383 Designing What Lasts: How Great Leaders Reimagine Ownership, Innovation, and Legacy with Alfredo De Massis

***DISCLAIMER: Please note that the following AI-generated transcript may not be 100% accurate and could contain misspellings or errors.***

[00:00:00] 

Mahan Tavakoli: Alfredo De Massis says, welcome to partnering leadership. I am thrilled to have you in this conversation with me. 

Alfredo: Thank you. I'm looking very much forward to it. 

Mahan Tavakoli: Can't wait to learn more about your insights on family business and family business book. I told you, Alfredo, I absolutely love all of my experiences in Italy, including many of the family run organizations in Italy that said.

Before finding out a little bit more about you, I wanted to set the context of how my mind was blown on the scope of family businesses. So when I saw your book, Alfredo, I looked and I saw that about 70 to 90 percent of the world's GDP comes from family businesses, about 60 to 80 percent of jobs in most countries, right here in the U.

S. 87 [00:01:00] percent of business tax returns are family businesses. But before we get to any of that, Alfredo would love to know more about you, whereabouts you grew up and how your upbringing impacted who you've become. Thank 

Alfredo: you very much. Yeah, as you said, family business are really dominating every world economy.

My background very quickly without bothering too much. I dedicated my life to entrepreneurial families. And so I work in the space of family business and family offices. I basically conduct three different activities, research, education, of course, being a professor of entrepreneurship and family business at three different universities, I dedicate most of my time to educating the next generation of family leaders, and outreach and consultancy advisory activities.

I also serve on the board of some institutions, both in Italy and in other countries. So most of my, I very much believe in the, in being an engaged scholar. So for me, it's very important to combine the [00:02:00] academic rigor that you have in in, in scholarship with with relevance for practice.

And I tried to have these as my own footprint in the work that they do with families, in the work we do with family offices and so forth. So I'm. The kind of guy that typically is called when a family, for instance, has some issues during the generational transition or issues like, they need to professionalize the business or they need to improve the governance of the business or of their family, or they need to engage the next gen because there are issues with some of them.

And then they call me and I help them to find the right solution. And I draw on , my own reason, but also my experience at international level to help them find solutions. 

Mahan Tavakoli: Alfredo, I'm curious, how did you get interested in family businesses? And again, I've been involved in business for decades and yours is one of the first books and you're one of the first scholars I saw [00:03:00] focusing on this, which is why my mind was blown when I saw such a huge percentage of businesses are family businesses.

How did you get interested in it? 

Alfredo: I got interested because, I started actually my PhD after my career. I worked first as a financial analyst and then as a strategic advisor and then I moved to academia. And I started maybe in a different area, but then I was very much my attention was very much attracted every day by the news that you had in the newspaper and magazine from different geographies that talking about big scandals within entrepreneurial families or big issues or the, the great obstacle for succession.

For creating the next generationally there's and also, of course, by the overall statistics, right? That are quite self speaking in depicting a kind of a picture where basically it's clear that it's very delicate. The transition from one generation to the next. And as I said, this is very relevant. This is something that [00:04:00] is likely to, to have an impact because we cannot forget, as you mentioned at the beginning, that family businesses are very important for the economic developments of countries, but also for the social development, because families are in the end are, forces for for a better world, right?

They are animated by goals that are not just economic ones. And I started getting fascinated, and I started working with some of them, and that's how I started to work in this space, which when I started, as you said, was a space where there were many. advisors, so the approach was very anecdotal, and there were not so many professors that tried to build up a science out of it.

Now, thankfully, we have a big literature, we have many best practices about things that, you are advised to do, mistakes that you should avoid, and things like this. That's how my journey started. 

Mahan Tavakoli: So how do you categorize a family business? People can typically think [00:05:00] about the corner grocery store or a mom and pop shop.

What is a family business? 

