Succession: How Next-Gens can attain leadership competencies
March 6, 2019
Publicly owned companies like PepsiCo and Johnson & Johnson have talent management strategies for their fast-track employees. Developing NextGen talent within a family business should be afforded the same time, attention and disciplined approach. However, family dynamics and ownership considerations create additional complexities.
For example, a controlling shareholder may want his son to run the business, even if the son isn’t qualified, creating an understandable fissure in the family.
Or consider the example of a daughter of the second-generation leader when she became CEO of a successful food distribution business (one of our clients). Her uncles and cousins struggled with affording her the authority to lead the business through the transformations it needed to remain competitive. Although she was highly qualified and up to the task, her family continued to view her as the little gymnast on the balance beam. They could not imagine her running the family business.
A leadership development plan for a family business addresses can address such challenges. It acknowledges each family team member’s current set of core competencies and aptitudes and those that will be required in the years ahead.
A leadership development plan for NextGens should begin with an honest assessment of their current skills and aptitudes. This should include a self-assessment, consideration of prior performance reviews, interviews with appropriate team members and other elements as appropriate.
Candid discussions about the NextGen team member’s personal aspirations for the future should also occur. All too often, the senior generation makes assumptions about NextGens’ career goals without asking the NextGens what they think.
We also highly recommend that before a family member joins the family business, they spend a minimum of two years, and ideally five years, of working outside the family business.
Then, NextGens also must immerse themselves in the industry. Attend trade association meetings and events, and visit strategic partners to see firsthand how they conduct business, touring distribution channels (for example, if your family business is in the consumer products sector, tour an Amazon facility).
Every family business must identify competency gaps and assist NextGens in developing leadership skills such as:
• Data-driven strategic thinking and execution
• Communication skills, including being an active listener
• Ethical decision making
• Motivating people
• Assessing and developing talent
Leadership development plans are hard work and require objectivity, commitment and flexibility. The benefits of planning and taking time to implement the plan extend well beyond the NextGen members. The payoff is well worth it: a drama-free family business story with a happy ending.