerful person with a fair amount of bluster and fuss.

There also maybe the illusion that the Wizard-founder has all of the answers. However, once one spends some time with a founder who is heading into his or her golden years, usually it is apparent that the founder is just an ordinary human being who had extraordinary vision and energy to create the business.

Now in his or her 70’s, energy may be flagging and just perhaps he or she regrets pouring so much time and money into the business at the expense of having a better relationship with a spouse or children. In many ways, the founder of the family business is like the Wizard as he or she tries to help the next generation with all of their wishes; however, Next Gen members have skill sets that the founder may not possess and perhaps they will run the business even better than the Wizard!

Although there are many other characters in the Wizard of Oz, the one most quoted and remembered is the Wicked Witch of the West. No doubt some clients might have given me that title as I nag, cajole, urge and beg them over many years to work on their succession planning!

Invariably, there is one family member who is overbearing and resentful of any advice which is considered an intrusion from family members or advisers. Similar to how the Wicked Witch of the West coveted Dorothy’s magic red slippers, this family member clings to the illusion that there is some magic power held by another family member that makes their job easier in the business.

Unfortunately, it is impossible to convince this family member that it is really everyone working hard that makes the business successful. Even throwing a pail of water on this family member will not cause the family’s Wicked Witch of the West to melt away. Many times, it takes terminating this family member to break the spell!

I recognize that members of a business-owning family can be cast in different roles found in various books, movies and plays. However, the elements of optimism, brains, heart and courage exemplified by Baum’s characters skipping down the Yellow Brick Road best represent the components of real success that every family in business should seek.

Is your family business going down the Yellow Brick Road or is it “Somewhere over the Rainbow”?

Eddy, CFP, is president of San Diego-based Creative Capital Management Inc. and co-founder of the Family Business Forum at USD. She can be reached at peggy.eddy@sddt.com. Comments may be published as Letters to the Editor.

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