Alfredo: To me, a family business is any business where you have a family that has, on the one hand, the ability to influence the vision of the business, And also that's not enough. The family needs also to be endowed with the willingness. to hand over the business across generations.

So you need both the ability and the willingness because if you have only the ability and you lack the willingness, you basically have just a company with concentrated ownership or concentrated governance. But it's this willingness to really transfer it to the next generation. that create this distinctiveness that characterize the behavior of family firms.

And this definition applies to businesses of any size from, of course, small and medium enterprises where the percentage of family firms is close to 100 percent to even larger multinational to many listed companies. I'm currently [00:06:00] working with some multi generational families that are listed or are thinking about listing on a 

stock market. 

Mahan Tavakoli: People would be familiar with Walmart or Ford. I'm right outside of Washington, DC area. Mars is a family owned business. So these are large global corporations that the family still plays a critical role in the organization. 

Alfredo: Yes, these are corporations where the family still has the discretion to influence the vision of the business.

This doesn't mean that the business must be managed by the family, because in many cases the family doesn't manage. For instance, I know many family businesses that, where the family is just serving on the boards. In the governance role, or in some cases, even when the family just plays the role of owner, because, the being the owner is a job in editing share does not make per se a good owner.

If you want to be a good owner, if you want to be a responsible owner, you have to learn. And sometimes it's [00:07:00] very legitimate, very reasonable, very natural that during the development of an entrepreneurial family, at some point the family makes a step back in order to grow faster, to grow more from the management and sometimes from the governance, but still the family is the one who owns.

And by honing, you control by honing, you can be an active owner. And that is, actually a world literature that talks about ownership competencies. You need to be endowed with some competencies to be a responsible owner. 

Mahan Tavakoli: A couple of things that come to my mind when I think about family businesses, Alfredo, one is typically when talking about a family business, we don't see it as, or I don't see it as being innovative.

So what are the family businesses that are also able to be innovative doing? Differently to be able to marry the best of the heritage, the family, along with being able to stay on the cutting edge. 

Alfredo: Thank you very much for this question because I [00:08:00] dedicated most of my activities, most of my publications are exactly about family business innovation.

I think we have a lot of false myths around that because we tend to think that family businesses. are a type of business that do not innovate or only innovate incrementally. But at the end of the day, if family businesses continue to dominate every world economy, and we know that without innovation, no business can succeed in the long run, they must be innovative.

Indeed, what my research shows, publishing in different journals, from top management journal to top innovation journals, is that actually the way innovation happens is different. They do innovate, but innovation decisions are made in a different way. And you touch the point of tradition, for instance, it's true.

We are inclined to think about the past and the future as two very opposing things, right? The very, if you read an innovation handbook that has largely neglected family [00:09:00] firms, by the way, considering only corporations like 3M and these kinds of companies, the very simple message that emerged is if you want to make the way for the new, you have to dismiss the old.

So these innovation gurus keep saying, the past is a source of inertia. The past is an obstacle. They talk about liability of sadness and lots of things. Now, actually, what my research shows is studying many family businesses that are at the same time. Champions in innovation and, very good at being anchored to their tradition.

And then thinking about companies that I studied or worked with, like Beretta, 16th generation, they make guns and many other things like Lavazza in the coffee industry, like Abbott in the pharmaceutical industry, in the natural medicine industry. And that could go on with the example. Is that actually?

There are some family businesses that are very good instead of thinking about the past and the future as two opposing things and leveraging their past in order to innovate. So [00:10:00] these family businesses are businesses that use their past, their history as a resource. Like we have financial resource. We have human resources, we have social capital, you, we have infrastructure resources.

There is something which is your past. And and there are, my research shows how you can do that. Basically to, in a nutshell I discovered that there are two dynamic capabilities that allow these family businesses to realize what I call innovation through tradition. And these are, one is.

called interiorization. These family businesses are very good at bringing this past, this history, this heritage very close to anyone within their business, from the lower employee to the higher level CEO. And they are also endowed with another capability that they call reinterpretation. They're very good at recombining and reinterpreting this knowledge aspects coming from the past with the current context, with AI, with new materials, new [00:11:00] technologies.

