After 20 years in the corporate world, Cathy Carroll was asked to jump into her family business by her father. For most of her life, Cathy had decided to stay out of the family business because of what she had witnessed her father's generation go through.
The entrepreneurship of the Carroll family began with Cathy's grandfather. He built a successful business and when he died, the business was passed down in pieces to the next generation. Eventually, Cathy's father bought other companies and established a successful sports equipment manufacturing business.
Cathy's father had hired many of his friends into the company, which led to a fun and inviting environment for the business. However, the business began to lose money. In 2009, Cathy was asked by her father to serve as President and Chief Operating Officer for the business. Having received her MBA and showing great success in the corporate world, Cathy's father was hoping that she would turn around the company.
When asked about how she felt about the transition from corporate business to family business Cathy answered, "It was an interesting transition because I went from a mid-level executive at a $20 billion business to a senior executive at a $20 million business. It was a completely different power dynamic, which was an adjustment."
As she meshed into the business, changes started to happen quickly. New executives were hired, employees had a new sounding board, and profits started to increase. But, her father wasn't as comfortable with the change as Cathy was.
"My dad and I had very different default leadership styles. He was much more directive and I preferred to listen more to employees and make decisions that considered their perspectives," she said.
What Cathy acknowledges now is that she had stepped into her father's world of friends and changed the communication dynamic. "I had changed the way that his employees communicated with him; changes he wasn't comfortable with, " Cathy stated.
Shortly thereafter, Cathy's father stepped in and made some changes of his own. The lack of leadership alignment resulted in confusion, and after a frank conversation with her father about decision authority, Cathy chose to leave the company.
"One of the biggest myths in family business is that profit motive is the number one goal. I was brought into the company to make it profitable, and while doing so, I disrupted my father's relationships with his employees and friends. Communication changed, trust changed and it challenged my father's feelings of relevance to the company, which ultimately became more important to him than profits," Cathy said.
Now as an entrepreneur herself, Cathy created Legacy Onward, a leadership coaching firm serving family businesses. Based on what she experienced in her own family's business, she knew that she could bring some unique value to leadership coaching for families in business. In family businesses, each family member has a unique reason for being involved and sometimes those reasons don't align smoothly. Leadership in family business is emotional and so different than corporate leadership.
"Leadership in a family business is a unique challenge because it asks leaders to reconcile the opposing forces of socialism and capitalism. Families focus on fairness, equality, and caring for each other which tend towards socialism, whereas businesses focus on meritocracy, competition, and the bottom line which tend towards capitalism. The art of leadership in a family business is leading through this paradox to harness the benefits of both ideologies while mitigating their downside risks," Cathy said.
Communication is the key. "Ultimately, leadership is achieving results through others, and that manifests through effective communication. Many people are afraid of disrupting family harmony by having difficult conversations, but ironically, it is the avoidance of conflict that leads to family disharmony," Cathy advises.
Can you relate to Cathy's story or want to learn more about how you could add value to your family business leadership? We would love to hear from you!