The Dynamics of Leadership in a Private Business: A Conversation with Kerry Sulkowicz, M.D., Founder of the Boswell Group

June 21, 2019
In the feature article of this issue of Owner to Owner, we sit down with Kerry Sulkowicz, M.D., the founder of the Boswell Group, to discuss the challenges leaders face, the complexities of leadership in private and family businesses and the common qualities he has seen in the best leaders.

Assuming a leadership role can be an exciting, rewarding experience; however, it also comes with a host of challenges and, for some, an inherent feeling of isolation. Enter Kerry Sulkowicz, M.D., who has looked inside the minds of some of the world’s most renowned leaders for more than two decades. Trained as a psychiatrist and psychoanalyst, Dr. Sulkowicz is the founder and managing principal of the Boswell Group, which advises boards of directors, CEOs and other executives on the psychology of leadership and helps them address their anxieties, interpersonal relationships and company culture. We recently sat down with Dr. Sulkowicz, who also advises the Partners of Brown Brothers Harriman on effective leadership, to discuss the challenges leaders face, the complexities of leadership in private and family businesses and the common qualities he has seen in the best leaders.

Brown Brothers Harriman: Tell us about your background and how you came to work with business leaders.

Kerry Sulkowicz: A few determinants came together and informed my career choice, both from my family history and the present.

Growing up, I was always reading biographies of political leaders. My parents were both Holocaust survivors from Poland who survived the concentration camps and immigrated to the U.S. as refugees. While they didn’t talk much about their experience, I was aware of what they had gone through. Because of that, I had this purely emotional interest in understanding how leaders got large groups of people to do good and bad things. That planted the seed of my interest in leadership.

Fast-forward, and after medical school I became a psychiatrist and psychoanalyst. I went into full-time private practice, which I enjoyed, and thought that was how I was going to spend my career. However, I was unhappy feeling stuck in an office all day, and it became clear to me after a few years that it wasn’t a great fit for my temperament. I was too restless for that and needed to be more engaged with the world.

I also had an interest in entrepreneurship. I started a small business back in the early 1990s that ultimately failed but was a great learning experience, and some of my patients were businesspeople, so I was interested in the world of work and business.

All of this was on my mind when I had an experience at a cocktail party in 1995 that changed the course of my career. I met the CEO of a startup, and he started talking to me about how he was struggling to figure out what it meant to be CEO, as well as a couple other issues related to dynamics among key stakeholders and cultural tensions with international investors. When he finished talking, he asked me when I would be able to start advising him on his business. I told him I thought he was out of his mind and that he really needed help from someone who did that for a living! He said that my bluntness and honesty made him want to hire me even more because no one talked straight to him now that he was a CEO.

That interaction made me realize there was an opportunity to bring a clinical perspective to serving as an advisor to leaders who, because of the inherent isolation of their role, often don’t have anybody to talk to inside their company. He became my first consulting client, as opposed to patient, and it was really a turning point.

BBH: Within your consulting practice, what areas do you focus on?

KS: We cover a range of topics, including challenges CEOs are facing personally, navigating their interpersonal relationships from their management team and board of directors to external individuals who they may be negotiating with.

We also discuss succession and the process of developing successors internally or recruiting them from the outside. Succession planning always has to be going on because nobody stays in a leadership job forever.

The other area we look at is culture. We talk about the influence of a leader’s behavior and values on an organization’s culture. We also look at it from the perspective of how a leader can shape culture and address aspects that may be interfering with the optimal functioning of the business.

BBH: What are some of the biggest issues leaders face, and how can they overcome them?

KS: Leaders have all sorts of problems and challenges. The nature of true leadership roles is that, as qualified and experienced as these people are, nothing fully prepares them for the top job. There’s an inevitable amount of on-the-job learning. Some of them are founders, and they start off at the top, while others work their way up over time. In either case, leaders are confronted with situations of uncertainty and ambiguity daily, which is one of the biggest challenges they face, and the best leaders embrace and thrive under those conditions.

Leaders are also faced with the challenge of communicating their vision to an increasingly diverse, broad group of internal and external stakeholders. They’re charged with operating in a world in which there is greater transparency, as well as in an increasingly globally connected world, which requires some fluency in a range of cultures and across time zones. In addition, leaders have to deal with a flow of information that is unprecedented. The capacity of the human brain to assimilate information has not evolved nearly as quickly as the amount of information we receive, so there are limits to what leaders can process.

BBH: Is leadership in a private business unique vs. in a public business?

KS: Some aspects of leadership in private businesses are unique, and others are universal. In terms of the most fundamental aspects of leadership, which are really informed by values, a sense of purpose and the ability to inspire that in others, that’s the same in any kind of organization.

There can be a much longer-term view in private businesses without the demands of meeting quarterly financial projections, and that can be a luxury for some private business owners. It can also be a source of frustration in terms of not having access to the same sources of capital, but there are still many virtues to remaining private.

In the case of family businesses, there are some unique aspects to leadership in terms of the family dynamics that enter the picture.