So as to bring to the market the new products or, and or new services that are new, but at the same time embed and incorporate something about the tradition. And when I talk about tradition, it can be about, of course, raw material can be about traditional manufacturing processes, but can also be about the beliefs of the family.

It can also be about the product science are combinations of texts. and colors that convey a meaning to the customer. Think about the Missoni fashion house for instance. Missoni is a quite famous Italian family owned fashion brand. If you buy a sweater, a Missoni sweater, you immediately see the tradition.

There, because the product science are clear. So it's about tangible and intangible aspects. And many of my studies in the area of innovation show how, what are the practices through which you can leverage your past to make the way for the future. And they also have some works that deal about how you can rhetorically use the [00:12:00] history of your family.

For instance, I have a publication of a company called based on the study on a company called Sweet Mandarin. This companys would be a normal Chinese restaurant chain. But by making a very rhetorical use of the history of their family, they were able to do a number of things that led them.

to have a theater show around them, to cook for the prime minister, to create some books about some recipes. They created the narrative that really led them to distinguish themselves from the, from what would be a traditional Chinese restaurant. And so I work a lot on this area. and on what I call the history scripting strategies.

So the strategies to which you can tell the history, 

Mahan Tavakoli: you 

Alfredo: know, even rhetorically exactly, which doesn't mean that history has necessarily as what happened, but the way people interpret what happened and tell it. 

Mahan Tavakoli: Love that, [00:13:00] Alfredo. And we can spend hours just on that. I'm so glad that you mentioned you have resources.

You both addressed it in the book and you have resources around that because one of the challenges I've seen, both having worked in an organization that was family owned and having worked with family owned organizations is that story can either become an anchor to the past. And cause resistance to change and rationalization of why there shouldn't be change, or it can be a springboard energizing into an innovative future.

So that narrative becomes really powerful in guiding the organization. 

Alfredo: Absolutely. I strongly believe in the power of that. And I think this is especially important when, as I say in my book, by the way, when the entrepreneurial family change its own perspective from the perspective of a family in business [00:14:00] to the perspective of a family on business, which means That, at some point you will start reasoning or you may start, I think you should, that's my point, start reasoning, not anymore in terms of operational businesses, but you should start reasoning more in terms of.

an entrepreneurial family galaxy, which means that in order to administer all your assets, tangible ones like money, like properties, and intangible ones like history, like the culture of the family, you need to start to create different planets, different entities, different companies could be a foundation.

Could be the family office at some point, would be a family museums. Like many families in Europe are increasingly doing would be a family incubator to foster and stimulate the entrepreneurship within your family. It could be a family investment company. So at some point you end up, you are having a galaxy and if you become capable of mastering this [00:15:00] galaxy, which of course is some challenge, right?

Because. For you, if you don't reason anymore in terms of single business, but in terms of galaxy, it means that you would be very happy at some point to shut down a business or to close it to, to drop a planet in your galaxy, maybe add a new one. What is important is the long term prosperity of the galaxy.

If you embrace these different perspective, you start reasoning around even very traditional issues of family films, like succession with a new mindset. Because in the galaxy, you can understand more easily that there are different planets that can accommodate the heterogeneity of family members.

Families are not monolithic blocks. Different family members have different goals. If you and your brother, if you are both involved in management and ownership, and your brother is only involved in ownership, you will have very different goals. Just to give any simple example. So different family members have different goals, different ambitions and different competencies.

And so some of them may not [00:16:00] fit in an operational business, but may be very good impact agents for the foundation. For instance, are there may be very bad entrepreneur in terms of scouting opportunity, business opportunities and exploiting these, but may be amazing at managing their patrimony.

