I often discover that I don’t fully understand a subject until I write about it. It’s one of the things I love about my work: each article I write, each topic I cover, leaves me with a token gift.
This time around, I delved deeply into family firms. I spoke with our venerable faculty members who’ve studied the subject; I read Family Business magazine cover to cover. I learned about the surprising number of successful firms that have family at their core.
And why shouldn’t they? Whether the family owners more closely resemble the Coreleones or the Waltons, family is a source of pride for most people. This hit home for me when my father shared his Valentine’s Day gift from his wife: a gold ring with our family crest imprinted.
Perhaps pride is one of the intangible, un-quantifiable reasons that family firms have been proven so valuable. (Firms with an actively engaged family member outperform firms without one.) By all accounts, these business leaders are driven in part by their pride. When Bill Marriott opened his first JW Marriott hotel in 1984, he named the property after his father to honor the senior’s legacy. When Gert Boyle received a lowball offer for then-struggling Columbia Sportswear after her husband passed away, she rejected it, saying for that paltry amount of money, she’d run it into the ground herself.
But pride is a double-edged sword; there’s a reason it’s considered a cardinal sin. Pride might also contribute to the risk-return paradox. Overconfidence and framing issues have led to CEOs taking big risks without resulting returns. And I think columnist David Gage would agree pride definitely plays a role in partner conflict (see “The Social Network” if you disagree).
I am guilty of pride. This issue of the magazine might well be my favorite, and our most challenging issue. Corporate governance is a large umbrella, and we took care to tackle a myriad of topics under it: diversity in board leadership, sustainability (strategy and execution), executive compensation. We even traveled to Russia—and the cloud.
I hope you enjoy it as much as I do.