BOOK REVIEW
Working with Emotional Intelligence, by Daniel Goleman. New York: Bantam Books, 1998. 383
pp., $25.95 hardcover.
Daniel Goleman has written two runaway
bestsellers. He’s the toast of the talk show book
circuit and the current guru on how we handle
ourselves in relationships. He was a science writer
for the New York Times for 12 years and is now
the CEO of Emotional Intelligence Services in
Sudbury, Massachusetts.
What does his most recent book, Working
with Emotional Intelligence, have to offer family
business consultants and people who work in fam-
ily firms?
In Working with Emotional Intelligence
Coleman has expanded a chapter from his first
book, Emotional Intelligence: Why it Can Matter
More than IQ (1995), and created a workbook for
applying concepts of emotional intelligence to
the workplace. Although he does not specifically
talk about emotional intelligence in family busi-
ness, it is clear that his observations can be rel-
evant for the intense relationship systems of fami-
lies who work together.
The book is divided into five parts. In Part
1, Goleman explains the difference between the
threshold skills that get a person in the door when
applying for a job, the basic cognitive intelligence
(IQ) and expertise expected of an applicant, and
the emotional intelligence that makes for a star
performer (p. 15) in the workplace. He believes
that excellence in any job requires more than just
threshold skills, and that emotional intelligence
is crucial to outstanding workplace achievement.
Part 2 describes in detail the 12 specific in-
dividual emotional capabilities that Goleman
believes are essential to star performance, and
Part 3 outlines 13 key relationship skills that make
the difference in how people get along with each
other at work. In Part 4, Goleman describes his
approach to training for emotional intelligence,
and in Part 5, he discusses what it means for an
organization to be emotionally intelligent.
For the purposes of this book, Goleman’s
composite individual definition of emotional in-
telligence is “. . . the capacity for recognizing our
own feelings and those of others, for motivating
FAMILY BUSINESS REVIEW, vol. XII, no. 4, December 1999 © Family Firm Institute, Inc.
ourselves, and for managing emotions well in
ourselves and in our relationships” (p. 317). Al-
though the book is about functioning in the work-
place, he approaches this topic from the indi-
vidual, rather than the systems, point of view.
This is a distinct limitation, because it does not
offer the reciprocal relationship context that we
might consider as essential for a discussion of
work systems.
Working with Emotional Intelligence is written
in an easily accessible style. Replete with examples
from hundreds of companies Goleman has vis-
ited throughout the country in the past 3 years,
it has a personal anecdotal quality that brings his
ideas to life and makes them immediately under-
standable. He doesn’t break new ground in the
situations and experiences he describes, but he
collects them and makes sense of them by con-
structing an individual model for thinking about
how the workplace operates.
Working with Emotional Intelligence reads like
a well-organized workbook with lists of personal
and social competencies and “Guidelines for
Emotional Competence Training.” Personal
competencies (p. 26) include self-awareness
(emotional awareness, accurate self-assessment,
and self-confidence); self-regulation (self-control,
trustworthiness, conscientiousness, adaptability,
and innovation); and motivation (achievement
drive, commitment, initiative, and optimism).
Goleman explores and defines these individual
characteristics in detail through anecdotes and
research studies in Chapters 4, 5, and 6.
Goleman describes the grounding of these
characteristics in evolutionary theory and brain
research. For example, he comments that “. . .
humans are the primordial team players: Our
uniquely complex social relationships have been a
crucial survival advantage . . . Some evolutionary
thinkers see the key moment for the emergence
of interpersonal skills as the point when our an-
cestors moved from treetops to life on the broad
savannas — when social coordination in hunting
and gathering paid huge dividends” (p. 199).
375
 He also explains the difference between auto-
matic emotional responses that come from the part
of the brain (the amygdala) where our deepest emo-
tional memories are stored, and thoughtful, well-
considered responses that derive from the “think-
ing brain” (neocortex) where we keep track of an
enormous amount of social data such as social cues
and group dynamics. (p. 200) Under stress, the
amygdala can bypass or “hijack” the neocortex and
push individuals into automatic responses that may
not be in their best social interest.