And so maybe fitting, for instance, in the family office or in a family holding or in a family real estate company. So what I'm saying is that the Galaxy allow you to reason more broadly around even traditional topics, and also to understand that different family member can fulfill, can take different roles.

So you can be a family owner, you can be a family manager, you can be a family director, you can be a family entrepreneur, and that could go on. And so it's a completely different way of thinking and of reasoning. You basically are reasoning in terms of, okay, I want that my families continue to prosper.

I want to create a dynasty, but I'm not anymore just a business. This transition from a [00:17:00] family in business to a family owned business, in my view, it's a very important mindset change that explains. How some families created something that it continues to be bigger, across generation and currently working, for instance, with a 13 generation family owned bank, where there are also other businesses, not just the banking business, that is the bank, the textile renewable energies wineries, but the main business is the banking one.

And this family is amazing because was really able to create the galaxy. And of course, creating a galaxy means also. Challenges from the governance perspective, because mastering a galaxy is not just like mastering a single business, right? You need a governance for each of the planets, but you need also governance to coordinate the flows of resources of various kinds among the planets.

And you also need some family members who have that kind of Capability to envision the future, to imagine the future, the evolution of the family and the evolution of the business [00:18:00] and adjust the galaxy, because let's not forget that businesses evolve over time, but also families, generate new family members, families, can have events like that.

Divorces can evolve in extended families and I call these figures the family creators. So the family creators are some family members that some families have in their own that, they are not managers, they are not executives, they are not Director serving on the board. Their role is similar, more similar, I say, to the role of architects.

They have to envision how their family will be evolving. They have to envision how the business will be evolving with the macro trend. And there are those who have to make sure that, the morphology of the galaxy will be changing accordingly. 

Mahan Tavakoli: And that is very hard to do, Alfredo, 

so there are a couple of aspects of it that we'd love to get your thoughts on. All families, sometimes in the U. S. we joke about at Thanksgiving, everyone has a crazy [00:19:00] uncle that shows up and you have to deal with a crazy uncle. All families have their crazy uncles, including family owned businesses, how can you That be managed.

 Someone wants a job within the organization. Some only want the financial benefits of being involved. How is all of that managed in successful family firms?

Alfredo: That's a very good question. Even beyond the crazy ankle, many families often have their freedom. If you have watched the Godfather there is very often a freedom in every family. And the thing is there are some things to consider because you said, of course, there is a governance of the business.

Which is important, but very often there is another part of governance, which is the governance of the family that is overlooked by many professionals and is even more important because sometimes you have business with a very good governance, but families where relationships, are not good, where communication patterns are very bad, [00:20:00] where, and you have to pay attention.

a lot at the governance of the family, which is what I work especially with when I support families. Even more neglected is the governance of the interface between the business and the family. So there is business governance, there is family governance, and there is a governance of the interface. Because on the one hand you need to make sure, of course there are overlaps, but you need to make sure that the governance of the family does not interfere too much with the governance of the business.

What I mean is that, as you said, different family members might have some goals that are more oriented toward family centered aspects, like giving a job to my other family members or, making sure that we keep control of it in the hands of the family. But these may not be necessarily, to the advantage of the business goals.

And it's a very. Important and careful design activities that you have to do. But, governance is one leverage to which [00:21:00] You can help families to act better. Because you can discipline the behavior. Of course, with, under the umbrella of governance, I also put, for instance, the introduction of rules, or if not rules, at least the criteria.

For instance, to discipline the entry of family members in the business. Which is another very hot topic, right? You have to make sure as much as possible that when a family enter, a family member enters the business, this is perceived not such as a nepotistic decision, but as a decision that is based as much as possible on merit.

And of course, the rule criteria, these kind of things help in that way. Another important aspect are also goals. If you help families to start actually even before goals, to start reasoning, okay, what are our values? What are our beliefs? And the values and beliefs are those that then leads to goals, right?

