When discussing women’s roles in the family business, we often fail to recognise how different perspectives can change the conversation. A shift towards this recognition is critical for empowering the next generation and promoting a more inclusive environment.
Daniel Trimarchi, Director of Family Business Advisory at KPMG Private Enterprise in Canada, conducted in collaboration with the STEP Project Global Consortium, a survey of family business leaders to understand the various perspectives that affect the structure of their companies.
These perspectives change from generation to generation and are often influenced by the relationships people form within the family and the business. What’s more, each perspective determines women’s roles, as well as the rate of change attributed to those roles.
In this episode of Women in Family Business, Ramia El Agamy and Daniel Trimarchi discuss the difference in generational perspectives, the way in which we define our roles and how we can empower the next generation of leaders – both men and women.
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Transcript
R: Daniel, you are the first man we have had on this podcast, which outlines the whole reason why we’re having this discussion in the first place. This discussion has become such a segregated conversation, with women talking amongst themselves and men staying on the outside.
That is never what we wanted, especially at Women in Family Business. We have always wanted to involve every potential stakeholder in the conversation and explore the role that women play in the family enterprise now that they have greater access to roles and ownership.
At KPMG Private Enterprise, you have an ongoing series called ‘Empowering the Future of Family Business’. Part of that series was dedicated to the role of women in family business.
Why did you decide that the topic of women in family business deserved its own focus area?
D: Family business is such a great area in which to have these discussions. We talk so much about the different perspectives in family business, and the three-circle model brings those perspectives together. Through the diversity of perspective, you get great results.
That was one of the catalysts for this content. It was born out of a relationship with the STEP Project, a culmination of global academics and universities that work in this space.
In the 2019 survey that the STEP Project and KPMG Private Enterprise organised, we saw the role of women in family business changing on a demographic level. Only 18 per cent of the respondents who were CEOs were female.
However, when we looked at the demographics, we saw a shift from the Silent Generation to Baby Boomers to Gen X. When we looked at the positive impact that this shift was having on performance, it was clear that that was a driver for family businesses.
In this article series, we wanted to highlight some of those drivers and have those conversations to see where family businesses can continue to grow and strengthen their organisations. The role of women in achieving that is critical.
R: As a man undertaking this conversation, were you taken aback by the responses around women’s perspective on the family enterprise?
D: Massively. It was a huge learning experience. Being a straight white male in his thirties, I have a very specific perspective on things. I grew up learning different behaviours and approaches, and it was an amazing experience to listen to so many great family business leaders share their perspectives.
Some interesting points came out of this discussion. In the report, we talk about the hidden CEO and the Chief Emotional Officer. That was a stereotype that I’d seen quite often. Even in the marketing collateral, that Chief Emotional Officer was there across many reports.
I thought that this role would be met with reticence, but it was amazing to see so many leaders view it as a secondary role in addition to their primary role. That viewpoint drove some interesting conversations around understanding how the women in these family businesses were interacting at the family level, as well as at the business level. Juggling those two roles was often a huge source of difficulty in the initial sense but also a huge source of strength.
R: When women enter the family business construct, particularly in a multi-generational family business, they may feel like an afterthought. A role is finally opening up for them, but they still must deal with a male-dominated legacy.
There are certain roles to which you are attributed. You have to take them on because the job needs to be done. That’s how I see the Chief Emotional Officer role. It’s a female response to jump in and take on the role that no one else will. Whether that is the right or wrong response is a different discussion.
There are also the roles that we decide on for ourselves. We define them, and we set out to fulfil them because we believe they align with our own purpose.
When you spoke to these women, did you feel that there was a lot of that purpose-driven role definition? Did you see them carving out a role that aligns with who they are as opposed to who they think the family needs them to be?
D: Those first-generation entrepreneurs didn’t have defined roles. They were the matriarch or the patriarch, the CEO, the Chairman of the board, the majority shareholder and probably even the number one employee in the system. The role definition was so vague.
I often use the analogy of a compressed accordion; all the roles were there, but they were all pushed together in one. It was often daunting for next-generation members, both male and female, to enter that business because it was so ill-defined.
Now, we’re seeing that accordion being pulled apart and each of these roles being better defined. Having the ability to choose and define your role is becoming more prevalent, especially at the owner level.
There’s enough research now that people are seeing that appointing the eldest child is not the most effective method of succession. It is outdated, and it has to be revisited. That has given us the opportunity to better define these roles and appoint them to the next generation, irrespective of gender.
R: Outdated is a word that’s being bandied around this conversation of women in family business.
I get asked a lot why we have to have this conversation separately. The ideal scenario is to start talking about humans in family business, and then this lovely podcast would come to the end of its purpose. However, I don’t think we’re quite there yet. Some of the responses that you’ve uncovered in KPMG indicate that, as well.
