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Social intelligence, a slippery concept that is nevertheless crucial to family business success.

Your reputation is your biggest asset. Imagine going to work at a family business and seeing the founder’s three adult children who, though they have mid-level management positions, seem to be able to come in later and leave earlier than their peers. How would that behaviour affect your perception of these three? Of the family? You would probably think a little less of them; their reputation would erode in your eyes and probably in the eyes of other employees as well.

Why is this so? Because the only thing people in business can use to assess our character is our behaviour. Your reputation is created by this perception, whether or not it is an accurate portrayal of your character. Therefore, it is important to realise that the way others treat you is according to their perception or interpretation of you and your behaviour. So if this is true, how do you protect the value of your biggest asset – your reputation?

A Lifelong Challenge

The first of the challenges that face the next generation coming from a family business is developing their social intelligence. This challenge is lifelong. Social intelligence may be a new concept and, though it is not intellectually difficult to grasp, it is very subtle and takes time to fully integrate into your life.

Let’s define social intelligence as aligning your character with your reputation. If your reputation is how others see you based on your behaviour, then your character is the true you. Narrowing that gap between the two is the practice of social intelligence. Social intelligence is important for anyone, but there are two very big reasons it is even more important for the members of the next generation from a family business.

First, families are closed systems, which means they are less likely to be open to outside feedback. Families value harmony, and as such they are more hesitant to confront behaviour. For example, if the boss’s son was hired with a CV so poor that no other company would have ever considered hiring him, then those who know about the nepotism will certainly change their perception of this young man.

The second reason that makes social intelligence important for the next generation is that the next generation must understand how to juggle all of their roles. In family businesses, members of the next generation may be new to managing multiple roles: family member, employee, and even owner. For example, leaving work early to play golf with dad might be a kind thing for a daughter to do, but not a professional thing for a mid-level manager to do.

Bad Education

Developing social intelligence isn’t always an easy task. The problem may be caused in part because of education; school and college typically send us the wrong message. They implicitly tell us that if we are technically competent we will succeed in our lives and our careers. Remember in school, if you got the top score on the exam you got the top grade, regardless of whether you were offensive, rude, or just socially awkward.

I knew a student years ago who had practically perfect grades yet he received no job offers after several interviews. He was shocked. Perhaps he felt he had upheld his end of the bargain: he had earned good grades and now he was entitled to a correspondingly good job. Buying into this mindset is a set-up for disappointment, frustration, and failure.

Being technically competent is important but it is only the ticket to get into the game, not the path to winning it. Social intelligence deals with how we do things; it encompasses everything beyond our technical competence, including our appearance, communication style, ethics, manners, conflict management, and time management.

Technical competence places more emphasis on the what – the content of things – and can often focus too much on who is right. Consider how much perception is driven by the relationships and emotions, and you will realise that being right is often not what creates a positive reputation. Stop for a minute and think about the people you have known who have been let go from jobs. Has it been for their lack of technical competence or for their lack of social intelligence?

Reputation = Reality

My estimate is that once you enter the business world your level of social intelligence determines 80 per cent of your success. If you realise that your behaviour creates a perception in others, therefore developing your reputation, then the next step is to realise that your reputation impacts how others treat you. In a nutshell, their perception creates your reality.

The following is a six step process to help you get beyond merely defending your behaviour and to work on aligning your character and reputation:

  1. Consider which role you are acting in: family member, employee, and/or owner. It might be a combination of more than one.

  2. Pick a trait or other behaviour to consider; it can be one that is troublesome (e.g. poor time management) or one that is more neutral (e.g. a strong extrovert).

  3. Step back and analyse the perception this trait could create in others. Be careful not to defend your behaviour; you need to try to step into a stranger’s shoes and see what they might see. In the examples above, others may see you as dismissing the importance of their time, or see you as dominating conversations.

  4. See if that perception is conveying your true character to others. Is your reputation aligned with your character? It is to be hoped that neither of the perceptions mentioned above aligns with your character, therefore you want to develop a plan to change this perception.

  5. Understand how the perception of others can “create your reality.” How might others treat you differently based on that perception (your reputation)? If others perceive that you are dismissing of their time they may evaluate you poorly, be less prone to value your time, or may lessen their opinion of you. If others perceive your strong extroversion as dominating, even rude, they may avoid trying to convey their ideas or opinions, and may avoid communicating with you altogether.

  6. Decide what adjustments you want to make, and then begin making them. With either of the traits mentioned above, sometimes merely telling people that time management or talking too much are issues you struggle with can go a long way toward showing others you are self-aware. If you are perpetually late, calling ahead of time if you are going to be late can help occasionally. One friend I have realised after some reflection that he was late when he thought he could get away with it. So some soul searching can often help here. If you are an overbearing extrovert think about talking less. For example, if you are having a conversation with just one person, talk for less than 50 per cent of the conversation. If you are in a group, make sure that everyone talks at least once before you jump in again.

This is just a brief introduction to the subtle practice of being mindful of your behaviour. Consider how your actions and behaviour affects other people’s perception of you, and in turn how it affects your business reputation.

People can only assess us based on our reputation, so our charge is to make certain that we align our true character with our reputation. That is not only good for business, it is great for our family and personal lives as well.

About the Author - Greg McCann is a full professor and both the founder and director

(1998-2006) of Stetson University’s Family Enterprise Centre. He is also founder of the

family enterprise consulting firm of McCann & Associates which helps families in

transition, with a focus on the next generation.

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