If you are able to drive a family to toward some [00:22:00] collective commitment to family centered goals, to some goals, because family, different family members have different goals, but you can work to set as much as possible aligned goals. I've done research in that area. This is also very important. For instance, in the current area today is even more than yesterday important to have a very clear purpose.

Purpose means, Why do we, why are we as a family together? Why are we doing again after so many years if we are a multi generational family? What we do, what is the reason beyond that? So it's the ultimate reason why we exist. It's much more than a goal. And I think all these things can also help, but at the end of the day, you need the strong governance, which means might mean to create the family council to improve the governance of the family, which might require creating a family protocol of family constitution, depending clearly on the complexity, right?

A founder led family firm is [00:23:00] different from a sibling partnership, family firm, and is different from a causal consortium. The higher the number of family members, the cause of concern is characterized by more likelihood of conflicts of tensions and things like this. But yes, governance is key.

Mahan Tavakoli: In doing that governance, obviously that helps the organization succeed. Now, why is it that The success of the family owned firm goes down by each successive generation. So again, I was looking at the data and it seems like less and less likely for the family owned firm to be successful as it passes on to second, third generation.

What are the issues that contribute to that, that maybe family owned companies can learn from in order not to make those same mistakes? 

Alfredo: I think that the main issue that we have when we deal with succession, when we try as professional to help families, entrepreneurial families to handle succession is that I [00:24:00] believe we focus too much on technical aspects.

Legal aspects, fiscal aspects, financial aspects that are, of course, important. But I think there is a lot of work on that. And we forget that the main reason why we have those dramatic statistics about succession is that it's so difficult to create the next generation of family leaders. And this is not because of technical issues, most typically, it's mainly because there are some softer aspect that are more managerial, that are more related to really Being very delicate task, because as being an expert in leadership, that leadership is not something that I can give you.

You have to earn it on the field. And so there are typical problems, typical issues, typical risk factors in a succession process that are, for instance, the obsession that many incumbent generation leaders have when they think about their daughters, their sons they are obsessed with what they call the syndrome of the clone syndrome, [00:25:00] the clone of yourself syndrome.

So they were, are obsessed with, willing at any cost, the clone of themselves. Understanding that having the clone of yourself is impossible. I would say it's impossible statistically, and it's impossible. It's impossible biologically, because you are considered individual that belong to different generations.

And so they are different. And so the most, more reasonable approach would be rather than being obsessed with the idea of having a clone of myself. Just think how you can change the organization to fit it more the characteristics of your daughter or son. Another important barrier to succession is another syndrome is the syndrome of letting go.

In a family business with Typically power is attached to the business for reasons that go beyond the financial aspects, the economic and financial aspects. There is a social emotional attachment. There is an important notion in the family business literature called [00:26:00] social emotional wealth. Social emotional wealth is a type of wealth that is non financial, and is the wealth that the family accumulates when family members push goals that are family centered and non economic, like the goal of maintaining harmony within the family.

or raising the reputation of our family in the community where we operate on maintaining a strong identity between the family and the business or giving a job to the next generation of family member. You can measure this. There are scientific studies that I also published that measured this accumulation of social emotional wealth.

And of course this is another important aspects that explain how difficult it is for these individuals to detach themselves for them from the business. Indeed, when you ask them to sell the business, very often due to these they tend to give you a price that. It's very much, much higher than the fair price, fair market price.

It's also called [00:27:00] psychological ownership. Then of course, there are other issues associated with the gaps that you have between the incumbent and the successors in terms of. Cultural gaps because you are talking about very often people that belong to different generation. Think about the millennials.

