Regular FWR contributor and wealth industry figure Joe Reilly sits down with a family enterprise consultant and academic to talk about the concept of a "chief learning officer" and the value such persons can bring.
Family office consultant Joe Reilly interviews Greg McCann, a family enterprise consultant, professor and founder of the Stetson Family Enterprise Center. They talk about how the new concept of a Chief Learning Officer can help communication and build leadership in family businesses and family offices. To view some recent interviews that Joe has conducted for FWR, see here, here and here.
Joe Reilly: You have been doing a lot of work around the idea of a chief learning officer (CLO) for family businesses. What is the concept in a nutshell?
Greg McCann: I have to credit Jay Hughes for introducing me to this concept. The catalyst for the idea is if large government entities and the majority of large publicly traded companies have this position to develop their employees, then why shouldn’t family enterprises? Given the current rate of change, complexity, globalization, and competition, for any family to avoid developing the family’s capacity is to invite unnecessary risk.
One major distinction is that unlike an employee in a company, a family is going to care about developing the family member as a whole person. That is why I prefer the term “development” to mere education. Talking with your daughter about her values; with your grandfather about his legacy; or firing a sister-in-law are deeper than education. The second distinction that truly motivates me is that in a family the relationships are longer-term, far less commercial, and thus families are more willing to invest in the deep, transformational work that we developed in the two programs I led at Stetson and that we offer to our coaching and consulting clients.
Could you describe why corporations have chief learning officers?
My perspective is that as we moved to a more service-oriented economy, and even more recently to an experience-based economy, the capacity of the human capital, including their networks, are more vital than ever. Last fall I heard a thought leader at Microsoft say that in the near future your value in your career will be more determined by your human network rather than your knowledge.
Why is there a need for a CLO now?
I see the world changing and family enterprises themselves changing. Thomas L Friedman’s recent book, Thank You for Being Late, does a great job of describing this need. From my perspective we all need to develop a greater capacity than ever before.
Why? Well given the exponential rate of change (e.g. software updated daily), greater interdependency (e.g. a terrorist attack in Mumbai delays your flight out of Atlanta), less career stability (e.g. the so-called gig economy), and ever-increasing role of technology (i.e. Stephen Hawking’s view that artificial intelligence is the biggest threat to humanity), we will have to be able to handle more, be more agile, and be more resilient.
Particular to family business, there was a landmark study* by the Family Firm Institute that Joe Goodman co-sponsored, that looked across the U.S. and across industries, at families in business that were second generation and older, which revealed that the iconic notion of a family owning one business for generations was less reflective of reality than many of us realized. For instance, the average respondent had changed their core business more than twice! The study also concluded that the family ought to be viewed as the source that helps create and transfer wealth. Couple that with the innovative program Babson College started called S T E P, or the Successful Transgenerational Entrepreneurial Program, that is a consortium of colleges and universities doing case studies of families where the entrepreneurial energy is coming from the family, and you see that the family is more and more the foundation.
If a family business mindset says, “we are a family that owns and operates a business”, then a family enterprise mindset is one that says “we are an agile family that deploys our finances, talent & relationships into opportunities that align with our family’s purpose plus we have an ongoing practice to make our family’s involvement a strategic advantage to all the enterprises we are involved with”.
Who would be a good CLO for a family, and how would they be chosen?
This is a great question and one that a group that Jay Hughes and I have put together is struggling with. My sense is that the person would benefit from having some background in education or training, but they also need to bring great collaboration skills to get the buy-in and co-ownership from key stakeholders. I also believe that if they are going to truly do transformational work discussed here, that they need to have done such work themselves. In a nutshell they must be able to be very innovative and also very intimate with the family they are serving.
How would the CLO interact with the other executives in the business or the family office?
I believe this is an emerging concept and my experience tells me that it may be that the process of co-creating this with the stakeholders might be more important than any exact template. It would have to dovetail with the family and enterprise cultures, so in one family it might seem to make sense to have a family member, in another (perhaps because they haven’t been exposed to much beyond their family) it might be best to bring in a non-family member.