When looking back at the conversations you have had with these different family leaders, what are the main challenges that all of them seem to face?
D: I can only speak second-hand on this in terms of what they shared with me. Many of the challenges related to the idea of having a purpose and being deliberate with the roles they wanted to play.
However, the main challenge was about understanding the ecosystem in which they were operating. This idea goes back to that point of perception versus reality. It was amazing to hear from so many leaders and see their perceived need to work harder because of the outdated stereotypes or generalisations they experienced.
Quite a few of the leaders we spoke to were in male-dominated industries. For leaders who didn’t have industry expertise in that specific field, their biggest focus was on making sure that they created relationships with people within their organisations.
They wanted to drive the right behaviours and show that while it was a merit-based appointment, they don’t have the answer to everything; no one does. Being deliberate about their role and purpose was the key for a lot of these leaders to be able to fulfil their definition of success.
R: Do you feel like there’s a tendency for us to overcompensate and to try to over-deliver? Many women might feel that if they were men, they would not feel so overly apologetic about their performance. Is that still a prevalent response that you’re getting?
D: In the conversations I had, the person who held each of these people to the highest account was themselves. There was always that self-doubt. I remember listening to one of your earlier podcasts about the imposter syndrome. In those discussions, that was very prevalent.
There was a recent survey that the KPMG team in the U.S. conducted from a women’s leadership perspective. The survey found that 81 per cent of women believe they put more pressure on themselves not to fail than men do, and 74 per cent of executive women believe that their male counterparts do not experience feelings of self-doubt as much as female leaders do.
We definitely qualitatively saw that in the discussions that we were having. There is that element of self-doubt and holding yourself to such high account as a result of that doubt.
R: The pressure from within is great, but we also know that not all is rosy. The reason why we still have this podcast and this initiative is that many women meet resistance from within the company, especially when they start ascending to leadership positions.
We still hear of outdated perspectives that women face when they take on leadership roles. This resistance might not necessarily be from men. It can also be from other women, which is, unfortunately, very often the case.
What do you think are the prejudices that women face the most when joining the family enterprise, particularly when they take on a leadership role, that can be attributed to gender?
D: We were able to break down that perception of the environment and classify it in five layers.
There were the individuals themselves, their views and how they can change those views. They then extended that to their family system to include how their families treat them and whether they can control those perceptions. Then, it extended to the business to see how senior management and employees view them.
The next layer was the market ecosystem, including suppliers and customers. This layer included specific examples around the culture of the field. In some situations, the women would have to roll up their sleeves and “be one of the boys.” In other situations, they were able to create a different identity to try to empower change.
The last of the ecosystems is the wider community in which they live.
When you look at these perceptions from a community level down to how their families react and treat them, I think many women believe that the social proximity a person has affects how they judge them.
For example, my parents understand me and hold me to a high standard, but they don’t treat me differently from my brother. As we go further out to the business, the market or the community in which we work, those stereotypes return because those people are much further removed from us.
Getting to a point where this podcast doesn’t need to exist is the utopia, but it is a journey. By looking at themselves, their family systems and even their business systems, many of these women have started to deal with those challenges. The key is continuing this conversation in the market.
I compare this to the market’s approach to nepotism. Everything you read at the mass market level says that nepotism is a bad thing.
However, the closer you get to the individual and the family, you often see huge competitive advantages that come with nepotism. The next generation members have ties to the family’s values and purpose, and they have a long-standing knowledge of the business.
R: This feels like a perceptions game where everyone sees this differently.
I get invited by a lot of men to congratulate them on the fact that they have integrated women in the family business. They see it as a big achievement. To a certain extent, I will be tolerant of that. Depending on the generation and the culture, it feels like a big step for them, and they feel they deserve accolades for it.
However, I drew the line recently when someone said that it’s the desserts of these men that women are doing so well in the family business. They were taking the credit of the fact that women were performing so well.
I’m not bringing this up to make the conversation uncomfortable, but it comes back to the idea of perspectives. We’ve seen this shift, and I wonder who has caused it. We’ve been having this conversation for so many years, but we have recently seen more cases of women emerging in family businesses.
In today’s world, do we even have a choice to consider a business organisation without women in it? Or do these men really deserve these accolades for including women in the workplace?
D: I think it’s quite laughable when anyone tries to take credit for this movement. I don’t think that is even plausible.
One of the reasons we started this project was that we saw that the benefits to family businesses of having increased diversity, inclusion and perspective, irrespective of gender.
However, gender is such a huge element of diversity, and 50 per cent of the population is female. How can we not have these people involved in family businesses? There is no way businesses can succeed when they’re missing out on so much talent and opportunity.
I think that’s the light bulb moment that so many businesses have had. Who takes credit for it is an interesting topic, but it’s peripheral. I would much prefer to look at what’s actually happening.
