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Machiavelli: Family Business Management Consultant?

Niccolò dei Machiavelli (1469 – 1527). Portrait by Santi di Tito (1500)
Niccolò dei Machiavelli (1469 – 1527). Portrait by Santi di Tito (1500)

You were not needing your morning cup of coffee to stay awake while reading this New York Times article last week featuring George Cloutier.  The article’s title says it all: “Fire Your Relatives. Scare Your Employees. And Stop Whining. ”
If the reporter on the story, Kermit Pattison, hasn’t considered law as a “Plan B” career in case the “journalism thing” doesn’t doesn’t work out, he should.  The direct examination is terrific.  As it proceeds, it’s not difficult to participate in Kermit’s inner monologue:

Q. What’s your view of fear as a management tool?

A. Fear is the best motivator.

Q. Are you a tyrant?

A. I’m sure many people would view me as difficult. If I ask you to do something and you say, “Geez, I don’t have enough time to do that.” Well, maybe I don’t have enough time to sign your check this week.

Q. You say, “Love your business more than your family.” What does your wife think of that?

A. Well, she loves me, but I’m not sure she would always agree with that. I’m not saying don’t love your family. But if you don’t love your business as much as your family, your probability of success is very much lower. Sometimes you just have to put the business ahead of family considerations.

Q. How many times have you been married?

A. This is my third marriage. But you have to look at it this way — it’s over 63 years. I’ve had a lot of spacing between them.

Cloutier does not come across as terribly warm and fuzzy.  Yet, as one might expect for an expert on family businesses at the end of a long and apparently successful career, he offers useful insight:

Q. You say the best family business has only one member — in other words, fire your relatives. What’s wrong with family businesses?

A. A member of the family, if they’re not carefully policed or indoctrinated by the principle of the business, tends to feel entitled. That entitlement is terrible for morale and is terrible for the business.

Q. What about a relative who’s highly competent and well respected?

A. They should work better than your conventional nonfamily members. If they don’t, parole them. Give them some money to go away.

Say what you will about Cloutier’s approach: at least it’s not wishy-washy.  Yet is he correct that fear is the best motivator?  Samuel Bowles, fellow at The Santa Fe Institute who was mentioned in this January 30 NYT piece by Robert J. Shiller, would disagree.  In a recent lecture, “Machiavelli’s Mistake”, Bowles argues that when the battle for workers’ hearts and minds is lost, productivity suffers.  In this paper, Bowles presents his argument that much of the post-1973 decline in U.S. productivity growth relates to decreased employee engagement and motivation.

So, who is correct?  In the family business, is it better to be feared? Or loved?  If ever there were a post that called for comments, this could be the one.  Please join the KYEstate$ discussion.  Or, participate in the poll:
[polldaddy poll=2708117]

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