They are digital natives. They are used to playing with the social media. They are used to travel, speak multiple languages. And if you compare them with many, previous generation leaders, completely different. So there are cultural gaps, and this leads to clashes that need to be managed. But there are also motivational gaps because from a motivational viewpoint, one thing is true.

funding a business and a different thing is inheriting a business. So also these gaps need to be managed and that could go on with a few further. So there are a number of actually risk factors that prevent succession and that, lead to the statistics that we know that are Pretty much [00:28:00] similar in the different geographies, whether, you in North America, in Europe, in Latin America, in Asia  I'm lucky enough to work in different geographies and I can tell you that the issues are always the same.  

Mahan Tavakoli: There are some of those same challenges that organizations face and you addressed some of how to overcome them. One of the issues I would love to get your thoughts on more is the question of. Competence in that there is a lot of stories around whether the person, becomes the CEO people in the organization, the sentiments are, they wouldn't have gotten there if their last name wasn't fill in the blank.

What do the best do? In order to minimize that, there's going to be an element of that all the time. What did the best do to minimize it when family members want to play an active role in the operations of the organization? 

Alfredo: That's a very good [00:29:00] question. There are some best practices that can be employed.

You're right. Definitely. That when you have a family member where you have a certain name, sometimes you have to consider that you are stigmatized. Because the employee will be seeing you as the son or the daughter of the boss. And so it's even more important that you try to legitimize as much as possible yourself.

So there are things that can be done. For instance, first of all is clarifying what are the entry and the promotion criteria, right? If you are able as a family to say, okay, if a family member was to enter this business, you need to have a number of years of experience outside the family business. You need to, to possess this background, this degree, these things, these help you start, creating some sort of legitimacy and also disciplining the pattern that family members would love to follow.

That's one thing. Another thing is when you make decisions like the decision to appoint the next successor, best practice, for instance, is to create the panels where you involve also [00:30:00] outsiders. Outsiders could be family business experts, family business, I'm serving on some boards or other Family entrepreneurs, not just because, not because, not so much because outsiders are better at making the decision than the family members, but because the outsiders being less emotionally attached to the business are perceived as those that would make a better decision.

And so this helps to increase, if not the distributive justice, at least the procedural justice around the process. Then of course structuring formal training programs for family members to train them and not only to become good managers. Sometimes, I'm working right now with the family and the wise older generation men always says my, if I look at my grandchildren, they are amazing managers, very well trained in the best schools.

But I can hardly see one great entrepreneur there. [00:31:00] And of course it's provocatory, but I think it's very much right. So also thinking about what are the patterns, the training programs that we can put in place as a family, that also helps. You should make as much as possible. You should create as much as possible the condition to have the overall perception, both internally and externally.

Also, if you consider key customers, key suppliers, key banks, key funders, that, this new generation of family members. Are there not only because of their surname, but because of their merit. And so also creating job profile, making sure that merit will become the main pillar. And this is difficult because of course there is something called family altruism.

Family altruism is a type of Altoid that is directed toward those that are tied, was through blood ties, but not to others. [00:32:00] And this sometimes came. put us in a very difficult situation. For instance, I recently discussed in a, in the main Italian newspaper the big mistake that Italian entrepreneurs make when they confuse equality with equity.

In thinking about succession, myself, I am a father, right? If I think of my kids, I would like probably to do everything equal, right? But I know that they are different. They differ in their willingness, efforts they want to put, and they differ in their ability because some are more smarter, some are more competent and some are less, and I know that the right decision, even if it's difficult for the prosperity of the business would be prioritizing equity, not equality.

Just to give you an example, 

Mahan Tavakoli: that's, As you said, it is very hard to do. . Yes. It's very emotional. 

Alfredo: That's another key point. What fascinates me a lot about family firms is that their behavior is not rational oftentimes, yeah. It's [00:33:00] their behavior is very often more, emotions and lots of emotions. And this is something that you, many decisions, you cannot understand them if you don't consider these aspects. And so you have to play with these emotions. Emotions can be positive, like love, but can also be negative, like envy, like hate.

And it's a very emotional process. 

Mahan Tavakoli: So what role can family offices play in helping family businesses manage over these generations? 

