For owners of family-owned businesses, the most important decisions they will likely ever make revolve around identifying and grooming future leaders. As a family business advisor, I have seen more than my fair share of angst occur during the decision-making process over issues such as whether it should be a family or non-family member, who has the right business acumen and personal style, and much more.
When you eliminate all the emotion from the decision — which certainly is quite difficult — it really comes down to whether the next leaders can demonstrate what I call the three Cs:
- Clarity — A vision for the company’s long-term direction
- Courage — A willingness to embrace the leadership role and do the tough stuff/the ability to be a strong and influential leader
- Commitment — A devotion to the company’s mission and goals
However, as most family business owners learn, narrowing their focus is easier said than done.
Too many times to count, I’ve seen owners who want their adult children to take over be shocked when they can’t get them to make the commitment or engage in the skill sets they believe are necessary to be successful. The disconnect, based on what I’ve seen in all my years of family business coaching, seems to be in values between the generations and what motivates each person.
It can be important for owners to answer some very illuminating questions about leadership candidates:
- Do you believe they have the necessary skill sets to succeed current leadership and run the business?
- Do you know what their expectations were in joining the business?
- How would you describe their professional and personal relationships with other individuals in the business and with clients?
- Is there a feeling of resistance or readiness to embrace future trends and make changes in the business while retaining the overall vision for it?
The next generation may have different priorities about “how to do business,” so it’s also important to ensure the big picture is discussed with them. And, owners need to let go of the desire to have a “clone” take over for them — someone who is just like them. There are plenty of benefits to seeing things from a different perspective.
For instance, work styles may not appear in sync — older owners may think a breakfast meeting should start at 7 a.m., while the younger set prefers 8 a.m. or even later. It’s easy to make an immediate judgment that starting the work day later in the morning means a lack of passion, but differences in style may not mean a lack of commitment to the business and its success. It’s best to step back, look at the bigger picture and shift to a learning mindset to more accurately assess the situation.
Above all else, owners should understand what got them to where they are today may no longer work — so there is value to being open to what the next generation has to say. In an ideal situation, the decision to choose a successor does not occur overnight; instead, next-generation leadership candidates are given a good amount of time — perhaps up to five years — to demonstrate their value and connect with employees and clients. In my experience as a family business advisor, having that transition period will go a long way toward ensuring a seamless and successful transfer of power.
Questions about grooming leaders for your business? Contact FPMG today to schedule a consultation.