We had a great conversation with one leader. She was female, so the family business leaders put her in charge of philanthropy. The boys went on to run the business, and she got to give out some money.
In that specific case, what she did with philanthropy was phenomenal and actually showed them how powerful that role could be. It wasn’t a secondary role because it had a direct impact on the increased performance of the business.
The workforce needs to be able to choose and define their roles. We are at this cliff edge, and if we don’t jump off, we’re going to come up against it.
From a generational perspective, it’s difficult to think that you’re going to have the right leaders after four or five generations. Some of that comes down to chance, but the idea of cutting that talent pool in half is madness.
R: It’s not sustainable, especially if you’re aiming for multi-generational success, as most of our readers and listeners are. Diversity allows for different perspectives and cultural backgrounds, which is very positive for the future of the company and the family’s wealth.
Today’s context, particularly following 2020, has shifted the perspective of certain elements. We put a lot of question marks on topics about which we previously felt very certain, and many roles were totally redefined. Everyone had an “all hands on deck” mentality in many family businesses.
If we apply the women in family business lens to that particular circumstance, do you feel that this year has given certain women the opportunity to emerge from their usual role that was moulded around the fact that they were women?
D: 2020 will go down in history and will be talked about for a long time. With all the challenges, it gave us permission to change at a pace that we otherwise couldn’t have changed.
It comes back to the topic of how we evolve the role of women in family business. It was the perfect year to step on the accelerator, and because of that, it actually created the opportunity to do so.
At KPMG in Canada, we went virtual in the space of three days. Historically, that would have been a three-month or even a three-year project. Because of this amplified pace of change, we should focus on the things that we want to change because we have the opportunity to do that.
There were discussions with some of the leaders about how they had to step into new roles. In some cases, family members were affected by the illness and had to step away from their roles. We looked at how the different generations stepped in to help the family business and its members.
A lot of families are working together more than ever. Next generations are returning from studies abroad or from international assignments to work alongside their parents and chart these new courses. Those are potentially awkward conversations that didn’t happen because they didn’t have the choice.
A lot of the female leaders from the millennial generation are able to adapt and use their digital knowledge to support their families. They were able to show their parents their skillset and talent that may have been overlooked in the past.
2020 was a tough year for a lot of reasons, but it was also a huge catalyst to propel change. In situations where we’re looking for change, this year held really fertile ground.
R: It has been a year of friction, but there was also reduced friction in areas where there is usually a lot of resistance. Everyone has felt that acceleration of change that usually would have needed a huge discussion. We’ve also felt a shift in priorities.
As a man who is interested and involved in family business, what topics would you love to know more about as they relate to women in family business?
D: I can share my views, but I can also share some of the challenges we heard in the interviews.
One that comes to mind is the definition of a person’s role in the family and their role in the business. We’ve come a long way in the sense of traditional roles within families and within businesses. However, when you try to match those definitions, it becomes more difficult.
In one of the conversations we had with a female leader, she told us that her dad would come to her at 5:00 PM and say, “You should be at home with the kids.” Then, he would turn around wearing his Chairman hat and say, “Let’s go have a three-hour meeting about the future of the business.”
The idea of boundaries and trying to balance multiple roles is amplified from a female perspective. When there are roles that need to be filled, a lot of the female leaders roll up their sleeves and fill the role. For men, so much of their work focuses only on the business side.
You hear so many stories of first-generation entrepreneurs for whom the business was their third or fourth child. It was the one with whom they spent most of their time.
Women are often seen to have much higher emotional intelligence and a greater ability to manage those roles. However, because they are able to do that better, the weight of that role is even greater.
The second topic we heard about was how to foster the empowerment of women in relation to this generation, as well as women’s role in that empowerment. It was interesting to see the generational differences on that topic.
When there was one mountain to climb and only one place at the top of it, individuals could use a competitive and cutthroat approach to succeed. What evolved from this was that a generation of female leaders from 30 to 40 years ago was able to propel this future generation using a different mindset.
One of the leaders talked about standing on the shoulders of the previous generation. So many of the opportunities that she had had were because of her mother and the other women of that generation. Because there are more opportunities and more roles today, her generation can be less competitive.
This empowerment should be about lifting each other up, even within generations, not just working for the generation ahead. I don’t know how to solve this issue, but it was an interesting perspective to see how women and men play certain roles in continuing this discussion to benefit everybody involved.
R: Hopefully, by having you on this podcast, we’re setting a good example of that integration.
Thank you so much for joining us. We’re including links to the Empowering the Future of Family Business series by KPMG Private Enterprise and the STEP Project below this podcast.
D: Thank you again, and thank you for your contributions to the project. You’re featured in it, and it really helped bring it to life and take it to another level. So, I thank you and everyone else who participated.