The social competencies (p. 27) described by
Goleman in Chapters 7, 8, and 9 include empa-
thy and social skills. Empathy—the awareness of
other people’s feelings, needs, and concerns—is
a crucial starting point for any balanced relation-
ship. However, Goleman’s discussion of this con-
cept comes across as “emotional overfunctioning”
in which there is such an intense focus on the
other person that it might sometimes be hard to
see the self and the other as two separate people.
In a family business where relationships are al-
ready intense, the boundaries between awareness
of the individual’s emotional state and that of oth-
ers is important to maintain, and empathy must
be tempered with a clear definition of self.
Goleman’s discussion of social skills or “. . .
adeptness at inducing desirable responses in oth-
ers” (p. 27) has a manipulative ring to it. How-
ever, his continuing inclusion of the “awareness
of the feelings of others” softens the impact, and
he frequently offers caveats that provide a more
balanced view of the concept. For example, hav-
ing focused on “the arts of influence” (p. 163) in
business leadership and asserting that “nice guys
finish first” (p. 188), he then notes that leader-
ship also demands “a certain toughness” (p. 190).
In another example, he states that “. . . cross-
functional teams work together for the larger
good of the organization, [but] each member re-
mains beholden to a constituency back home”
(p. 225). He goes on to note that “. . .
overallegiance to the home base can have disas-
trous effects for the team.” As these examples il-
lustrate, Goleman continually searches for bal-
ance in describing effective behaviors in the work-
place. A systems view of leadership and team al-
376
legiance would move beyond these dichotomies
toward the integration of a complex range of re-
ciprocal functioning within which the individual
strives for a definition of self.
Many aspects of the book can be useful to
family firms. Goleman presents a balanced view
of a number of controversial topics. For example,
when discussing gender issues, he notes that there
are “far more similarities than differences” (p. 7)
in the emotional intelligence of men and women.
He also writes about the delicate balance of open-
ness in a work team: “Too easy a consensus risks
a low-quality decision, while too much conten-
tion results in a lack of unity and resolve” (p. 220).
In addition, he talks about the “. . . emerging
nature of loyalty, (balancing) allegiance to one’s
own goals and to the web of one’s working rela-
tionships” (p. 121). Again, as noted above,
Goleman moves toward issues of self-definition
without a systems orientation to encompass the
larger complexities of the workplace. Individu-
als in family business confront the same chal-
lenges of balance and loyalty as they seek to de-
fine themselves within the context of both fam-
ily and business.
Goleman’s “Guidelines for Emotional Com-
petence Training” (pp. 251–253) are somewhat
disappointing. Throughout the book he often
remarks that emotional intelligence can be
learned (p. 240), but the components of his train-
ing guidelines do not seem to break any new
ground, and I wonder exactly what happens in
training for emotional competence that makes it
so learnable. His training model starts with as-
sessing the job and the individual, delivering
those assessments with care, gauging readiness,
and motivating the learner. The next steps in-
clude learning to make change self-directed; fo-
cusing on clear, manageable goals; preventing
relapse; giving performance feedback; encourag-
ing practice; arranging support; providing mod-
els; reinforcing change; and evaluating. Each of
these components has useful “caveat” and a “best
practice” recommendations.
Goleman does not fall into the trap of the
many business trainers who recommend a “quick
fix” to business problems. Goleman knows that
change, particularly in the area of emotional in-
telligence, takes a long time, and he recommends
lots of practice. He also notes that the most ef-
fective training is self-directed, and he encour-
ages trainees to define their own goals and change
outcomes.
