23: Family Business Ownership: Four Rooms and Five Rights

Let's Talk Family Enterprise

Introduction

Welcome to Let’s Talk Family Enterprise, a podcast that explores the ideas, concepts and models that best serve Family Enterprise Advisors in supporting their clients.

All views, information and opinions expressed during this podcast are solely those of the individuals involved and do not necessarily represent those of Family Enterprise Canada.

Description

Host Steve Legler speaks with Dr. Josh Baron, co-author of HBR's Family Business Handbook about Family Business Ownership. Together they discuss the Four Rooms models, which nicely complements the Three Circle Model, as well as the Five Rights of Family Business Owners (Design, Decide, Value, Inform and Transfer).

Guest bio

Dr. Josh Baron is a co-founder and Partner at BanyanGlobal. For the last decade, he has worked closely with families who own assets together, such as operating companies, family foundations and family offices. He helps these families to define their purpose as owners and to establish the structures, strategies and skills they need to accomplish their goals. Josh is also an Adjunct Professor at Columbia Business School, where he teaches MBA courses on Family Business Management and Managing Conflict in Family Business. He also teaches in the Enterprising Families Executive Education Program.

You can find out more about Dr. Josh Baron on the BanyanGlobal website.

Key Takeaways

[0:30] Steve Legler introduces Dr. Josh Baron to the podcast and invites him to share a little bit on how he developed the Four Rooms model.

[2:30] Should the Four Rooms model be used with or instead of the Three Circles model? Dr. Baron talks about how to understand system dynamics.

[6:12] Family and family business dynamics differ greatly; Dr. Baron speaks to the function of doors as they encourage or limit access within a family business as well as the model as a pedagogical tool.

[9:10] Dr. Baron shares a professional anecdote where working with the Four Rooms helped organize and streamline operations. He also shares his tips on how to use this tool more efficiently.

[13:10] The distinction between “voice” and “vote” leads Dr. Baron to share some advice on how to navigate certain touchy situations in the Owner Room.

[14:55] After the “Three Circles” and the “Four Rooms”, we have the “Five Rights of Ownership”. Dr. Baron breaks down each of these rights and what they tangibly mean.

[20:00] Creating capital through communication is something Dr. Baron lives by. He shares his thoughts on finding the balance between privacy and inclusion.

[26:40] Power dynamics in owner’s groups can shift over time, Dr. Baron shares the story of “the kids” who grew into their ownership power in their 50s!

[31:47] Dr. Baron offers his book recommendations as well as advice for advisors.

[35:09] Steve thanks Dr. Josh Baron for sharing so much of his expertise and invites listeners to subscribe to the podcast.

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Mentioned in this episode

The Let's Talk Family Enterprise podcast is brought to you by Family Enterprise Canada.

BanyanGlobal Family Business Advisors

Books:

Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise, by Dr. Josh Baron and Rob Lachenauer

Range: Why Generalists Triumph in a Specialized World, by David Epstein

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