Alfredo: Family offices, I think, can play today a very important role because what my research showed is that if yesterday, if you were very good at at the operational business side, You were a successful family entrepreneur.

Today, more and more you need to be able to balance the corporate or business soul with the Paton soul because today we cannot give for granted. I speak very often with these families and they say, I'm very worried that we are destroying our Paton. They, we are not able to [00:34:00] preserve it, if not grow.

And so you, what they say is that you need to have an ambidextrous. Family capital is model where you need to, balance the patrimonial soul with the business soul. And so the family office can be very useful because the family office of offers to you a structure that allows you to take care in a professional way of the patrimony.

When I say patrimony, I don't say only financial patrimony, of course, the financial patrimony, but also the social emotional wealth, not just the financial wealth. And the family office can also be the right locus where you can address some very delicate decision. And a family office it's a, because it adds to the family governance and the business governance that we discussed before.

Another important aspect, which is wealth governance. It makes sure that you are, creating KPIs, creating metrics that allow you to understand how good or bad you are taking care of this. And of course, when a family [00:35:00] decides to set up a family office, there are many possible choices. You can decide to create your own single family office.

You can decide to, start working with a multifamily office. You can have a single family office where the family is fully involved and fully controlling it. Others say, no, we want outsiders handling it. So the operational solutions can vary. But can be very helpful to take care in a professional way of the patrimony of the family.

And sometimes we are led to think that you need a huge patrimony in order for the family office to make sense. The, for the creation of the family office to make sense. Actually, it's not completely true because sometimes when you start having go, also a patrimony that is not that big, still the family office can be very useful because can fulfill many other goals or roles like the one of cultivating the next generation, the one of educating the next generation, for instance, to [00:36:00] the value of money.

I've been working with a family that's asking me, my, I have reached spoiled next generation members. They really do not respect money. I want an educational pattern created through the family office that can, can sensitize them toward the importance of respecting money, the value of money.

That money is because money also money. is good, but too much money is not always good. There is research showing the issues associated when you are too wealthy psychological mental, et cetera. I think a family office at some point in the development of a family that evolves towards the galaxy becomes a very important organization.

Mahan Tavakoli: Now, one other thing I would love to get your thoughts on Alfredo is I've been fascinated for the past half a dozen plus years with how exponential technologies, most specifically AI, are speeding up cycles of change within [00:37:00] organizations. You're more familiar than I am that 500 has been dropping drastically.

Where do you think that impact will either benefit or be a disadvantage for family owned businesses? How do you think exponential change and technologies will impact family businesses? 

Alfredo: That's a very important question. I think on the one hand, there is probably some resistance in first answer because why?

Because typically the family member Family members are very powerful. They have a high discretion. They have, some scholars talk about personalism, just to indicate that the business is the person or the group of people. Now, what happens is that, of course, when you embrace this kind of technologies like AI, somehow you have to renounce some of this power, right?

[00:38:00] Because this technology make everything easier, everything more inclusive, everything. At the same time, I think that it's the disruptor, the disruptive innovation of this era. So they cannot ignore it. And so I think at the end of the day, these kind of technologies will create the situation where the non family members will become more and more needed for these families, because more and more, what was originally sometimes kept even tacitly in the mindset of a very restricted group of people will become more and more available to a broader one.

I don't know whether as compared to non feminine enterprises, the impact of AI in feminine enterprises will be higher or lower, but what I can say is that it will be, for sure high also within feminine enterprises. And I think that there is also generational aspects. So now we are living.

a massive wave of generational transitions [00:39:00] because the generation of baby boomers who founded or inherited their companies in the previous era, let's say era are now forced to hand it over to the next generation of millennials. And we know that millennials are all very good with AI. So I think the next generation will be the real driver of that.

So many real kind of impactful projects and activities related to AI are happening and will be happening simultaneously with the generational transition. So succession and the AI disruption will go hand by hand in my view. 