There is an almost magical aspect to the way
he describes the impact of his training. He knows
that cognitive learning about a competence is not
the same as mastering and internalizing the com-
petence (p. 242), yet he quotes a participant after
an emotional competence training session as say-
ing, “I’d never encountered anything like this
before. This was the missing piece . . . The pro-
gram has changed (my) life. I see how my emo-
tions were controlling me. Now if something is
bothering me, I talk it over with my business part-
ner, write it in my journal, talk to my field vice
president right away. I let them know I’m upset
—I don’t let it fester. I’m more accepting. I real-
ize you can have all kinds of emotions, but you
don’t have to let them run you.” (p. 238)
Isn’t this too easy? Can everyone really learn
and change this dramatically? Aren’t there vari-
ables that affect one’s ability to learn, such as per-
sonal history, the individual’s family, the multi-
generational emotional process, life experiences,
and other individual factors? Couldn’t there be
limits to the individual’s ability to enhance emo-
tional intelligence? What would determine those
limits? What about the inevitable variations
caused by external stress? What about the his-
tory of the business as well as the personal his-
tory of the employee?
Goleman talks about emotionally intelligent
organizations, but doesn’t explore the interface
between individual emotional intelligence and the
climate of the workplace as an emotional system.
Nor does he discuss unpredictable factors, the
variations that occur within emotionally intelli-
gent organizations. For example, a family busi-
ness might function in a calm, emotionally intel-
ligent way until the founder becomes ill and suc-
cession issues loom. Then it can be extremely
difficult for a business to hold on to even well-
established patterns of emotional intelligence.
Some family businesses can restabilize fairly rap-
idly following a transition in leadership, while
others cannot. What are the factors that contrib-
ute to restabilizing? This is a question that de-
mands a broader view of business as a reciprocal
system with a complex history of relationships.
In his conclusion, Goleman observes:
To be sure, emotional intelligence is no
magic bullet, no guarantee of more mar-
ket share or a healthier bottom line. The
ecology of a corporation is extraordinar-
ily fluid and complex, and no single in-
tervention or change can fix every prob-
lem. But, as the saying goes, ‘it’s all done
with people,’ and if the human ingredi-
ent is ignored, then nothing else will
work as well as it might. In the years to
come, companies in which people col-
laborate best will have a competitive
edge, and so to that extent emotional in-
telligence will be more vital. (p. 315)
This is Goleman’s strongest contribution:
He empowers those of us who believe that the
human relationship component underlies all
other aspects of business success and failure. He
reaches his conclusions bolstered by a mass of
research studies, data, direct observations, in-
terviews, and anecdotes. He validates what we
all know intuitively, but haven’t researched with
his thoroughness.
I wish that Goleman had addressed the is-
sues of work systems more broadly and had pre-
sented emotional intelligence in the context of
the workplace as an emotional unit. However, I
value the rigorous work he has done and the con-
tribution he makes to humanizing organizations.
Family-firm members can gain much insight
from reading this book if they accept the fact that
their own complex historical emotional context
will not be addressed. Like IQ and expertise,
emotional intelligence might be a threshold skill.
The challenge of understanding the workplace
as a complex emotional system lies beyond this
threshold.
KATHARINE G. BAKER
PRINCIPAL, WORKING SYSTEMS
WASHINGTON, DC
377
Sustaining the Family Business: An Insider’s Guide to Managing Across Generations, by Marshall
B. Paisner. Reading, Massachusetts, Perseus Books, 1999. 214 pp., $26.00.
Introduction
Marshall Paisner is a successful entrepreneur and
founder of a family business. The Boston Globe rec-
ognized his family business in 1988 for its total
commitment to customers. In 1994, Inc. Maga-
zine/MCI awarded his family business the Posi-
tive Performer Award, which recognizes superior
customer focus. Paisner’s business, ScrubaDub,
was also featured on CNN (1995) and MSNBC
(1996) and is a recent recipient of the Blue Chip
Initiative Award for the State of Massachusetts.
Paisner initially set out on this work as a la-
bor of love for his grandchildren. He wanted to
share with his grandchildren his excitement for
his family business and help them to decide
whether they wanted eventually to join the busi-
ness. As he worked on his essays, he discovered
that his entire adult life had been dedicated to
building a successful business that could be passed
on to his children. It was then that his essay for his
grandchildren turned into this book.
