By Danielle Walsh
The title of this article might leave you wondering, “As a member of a family business, what can I learn from pirates?” As it turns out, we can all learn a lot! We often think of pirates as barbaric, dirty, and unorganized. Yet, it turns out there was a method to their madness, and it’s this method that allowed them to govern the waters for many years. Keep in mind, pirates were under constant attack by military frigates carrying 70 to 80 well-armed, well-trained, and well-fed men. How is it pirate ships with 100 to 150 untrained sailors from various backgrounds and with different interests were able to succeed?
In reality, pirates like those aboard Captain John Phillips’ Revenge knew they needed to manage the crew’s expectations with regard to the execution and leadership of their activities, as well as the ownership and distribution of the wealth (or ‘booty,’ as they called it). On each pirate ship, there was a code of conduct outlining expectations for the behaviour of each person on board. When pirates joined, they had to sign a document stating they agreed to this code. Family businesses should do much the same!
Managing family member expectations and providing clarity as to what is expected and why can go a long way in preventing conflict and greatly facilitate the process of management and ownership succession. If more family businesses developed a set of rules like the pirates’ code of conduct, much of the conflict that often plagues them would be diminished. These rules would provide a roadmap for a smooth, effective management and ownership transition to future generations.
Succession issues continue to challenge families in business due to the unique characteristics of family enterprise. These include role dichotomy (i.e. being business leaders while parenting), sibling rivalries, generational gaps, active and non-active family members, family and non-family employees, entitlement, and wealth distribution, to name a few, and can create an environment of stress, uncertainty, and discomfort within the family and the business. The use of family business rules (also referred to as codes of conduct or family charters/constitutions) has proven to be an effective strategy in this regard.
In this article series, I will be equating the pirates’ code of conduct (specifically, the articles by Captain John Phillips) to recommended family business rules. I will start with Rule 1–Employment Criteria.