Mahan Tavakoli: That succession is a really important part of the success of family organizations moving forward.

My two cents on it, Alfredo, is that in many instances, the family owned, controlled organizations that I know are slightly more hesitant to embrace [00:40:00] Transformative change. On the other hand, the ones that are innovative will be able to transform a lot faster. So I use the example, even though it's not family owned, in that when Starbucks wanted to introduce instant coffee. No one other than Howard Schultz, who had been the founder of Starbucks would have been able to justify and do that. So when you want drastic transformation, you need to have credibility with the organization, the family owned companies where. The founders, the family members, second, third generation, see the need for transformation, more people within the organization will be willing to follow that.

Therefore it requires that understanding of the technology and wanting the transformation. 

Alfredo: I think you are absolutely right. And now that you spoke, I was thinking about [00:41:00] what I call in some of my published papers, the ability and willingness paradox of family firm innovation. So my research shows that family firms are characterized by a higher ability to innovate, because when it comes to innovation, family members can act quickly, they have the power to act, they have an internal social capital that is very high, they speak the same languages, etc.

Yet a lower willingness to do and so very often they get stuck because they have higher ability and yet lower willingness. And I think it's exactly that. If you want to unlock the innovation, the potential of AI in family firms, you have to work especially on the willingness side because that's where they will stuck as compared to non family counterparts.

So it's very much consistent with the explanation that you gave. 

Mahan Tavakoli: Outstanding. The audience is willing and want to know where they can find out more about your book, Alfredo, and follow your work. You're constantly doing this research, which, as I said, I found [00:42:00] myself fascinated in and kept going deeper and deeper with your work.

Where can the audience follow your work? 

Alfredo: My work, if it can be followed, for instance, on LinkedIn, I used to post many of the things that they continuously produce, in in that channel my book I think it's a book, what is interesting about this book, if I can spend a couple of words, is that it's a book that draws on a lots of research and experience, but it's written in a very simple way and it's very practical.

So every chapter as what I call we call me and my co author, Emanuele Arondi, action boxes. Yeah. Action boxes are activities. Every chapter is full of these tools, things that families have to do. Then they have reflection points for families. They have, key questions for guided reflection, as we call.

They have a key learning points and they can, easily find it either in Amazon to Amazon or to Blackwell all through the Pearson website because it's published with Pearson Financial Times. So it's at [00:43:00] some point after working for so many years and after publishing other books that are mainly books for academics and for Scholars, I said, I want something that really everyone needs to needs to understand where I can distill in a very simple way of the things that I learned, all the frameworks, the tools, the processes, the documents.

So it's full of examples. So they can easily get it. And and yes, and I hope that also the, those who will get it I would be happy also to get feedback and whatever. It's, there are also some, renowned and less renowned entrepreneurs who wrote forwards and endorsement for this book.

for different geographies, including North America, of course. So I'm really looking very much forward to, seeing how it will be received this book. 

Mahan Tavakoli: Yes, absolutely loved it, Alfredo. So to tell you my brief experience, when I saw the publisher, I saw the title. At [00:44:00] first I was like, ah, family business.

I don't know. I've worked with some family businesses. I worked in a family business. And then when I started reading your book, I was so fascinated because as you said, First of all, it's very transferable, very practical, very actionable, and it's a book. , I was hoping the family businesses I had worked in and with could have read.

So I highly recommend it, absolutely loved it. It's both well written and very practical as well. And. Open the door for me to a lot more of your research, which I encourage the audience, both to read your book and follow your work. Thank you so much. It's later on in the evening, after a full day of teaching Alfredo, absolute joy, having this conversation with you.

so much. Alfredo DeMas is. 

Alfredo: Thank you so much, Amanda. I also enjoyed [00:45:00] very much this conversation. So thanks for inviting me. It was a true pleasure. And I hope that your audience will also appreciate it. Thank you.