Is YPO Good or Bad for Family Businesses?
Dear Advisor: My son wants to join YPO. I’m getting mixed reviews from other business owners in my position about letting him join. What do you think?
Recently, a young woman who is the president of her family’s auto parts manufacturing business was sharing the advice she had been given by her Young President’s Organization (YPO) support group.
“The group agrees that my main problem is my family. They keep reminding me that family issues are the most important factor for me to pay attention to right now. In fact, they have advised me to get my parents out of the business entirely, as soon as possible, so that key operating managers will listen to me and follow my direction as president. As long as my dad and mom are around, with offices on premises, people go to them for advice and counsel, rather than seeing me as the leader of the company. My YPO group has also told me to get my family off the board of directors and bring in outside board members.”
Every time this president attends her YPO meeting, tension in the office rises. Many times when she returns, she gathers her parents behind closed doors, and angry voices can be clearly heard inside the room.
“I wish she had never started with that YPO thing,” says the mother. “They are filling her head with bad advice. They don’t really understand family business. My husband and I started this business. She would never be a president at her age if we hadn’t put in the groundwork she’s building on. She thinks we should remove ourselves from the board of directors. Why would we do that? We understand this business and industry inside and out, from years of experience. If we left the board, how can we know what’s happening with the business? Most of our retirement is dependent on the performance of this business and we don’t trust her enough to remove ourselves. We’ll move on one day, but we’re just not ready yet because she’s not ready yet..”
We think YPO is a terrific support network for family business leaders, giving them exposure to a range of leadership styles and challenges. (The Executive Committee---TEC---also offers such support group). The intimacy and honesty of YPO groups is extremely helpful to developing leaders. We certainly agree that outsiders on boards of directors provide essential expertise and accountability that family members often cannot provide.
However, YPO members are seldom experts on family business. They may not understand the delicacy of helping founding parents to move on. They may not understand the need for the next generation to prove their ability through performance and results before mom and dad will move on. They may not understand how business leaders often don’t have hobbies or interests outside the business, and often can’t give up their offices because they have nothing to replace them with.
SO – support your son joining and enjoying the YPO or TEC. But be sure you and he know when you need to supplement their good advice with knowledge from local family business programs or other advisors.
Amy Schuman, a Senior Associate of The Family Business Consulting Group. Inc., works with family businesses on leadership development, communication skills and team building. Her experience is centered on helping family members collaboratively create systems, structures and relationships to help them function as effective stewards of their asset. Amy has developed extensive knowledge of company-wide training, communications, continuous improvement and team building interventions.
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