Why it Matters
The most successful family businesses require leaders across the family – and not just in the role of CEO, Chairman……
During an informal conversation with the scion of a multi-generational family business, among others, the discussion touched on the matter of succession. This concern, had kept the family focused on the its’ immediate challenge, over who would run the business with the looming retirement of the CEO / Owner / Founder.
Important as this immediate concern was, however, it was key during the conversation, that we steer him to appreciate the appropriate depth required to tackle the subject of succession planning, More so considering it’s an extensive and multi-faceted issue. Effective succession planning, can’t be tackled comprehensively without considering the issues of good corporate and family governance and the familys’ strategic planning.
In talking about succession ~ again ~ he focused almost primarily at the idea of “a successor.” And yet, the reality is that the most successful family businesses require leaders across the family – and not just in the role of CEO, Chairman etc. The families require individuals to lead family meetings, to take up special projects, they need family members to set leadership examples to the younger generation, in the company, in the community etc etc.
Family Business Leadership – #3 Turn-Key Traits
From this, and other conversations, that we experience quite often. These three main traits seem to recur with almost predictable frequency. A combination of these three traits, seem very often to provide the ingredient for one to successfully perform leadership roles in a family business.
And so, though not in any particular order, it is critical that an family business leader possesses a combination of;
- a strong sense of self-confidence;
- an ability to create their own definition of success [which may conflict with the views of other family members] and;
- the skills to work with family –and non-family members – to do whatever is necessary to keep the family business thriving for generations.
Next Challenge – is how to instill the Traits
While these three main traits “can be explained to,” the Next Generation, “one can’t understand it for them.” And so the greater challenge for the family is to instill these qualities in successors – the next generation.
Self-confidence: In our experience, I have found the wealth of the family often denies successors of the opportunities to develop self-confidence. Many an opportunity are lost in not learning self-confidence, a journey which involves coming to grips with “who we are,” and “what we are good at.” A worthy life-skill earned [largely ] when one experiences obstacles and challenges, and learns how to overcome them. In family businesses however, children are often protected from failing or saved from having to overcome their failures by having their problems solved by the family wealth, other significant ones and even by the parents.
And so…… to develop self-confidence: We can support successors to develop a sense of self-confidence by giving them an honest sense of who they are in the world. This accurate feedback is important to enable them appreciate what they are doing well and what they need to work on – a reality check on gaps. In addition, paying them market rate is key. Overpaying them may erode their self confidence, and under-paying them may make them resent the family business.
Creating an Internal Definition of Success; From a young age, successors are often rewarded for taking an interest in the family business, rather than pursuing what they are interested in and/or are passionate about as individuals. While this happens quite subtly initially – a parent returns from work and is still talking about what happened at the family business – overlooking what their children are interested in or thinking about. Over time, when this happens again and again, the only opportunity a child has to relate with their parent is through taking an interest in the family business, even if it is not what they are interested in.
Even the business interest demonstrated “the side hustle” by a successor, away from the established family business ~ isn’t bad ~ its diversification!
And so……to Develop an Internal Definition of Success: We can help successors with this task by letting them explore their interests, and allowing them the freedom to choose the family business. Even “that hustle” business interest away from the established family business ~ isn’t bad ~ its diversification! “A family is better off allowing innovation, even if its not immediately understood in the now.”After-all, isn’t the family the “cradle of entrepreneurship?”
When successors are caught in the game of trying to fulfill their parents’ definition of success – often even when they lack the skill-set and interest – its’ not always the best for them nor for the business. Encouraging successors to work outside the family business, and gain valuable work experience can be a great way to spur this process along.
People skills; Just because one has the technical skills to succeed, doesn’t mean their successor has the leadership skills to do so. Some families do very little to prepare successors on how to manage the complex personal relationships faced when owning a family business. These people skills demonstrated in the ability to resolve conflict, build support for ideas, and understand [their own and others] behavior are a significant life-skill.
And so……to develope People Skills; It would be easy to say parents can best teach this when “leading by example,” but often parents weren’t taught these skills either. Successors can learn these skills through Education in a formal / structured family business programs; one-on -one Coaching to provide focused help and guide a successors growth, and Peer Support – through regular meetings of a group of peers who are interested in supporting the growth and development of that family member.
While for some, these traits appear second nature, for others it helps to invest more intensely in character building, through inspiration. Ask any enterprenuer, for instance, about who set the bar for them, and most likely, you will hear the name of yet another enterprenuer, a historical figure, a writer, even a fictional character. Now this is more the reason during the family rituals, the gift of a suitable book still rates high in some families. And so while discussing the family rituals to observe in 2018, we shared with you five different places in Nairobi Central Business District [CBD] where i usually find suitable books with a common theme – remarkable people.
IN THE END, it is clear that for a family to thrive for generations, it must invest in the next generation. Build their self-confidence, instil a sense of what it means to be successful and give the next generation the people skills necessary to succeed. In this lies a combination of ingredients for the next generation to fulfill the true role of a suitable family business successor