Inspired Leadership
*Article also appears in The Prouty Pulse.
According to Forbes, less than one percent of the 27 million companies in the United States are publicly traded. Among U.S. firms with 500 or more employees, 86.4 percent are privately held. While they might not grab the media headlines with regularity, private business is a driving force in our economy, in our communities, and in our country.
I took over as family leader of our now $5 billion-a-year construction enterprise in 2015. I did not at the time have an appreciation for the enormity of the responsibility or breadth of the unique challenges and exciting opportunities that lay in front of me. These are not things they teach you at business school.
For the last couple of years, I have had the privilege and pleasure of spending two and a half days with five other family member CEOs running closely held private businesses spanning from $500 million to $8 billion in revenue. This is a group of some of the most capable, ambitious, caring, and successful CEOs I’ve ever been around. They share having had a common hard-earned path to the position of ultimate responsibility by obtaining advanced degrees, gaining experience from the outside, and going through the rigors of structured and often long vetting processes.
I suppose we all recognize ultimately that leading the family business is not in fact the easy path, but we all recognize its very special privilege. We have all grown up around the family business and felt a connection to the work and the legacy of those who have toiled before us.
Unique Challenges
We are not just responsible for successfully operating our companies while we are CEO, we are responsible for perpetuating the business into future generations. That requires a special combination of building the connection and culture of the next generation, while at the same time creating an environment where non-family members and executives feel like owners too.
Our responsibilities to the communities in which we work and live are also unique, and the expectations to lean in and actively engage are enormous. Most public company leaders have a choice about how they engage. We do not; our names are often on our corporate buildings.
And while we have more flexibility around governance, we have the unique challenge of having mothers, uncles, sisters, and/or nephews around the boardroom table, most of whom are often deeply opinionated and unabashed. This requires a set of leadership skills that goes way beyond just a mastery of the business. You have to find a way to make family dynamics and business mix and mix well.
While all of us face many of the same unique challenges, I always came away from our time together inspired. Here are a few of the leadership qualities that I learned and admired.
Care and Passion
While no one is ever going to find success in any pursuit without passion, I must admit I was almost taken aback by the visceral intensity of these leaders’ deep passion for what they do and the enormity of care they bring to how they operate. Their mind, heart, and soul have a singularity of intensity that is a driving force. This determination to build something enduring and impactful is part of the secret sauce that has enabled their success.
Humility
When we first got together, I expected to encounter this group of third, fourth, and fifth generation leaders to be more like the quintessential big company CEO with an outsized presence, a large personality, and a desire to be center stage. But what I found is that they were a lot more like me than I expected—introverts and deep thinkers who are insatiably curious and more comfortable in small groups than on big stages. They knew that business success relied on having a great team, and they were more interested in highlighting the accomplishments of those around them.
Long Term Commitment
While it is certainly freeing to be able to think about business in terms of generations, today’s super charged world is filled with uncertainty, accelerating change, and multidimensional risks. Making big bets takes fortitude.
Researchers from Harvard and New York University found that privately held companies invest substantially more than do publicly traded companies of similar size and industries. Using private-company data from Sageworks, the researchers found that private firms, on average, invest nearly 7 percent of total assets each year, compared with only 4 percent investments for similar public firms. Big visions require big bets for the long term as well as enormous courage and patience.
As Vince Lombardi once said, “Heart power is the strength of your company.” These leaders had heart power like few others I have met.