The silent influencers in family-owned businesses

• In family-owned businesses, loyalty often outweighs talent; the trust and understanding between the boss and their trusted individuals shapes key decisions.
• Trusted advisers and loyal employees often have immense behind-the-scenes influence, shaping crucial decisions without formal authority.
• Overdependence on trusted individuals can lead to operational inefficiencies or manipulation if these trusted figures go unchecked.

“SOB” – a term that might make you chuckle – stands for “Student of the Boss” or “Saviour of the Boss.” This tongue-in-cheek phrase captures the unique dynamics of loyalty and influence within family-owned businesses (FOBs). In these settings, loyalty often overshadows talent, and a deep, almost familial understanding between these “students” and the business owner drives crucial decisions, both in the office and at home. Some of these SOBs make history simply by standing by, supporting blindly and loyally, while others find themselves pushed out when they dare to stand against something fundamentally wrong. For me, it’s important to be loyal, but not blindly so – I strive to uphold my values as a trusted adviser or an SOB… haha!

In a typical FOB, this hierarchy of trust and influence extends across the organisation, from the driver to the security guard, from the maid to the chef, and from the Executive Assistant (EA) to the chief executive. It even includes family members – the son, the grandson, the daughter-in-law, and the trusted advisor. In such environments, loyalty often trumps talent. The cultural essence of these organisations is rooted in the belief that “my disciple is my most trusted ally.” Many bosses, based on limited knowledge, offer advice that is then amplified by these SOBs, who pump the boss’s ego by propagating half-baked wisdom as the ultimate truth. At times, these SOBs may not even know much about the subject at hand but still offer safe advice instead of admitting their lack of knowledge. What’s often missing is a group of individuals with the courage to hold up a mirror and challenge what’s wrong or potentially harmful to the larger interests of the family. Those who dare to correct these powerful figures and their SOBs can be easily sidelined.

The role of loyalty at home

At home, these loyalists often transcend their professional roles, becoming integral to the family’s daily life. Take, for example, the maid who arrives with the new bride and eventually becomes a caregiver to the young grandchildren and the ageing patriarch. Over time, she earns the family’s trust to the point where she manages the household as if she were a family member herself. Her life is a testament to loyalty, and in return, she receives respect and financial stability.

On the flip side, consider the old cook who, despite his bad habits and inflated ego, continues to be retained because he knows the patriarch’s culinary preferences better than anyone else. His value isn’t in his current skills but in the comfort and history he brings to the family. As long as the patriarch is around, this cook remains a fixture, serving not just food but a slice of the family’s past. He’s like a background figure whose influence is acknowledged by the master but overlooked by everyone else.

The family dynamics: sons, daughters, and the generational shift

Another crucial angle in FOBs is the dynamic between the Son/Daughter of the Boss. Traditionally, father-son relationships can be a bit strained in these settings, while relationships with daughters tend to be smoother. However, this dynamic is evolving for the better. Interestingly, the relationship between grandparents and grandchildren is often at its peak, leading to instances where power transitions directly from the grandfather to the grandchild, leaving the father bypassed. This shift in generational power can create tension and raises the need for reflection. Perhaps spending more quality time with one another could ease some of these strains.

When these relationships are strained, the next generation may find themselves “grounded” in the name of playing it safe, or often without any explanation at all. New ideas or initiatives are halted before they ever take off, with the next gen being held back from fully spreading their wings. This creates a stifling environment where innovation and progress are curtailed by the weight of tradition and control. Recognising and addressing these dynamics is crucial for fostering a more open, supportive environment that allows new ideas to flourish.

The office dynamics: influence behind the scenes

In the office, the influence of these loyalists is no less significant. Some EAs, for instance, are so attuned to the boss’s mindset that they can make or break a proposal. Consider a legal case where an out-of-court settlement was being negotiated. The family board was scheduled to meet for final directions from the chairman, with the assumption that signing off by the chairman was a mere formality – though this was far from the truth. The papers were all set, and both sides had agreed in principle to comply with the verdict.

However, an old EA knew exactly whom the chairman would consult informally before the meeting. Discreetly, he tipped off a business head who had a strong relationship with an old lawyer, the chairman’s trusted SOB on legal matters. The business head visited the lawyer, explained the case, and received crucial advice that led to minor but significant changes in the agreement. On the day of the signing, everything went smoothly because the right person had been consulted beforehand. Without this intervention, the process might have been delayed indefinitely, with the agreement bouncing back and forth.

The power of trusted relationships

The SOBs in FOBs are often the gatekeepers, the quiet influencers who can determine the success or failure of key decisions. Their relationships, built on years of trust, give them an unparalleled understanding of both the business and the family dynamics. For anyone navigating the complex world of a family-owned business, identifying and building rapport with these trusted individuals is essential. Often, their 1-to-1 equations with decision-makers are so strong that the opinions of others don’t matter. However, it’s crucial to ensure that these individuals don’t remain unchecked, as they can easily become manipulative operational bullies.

In conclusion, while the term SOB might sound humorous, the role these individuals play in family-owned businesses is anything but. They are the silent pillars, the invisible hands that steer the course of both business and personal decisions. Often, it’s their ill advice or cover-up that leads to friction or disconnect in communication or collaboration. Recognising their shortcomings and respecting their influence is key to understanding the intricate web of relationships that define a family-owned business. As a trusted and talented advisor, I’m not into politicking, but failing to understand the politics of these SOBs can render me ineffective. I’ve learned the hard way to admit when I don’t know enough to advise correctly – an important realisation that might be useful for many of us. Actually, to some, I might be a SOB myself.

Naveen Khajanchi is chief executive of a leadership search firm, a division of NKH Foundation, and an executive coach. He is an alumnus of Insead.