BBH: Can you talk a little more about family business leaders and some of the complexities they face?

KS: Some of the specific challenges have to do with the phenomenon of family dynamics being played out on the stage of the business.

When there’s a family business, it often affects the next generation’s ability to go out and live autonomous, emotionally healthy lives. Sometimes kids get the message that they have no choice but to work in the family business, and that’s unfortunate. To be able to choose to do so can be wonderful, but to feel a sense of obligation, even if you don’t have that much interest, talent or motivation to do that, can be a problem. So, one set of challenges relates to how the family business leaders can invite and welcome family members in, but not impose it on them.

Succession is one of the biggest challenges. The majority of family businesses fail at the transition from one generation to the next, and often the reason for that is that the leadership isn’t necessarily passed on to the best person to run the business, who may or may not be a family member. I believe that businesses should be run by the person most qualified to do so. If it’s a family member, that’s great, but if not, that’s fine, too. Sometimes family ownership with professional management is a better way to go than family management. Every situation is unique. If one generation gives the leadership role to a family member in the next generation when in fact they should be bringing in nonfamily management, that can be a recipe for failure. Family businesses need to have some difficult conversations about who is really most qualified to lead the company and occupy other key roles. Sibling rivalry is a very real thing in any family, and not necessarily an unhealthy thing if it’s tempered. But it’s not a leap to see how sibling rivalries can play out in unhealthy, competitive ways within a family business.

Family businesses need to have some difficult conversations about who is really most qualified to lead the company and occupy other key roles.  

BBH: How can the CEO in a family business take a step back and re-evaluate what is required of a leadership position when there is a generational transfer?

KS: Some of the very traits that lead to a founder being successful can also create some of the challenges that a business experiences years later, when that founder is nearing retirement. Some founders have a great deal of trouble letting go, and there are many complicated psychological reasons for that. So much of their identity and self-esteem is wrapped up in the company that they sometimes feel that nobody can possibly succeed them and run the business.

Talking about mortality is an unpleasant topic, but it’s necessary for founders to come to terms with the idea that they’re not going to be around forever and that if they really care about leaving a legacy, it may be their primary responsibility as they near retirement to consciously help choose a successor and let go. Because these people have such large personalities, sometimes letting go means really letting go, so that they don’t overshadow and undermine the new leader. Even if they’re retired, they still wield a lot of moral authority within the company.

BBH: Are there biases often at play in succession and choosing a new leader? How do you overcome those in selecting the most qualified person?

KS: Yes, there are absolutely biases. One is the idea that the successor needs to be just like the founder. It’s a natural assumption to make, but it isn’t true. No one can be like the founder, and the business may be in a very different place in its life cycle compared with the early days when the founder was doing it all. You may need somebody with a different skill set and personality to run the business successfully in the next phase.

On the other hand, sometimes founders and boards can lean too far in the other direction. Seeing that the company has grown and become more corporate, they may pick someone who is really more of a manager than a leader, and you wind up with a bureaucratic, overly process-driven person who can destroy the business.

There is no formula for this. Every business is a living organism that is different, and every family, if it’s a family business, is different. Each situation needs to be looked at uniquely based on the business context and the qualifications of the family members, with the ultimate goal of finding the right person for that time and for where the business is heading in the future.

BBH: Our society tends to be increasingly focused on leadership. Why is followership just as essential as leadership?

KS: We so overvalue leaders in our society that there is this popular idea that everybody needs to be a leader. Taken to its logical conclusion, if everybody were a leader, we’d have absolute bedlam. The role of leaders is to inspire followers, so what we need are a few really good leaders. We also need to normalize the idea of good followership. It’s not something that’s inferior to leadership – it’s actually necessary. Leaders are not leaders without followers.

BBH: How can leaders avoid the inherent isolation that comes with being at the top?

KS: I don’t know that it can be avoided altogether, but it needs to be acknowledged and responded to accordingly. There are many virtues to being at the top of an organization, but the nature of power dynamics is such that it inhibits the flow of information and of people coming to the leader from deeper down in the organization, especially with bad news. Leaders can make that better or worse. They can make it worse by not recognizing it or by being arrogant, autocratic or regal, which shuts down communication even more. Or, in recognizing the inherent isolation, leaders can be more active in making it safe for people who work for them to come to them with any news – both good and bad.

Having an open door policy is great, but even the term alone suggests it’s too passive – leaving your door open suggests you’re waiting for people to walk through it, but you actually have to walk out of it and go to people throughout the organization and make yourself a little vulnerable. Ask for feedback, and make it clear that when you get feedback, especially critical feedback, that you are accepting of it without a punitive or retributive response. That’s a way to bring people in and make them feel safe telling you what you need to know.

Leaders also need to recognize that in addition to being isolated, they’re under constant scrutiny by virtue of their role. That is not necessarily a bad thing. In fact, it can be a force for good if leaders recognize that how they behave and treat others is being closely watched, and it’s an opportunity to model how they want others to treat their co-workers. Getting leaders to recognize the emotional power of their role is important.

