George Malim is a freelance journalist specialising in technology and finance based in London. firstname.lastname@example.org
Courses addressing the educational needs of those working in family businesses are a relatively new development. Now a plethora of institutions offer some form of dedicated family business training. George Malim explores some of the programmes on offer
Despite the relative youth of family business as an academic discipline, recent years have seen the emergence of entire MBAs devoted to the subject area. These new courses, one of which is on offer at the University of Gloucestershire in the UK, for example, have only very recently become available and bring a wider choice to potential students by providing highly-targeted programmes. These programmes build on what has been achieved since the late 1980s when the first tentative steps were made to develop family business-oriented training. However, as a general rule of thumb, prestigious institutions such as Harvard Business School, Insead and the London Business School, offer family business programmes as elective modules forming part of a wider MBA.
Insead offers an elective course that is now in its eighth year and has seen 700–800 students graduate. "The whole field as an academic topic is fairly new," explains Professor Randel Carlock of Insead. "The subject was first taught 15 years ago at the University of St Thomas. At Insead we try to provide learning experiences and cover a lot of work on the family. It's usually not the business that presents the problem – it's the family and the interactions and relationships within it that generally are problematic."
Carlock asserts that the Insead elective focuses on governance, decision-making and leadership development. "This isn't typical," he said. "Our course is very much about hands-on experience as well as intellectualising the topic. We include exercises on coaching and communication, strategy and family planning, conflict and family relationships and family histories and genograms. We then try to pull it all together with guest speakers and real world case studies."
Another institution that offers a family business programme as an elective forming part of a 2-year MBA is IESE, which runs a course called 'Governance and management of family businesses', which was established in 1987. "We cover questions related to corporate governance and also family governance," said Professor Josef Tàpies, chair of family-owned business at IESE. "The topics we cover in detail are ownership management, succession planning, assembly and management of boards of directors, family assemblies and councils, and also the role of non-family managers."
IESE also runs open seminars on interpersonal relationships in family businesses. "We put emphasis on the personalities of those involved in the family business and explore how they can be directed," added Tàpies. "We also offer a lot of sessions for our alumni association and have offered three sessions in the last year. One of our recent successes has been hosting a day where our family business MBA students came here with their parents and they all discussed relevant business cases – this was a very practical exercise."
Carlock agrees: "It's very effective to have an executive programme and involve family members."
Other institutions take different approaches. For example, Loyola University Chicago offers two areas of family business offerings. For MBA students the University offers a course in 'Management of the family business' and next year will launch a family business concentration for MBA students. However, the University also offers a broad range of programmes for family business owners including a membership programme offering business-owning families the opportunity to participate in seminars and peer-learning. This helps them prepare for the challenges of generational transition. There is also a leadership development course called the 'Next generation leadership institute', designed to prepare next generation leaders aged 25-45 for the unique challenges they will face in leading their family businesses. In addition, Loyola offers a programme for 18-25 year olds designed to provide that generation with a foundation of knowledge to help them make a decision about whether to enter the family business. Loyola also offers programmes designed to help families run their family meetings more effectively and to help families increase their capacity to innovate.
Andrew Keyt, executive director of the Family Business Center at Loyola University Chicago, explains the benefits of short, targeted courses. "We do offer many short courses because they allow us to provide education in a format designed for the business owner and not the full-time student. Most family business owners can't afford the time away from their business for a full graduate programme," he said. "In addition we are able to bring real life examples into the classroom that aren't available with full time students.
There is a marked difference in approach between the providers of prestigious MBAs and institutions that provide targeted shorter courses. The prestigious organisations steadfastly regard family business programmes as just one of the many factors to be addressed in all-round business education while other institutions are more geared towards practical lessons for those already in business, as IESE's Tàpies explains. "We will never do a specific MBA in family business," he said. "Family business has to be one of the dimensions of a company. It's important because two-thirds of businesses in the developed world are family businesses but it is just one dimension. For MBA students, it's very valuable for them to have a framework that could help them run their families' business but it's equally valuable for them to have wider business skills to take to another company and promote themselves."
Carlock also finds the idea of flexible electives more appealing than a structured course. "If you are teaching accountancy you need a structured course," he said. "But, if you want to do family business in India, you need that specific individualisation. Study has to be self-designed."
The IESE and Insead electives are both practically oriented, however. "We combine lectures and case studies and link visiting speakers with case studies in the school," said Tàpies. "We will make sure we have permission to write a case study on a specific business case and then make our own conclusions. The following day, the business owner will come in to review the conclusions with the students."
IESE also runs a family business club. "It's a club, not a formal subject, so we organise activities around the concept of family business," Tàpies explains. "We discuss the businesses owned by those doing MBAs and attract keynote speakers from the world of family business to talk at the club."
Case studies and practical work are at the heart of the Insead programme – as are visiting speakers. "We try to arrange different perspectives for the students and attract many disparate keynote speakers," said Carlock. "Recent speakers have included Ernest Antoine Seillière, executive chairman of Wendel, the steel and bullet maker, and Richard Hoare from the Hoare Bank."
However, Carlock feels it is the way that the course is designed that resonates well with students. "You can only learn so much in one setting," he said. "At Insead we try to integrate both business and family thinking. About half of the students come from a family business, often from the largest family businesses in Europe, the other half plan to work as consultants, investment bankers, investment advisers or employees in family businesses. In some cases they'll be trying to work out where to fit in to the family business while on the course. Others will be working to understand how to support their family's business although they may have decided to work elsewhere. So we have to be quite clear as to how we are going to teach this subject area to a room full of people with differing agendas – that all recognise the value of family business education. The students are all very demanding and we have found that the most beneficial way to address the subject is by using student projects."
Family business as an academic subject is maturing all the time and an increasing number of institutions around the world are offering a greater number of programmes to support the subject. Students' individual aims and criteria should be at the heart of the course selection process and there are now a sufficient number (and variety) of courses to meet the needs of most potential students. As Keyt attests, it's a subject that is only likely to generate increased interest: "The majority of all businesses are family businesses, so it makes sense to teach about family business. If 80% of all businesses are family businesses, it stands to reason that most individuals will end up working for a family business some day and will benefit from understanding the unique challenges that family businesses face."