Passing it on
The book opens with the story of a former family
business owner named Jack who the author met
while golfing. Jack had recently received and ac-
cepted an offer to sell his business, freeing him
and his wife from their business and financial wor-
ries. Having been in similar circumstances of re-
ceiving sizable buyout offers, Paisner knew the
temptations of such a proposition. Nevertheless,
the author resisted such offers in favor of passing
the business onto his sons. He acknowledges that
despite the desire of many founders to perpetuate
their family businesses, there are many challenges
that stand in the way of a successful future. Draw-
ing from numerous sources, Paisner cites the so-
bering statistics of family business succession, for
example: “In the past three decades, less then 30
percent of family businesses in the U.S. have made
it to the second generation before changing hands,
and less than 10 percent have reached the third.”
He further notes, “In 1996, the acquisition of pri-
378
vate firms reached an all-time high, totaling nearly
$80 billion. This represented an 84 percent in-
crease over 1995, and made up 12 percent of all
U.S. mergers and acquisitions for the year.”
Many studies focus on the impending transfer
of wealth in America (often estimated at $10 tril-
lion) with the aging of the population, in particular
the Baby Boomers. Much of this wealth transfer
will be in the form of family businesses. Paisner
believes that, like Jack, many family business own-
ers will accept offers and sell their businesses be-
lieving that “they would be nuts to turn down the
generous offers they receive.” Convinced that more
than just money is lost when a family business is
sold, Paisner presents research that illustrates the
loss of the business’s private qualities in terms of
being family owned and managed as well as how
the community and local economy loses.
Paisner encountered many of the same prob-
lems that family businesses struggle with in plan-
ning for succession and sought useful information
and guidance. He found little substantive help from
attending seminars and reading literature. He
sought the advice and knowledge of consultants,
academics, lawyers, tax specialists, and other busi-
ness owners he respected. Paisner finally arrived at
the conclusion that if more family business owners
shared their information, they could recognize that
there are alternatives to selling the family businesses
for an offer that seems too good to refuse. This was
another reason for writing the book.
This book offers guidance, valuable insights,
shared experiences, and transferable ideas. Fam-
ily business owners, members of the family, pro-
fessionals, and others drawn to this book by a de-
sire to see a family business succeed into the next
generation should enjoy the unique look inside
this family business.
Key Messages
Paisner structures the chapters of this book and
their key messages in a manner consistent with
Habit 2 of Stephen R. Covey’s inspiring book, The
FAMILY BUSINESS REVIEW, vol. XII, no. 4, December 1999 © Family Firm Institute, Inc.
7 Habits of Highly Effective People: begin with the
end in mind. According to Covey:
To begin with the end in mind means
to start with a clear understanding of
your destination. It means to know
where you’re going so that you better
understand where you are now and so
the steps you take are always in the right
direction.
Paisner’s direction is quite clear: his desire to
help others to create “a legacy of opportunity” for
themselves, their families, their community, and
this country by preserving, enhancing, and enjoy-
ing the true value of a family business.
The book is divided into 10 chapters. The first
seven focus on key ingredients, planning, pro-
cesses, incremental change, and strategies that
promote an eventual successful succession of a
family business. These chapters offer key messages
on 1. Creating a Family Culture that Promotes
Business Succession, 2. Managing Across Genera-
tions–The Power of Participative Management,
3. Building a Business Culture that Can Survive,
4. Managing Family Conflict, 5. Developing Tax
Strategies, 6. Developing Estate Strategies, and
7. Who Should Name the Next CEO?
The value of the key messages of the book’s
first four chapters cannot be overstated. All too
often, the work of family business owners, their
financial advisers, lawyers, and other profession-
als is wasted if it focuses solely on tax strategies,
estate strategies, and other financial concerns of a
family business seeking to succeed to the next gen-
eration. Saving taxes and assuring liquidity is not
a guarantee for success. Focusing on tax saving
strategies and acquiring products such as life in-
surance to assure liquidity are the equivalent of
using a larger hose to fix the leak in a pool. Family
businesses whose owners have not focused on or
have chosen to ignore the lessons that Paisner of-
fers in the first four chapters are doomed.