BBH: Speaking of how you treat others, why are business leaders today increasingly finding themselves needing to take moral leadership stances?

KS: I have been thinking about that a lot recently. Some of the best business leaders throughout modern business history have done this, so I don’t want to suggest that this is an entirely new phenomenon, but the state of the world today is increasingly polarized. No matter what side of the political spectrum you’re on, there’s a general sense that politics is more divisive than representative, and there’s a sense that in some government offices, there’s a failure of moral leadership. It’s against that backdrop that some business leaders feel drawn to take moral leadership stances that transcend what might otherwise be seen as the normal boundaries of their role. Employees don’t necessarily want their leaders to take overt political stances, but they often want them to speak out on the issues that matter to their businesses, particularly global issues, such as trade policy, immigration and climate change. For leaders to address some of those issues and to use their role to get involved at a higher level is not only good for their business, but also inspiring to many employees.

BBH: Does being a leader at one company mean that someone is destined to be a good leader at another company or in another context, such as politics?

KS: Not necessarily. Some leaders can successfully make the transition, but that is not always the case. Leadership is highly contextual. Forget about going from business to politics, even when going from one business to another, where the culture could be different, there’s no guarantee that somebody will be successful in making that transition.

BBH: How does one become a leader? Are they born or created?

KS: There is no singular path to leadership. It is not simple, and given that leadership is so personal and psychological, it would be naïve to think that one becomes a leader simply by going to business school or reading the latest best-seller on leadership, though those are both good things to do.

The roots of the best leaders that I’ve seen can be traced back much earlier in their lives to the crucible of childhood experience. Some leaders, for instance, underwent some particularly difficult experiences in childhood and were drawn into a precocious leadership role in their family structures first, long before they ever became a CEO. Those are very formative experiences that then get carried into adulthood.

BBH: Are there certain qualities in leaders that tend to have a correlation with success?

KS: Leaders are all different from one another, but there are some common denominators that I’ve seen in the best. These include a passionate sense of purpose and vision for where they’re going and a deeply rooted sense of morality and values. Another quality is intelligence. That doesn’t necessarily mean getting good grades, but being intelligent in a broader sense. The capacity for empathy is also vital in the best leaders, both empathy for the people who they are leading and empathy directed outward toward customers and other stakeholders. Another is a sense of drive and resilience – the best leaders I know find obstacles are challenges to be surmounted rather than get them down. Self-awareness is also important – having some sense of how one is perceived and what one’s limitations and weaknesses may be.

Another is a sense of drive and resilience - the best leaders I know find obstacles are challenges to be surmounted rather than get them down. 

BBH: How do great leaders deal with personal weaknesses?

KS: Making themselves vulnerable in acknowledging their imperfections is important. Then, it involves having the humility to recognize that they need help in areas where they either aren’t so good or don’t have the time or interest, whether that is working on their own skills or hiring others to help. Leaders don’t have to do everything themselves, and the best ones surround themselves with talented, smart people who share their values.

BBH: How can co-leaders set themselves up to be successful?

KS: The accepted wisdom about co-heads is that it is fraught and not a good idea. I wouldn’t go that far, but there are potential complications, the main one being that if those two people disagree or have divergent visions, that can be confusing – and in some cases, paralyzing – to an organization. It can work, but it takes two special individuals who have the capacity to deepen and build trust along the way. They need to have an exquisite ability to communicate with one another and resolve conflict, and they should have clearly defined and distinct roles. Sometimes you see organizations with co-heads, and it seems like the organization is divided into two camps, which is dysfunctional. It’s contingent on the quality of the relationship of the two people at the top.

BBH: Do you see this come up in family businesses?

KS: I do, and that often leads to a poor outcome. If the relationship is high-quality, it can work. However, if the patriarch who is trying to choose a successor has the idea that it would be less conflictual to appoint two members of the next generation to be co-heads rather than making the difficult decision of choosing one, that often does not work. The founder has essentially avoided a conflict and left it to the second generation to fight it out, which isn’t good for anyone.

BBH: People are increasingly working remotely these days. Do you think it’s difficult to have leaders in a business if they’re not in close proximity to one another?

KS: There is no substitute for face-to-face interaction inside organizations. Having said that, the world is becoming more globally connected yet geographically dispersed. In particular, large global companies have executives that sit in every possible geography and time zone, so it would be naïve to suggest that there is something wrong with that.

The challenge for a CEO of a global company is to find ways to bring the team together physically as often as is feasible, and then use technology to simulate as much face time as possible. The highest-performing teams have deep relationships with one another, and you can’t create that via email. Technology is very helpful, but it is not the same as sharing a meal together. There can be very high-performing teams that are geographically distributed. Leaders just need to recognize the challenges and find ways to bring their teams together in creative ways.

BBH: Kerry, thank you for your time and insights.

Interview conducted by Jake Turner, and article written by Kaitlin Barbour.

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