In these first four chapters, Paisner offers a
plethora of valuable ideas and suggestions, includ-
ing the following:
• Using dinnertime at home to teach ethical
values through positive business experi-
ences
• Communicating to the next generation
that the market value of a family business
is only the score of the game and not the
goal
• Planning to avoid the need for “an offer
too good to refuse”
• Establishing rules governing entry into the
business by family members and account-
abilities once in
• Relaxing the hold on the reins through a
participative culture and consensus man-
agement
• Empowering through teams
• Understanding the importance of keeping
people informed, formal training, setting
expectations and accountabilities, and mea-
suring performance
• Creating opportunities and rewards for
nonfamily members
• Understanding the importance of family
business plans and family meetings
• Understanding the importance of renew-
ing the business, reinvestment, managed
growth, and new technology
• Understanding the importance of inspir-
ing a shared vision
• Seeing family conflict as an opportunity
and taking the “conflict cohesion test”
• Understanding the value of an outside
board of directors or advisors
Paisner shares with the reader how he and
others have applied the above ideas. Through these
stories, Paisner leads the reader through the ap-
plication of these ideas, the challenges of imple-
menting them, and their ultimate benefits. Paisner
ends up presenting (in particular to the reader who
owns and operates a family business) a case study
that is truly valuable in that it contains the experi-
ences and insights of someone who has actually
worked with these ideas and strategies.
Tax Strategies
The fifth chapter deals with the development of
tax strategies. Paisner aptly points out that the U.S.
system punishes the formation and preservation
of capital. Furthermore, he notes that few busi-
379
nesses could withstand the punishing effects of
paying out estate taxes that represent 50% or more
of their fair market value. Despite recent tax law
changes, specifically the Taxpayer Relief Act of
1997, the demand for liquidity to meet taxes at
the death of family business owners on transfers
to the next generation challenge the succession of
these businesses. Paisner also notes that the mar-
ket values of some industries have skyrocketed due
to recent market run-ups and that family business
owners have been encouraged to capitalize on this
by selling out to consolidators.
Paisner’s thought-provoking proposal for
changing the tax laws is to distinguish between
the market value of a family business and what he
refers to as its “inherited value.” Paisner refers to
the Internal Revenue Code Section 2032(a), which
allows “special use” valuations on some farms and
business real estate versus the fair market values
applied on these assets for purposes of calculating
a taxable estate. Paisner then suggests that the tax
code should recognize that family businesses be-
long in a “special use” category as well. Under his
proposal, “estate taxes would only be calculated
on the book value rather than the market value if
the business were passed on to another family
member.” He believes that the time is ripe for leg-
islative changes in tax laws.
Wealth Independence
Although many successful business owners are fi-
nancially successful, it is not uncommon to find
that they are not financially independent of their
businesses. Paisner offers several methods for cre-
ating wealth independent of the family business’s
value, including the following:
• Qualified retirement plans (e.g., profit
sharing and 401(k))
• Nonqualified plans (e.g., supplemental ex-
ecutive retirement plans [SERP] and de-
ferred compensation)
• Generating rental income from family lim-
ited partnerships and limited liability com-
panies
In the sixth chapter, Paisner discusses devel-
oping estate strategies for the family business.
380
These strategies include keeping ownership in the
hands of those involved in the business, freezing
company stock value, employing the use of a “col-
umn” system for passing on stock, dealing with
the issue of children not in the business, and the
use of a “deadlock trustee” as a built-in mediator
for the family business. Once again, Paisner gives
the reader an opportunity to see through the eyes
of a family business owner and how he dealt with
these often challenging and thorny issues. He de-
tails the use of financial tools and techniques such
as trusts, stock redemption agreements, and life
insurance.
The Next CEO
“Who Should Name the Next CEO?” is the title
of the seventh chapter. Paisner shares the method
he employed in his own business to tackle this is-
sue. Fortunately, his method was successful. Both
of his sons accepted it and agreed on issues sur-
rounding decision making and the right to appeal
to a deadlock trustee. Paisner also offers insights
for preparing heirs to take the reins of the family
business as well as into his process of stepping out
of the way and what the new CEO needs to do
once the choice is made. He encourages the se-
nior generation to share with the new CEO their
ideas on what the job requires, while emphasizing
in the process that it is the new CEO’s right to do
things differently. The new CEO should create
his or her own vision and strategic plan for the
business and put these in balance with well-
thought-out financial controls.
When to Sell
In the final three chapters, Paisner discusses when
selling the family business makes sense and how
to navigate a successful sale. He also offers tips on
“really making the most of an offer too good to
refuse.” An obvious proponent of keeping the fam-
ily business in the family, Paisner exhibits a depth
of understanding and clear explanation of the
methods that can be employed to sell a business
and how to protect the parties involved. He is very
clear in his recommendation that a family busi-
ness owner seeking to sell his or her business
should retain a competent and experienced invest-
ment banker, adding, “This marketplace is no place
for amateurs.” The book contains a significant
amount of information useful to the family busi-
ness owner planning to sell his or her business.
Specifically, Paisner warns the owner to avoid
unilateral offers, typically those of a consolidator,
offers advice on document preparation, and
stresses the importance of retaining key manage-
ment throughout the sales process.
Core Values and Beliefs
Paisner concludes his work by sharing his core
values and beliefs about the family business. He
remarks, “When a family business gets passed from
one generation to another, the transaction cannot
be compared to the buying of a business on the
open market.” He further states, “ . . . in a re-
sponsible and caring family culture–the direct
opposite of our competitive business culture—
those inheriting a business accept it as a loan to
grow and nurture and then loan to the next gen-
eration. They don’t regard themselves as sole own-
ers of the company.” Following this belief, a gen-
eration finding it necessary to convert the family
business to cash would share the proceeds of the
sale with all living members of the family that par-
ticipated in the business’s growth. This sharing
would follow logically from the understanding that
the efforts of each previous generation contrib-
uted to the business’s value when it was sold. The
author distinguishes between the legal and moral
culture and rights within the family-owned busi-
ness, offering the observation, “ . . . [the] idea of
inherited legal rights is part of the American value
system that has gone astray.”
In closing, Paisner shares the story when he
and his son Dan, his grandson Mat, and three of
Mat’s friends enjoyed a day of sailing and fun on
Cape Cod. Paisner suggested that he and his son
simply rearrange their schedule to make the day
possible. In the midst of enjoying the day, Dan
remarked, “Where else but in a family business
could this day have happened?”
Dan’s words exemplify the value of the family
business that the author so strongly stresses in this
book.
Conclusion
This book presents the key ingredients for a suc-
cessful transition of a family business from one
generation to the next. It offers the unique op-
portunity to share the experiences of an actual fam-
ily business owner who has applied much of what
he has learned to ensure that his family-owned
business would not only survive, but thrive.
As a financial service professional, business
advisor, and amateur psychologist, I would highly
recommend this book to family business owners
as well as other professionals wishing to gain in-
sight into family businesses, their true value, and
the key factors that make a succession between
generations of owners possible. I am certain that
this book will serve as a valuable resource to any-
one working to ensure the growth and success of
the family business as well as nurture the relation-
ships of all family members touched by these busi-
nesses.
I am grateful to the author for his extensive
research and insights on this subject as well as to
his family for sharing their experiences. It is readily
obvious that this book and the lessons it contains
have been enriched by the willingness of the
author’s family (wife, daughter, and two sons) to
share pieces of their lives as well. This sharing can,
and will, make a difference in passing on the val-
ues and value inherent in a family business.
THOMAS H. WARING JR., CLU, CHFC, MSFS
WARING FINANCIAL GROUP
HAMBURG, NEW YORK
381