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It's unfortunate that many family businesses don't enjoy the longevity they would like. The statistics for family business ventures reveal that only a handful of businesses make it to the second generation and far fewer last into management by the third generation.
There is a wide variety of opinions on why family businesses don't have the same longevity as non-family businesses, but in my experience as a family business adviser, the root cause of failure for many family businesses is leadership development (or lack thereof).
Many family businesses simply overlook the need for developing leadership skills. The following are some of the issues family businesses face in developing the next generation and how to overcome them.
Family Businesses vs. Corporations
Most established corporations have implemented training programs designed to give future leaders the skills to successfully take over leadership roles. However, these same leadership training programs are rarely offered in a family business. The training provided in most family businesses centers around technical expertise, such as how to make a product or offer a service. As such, these family business trainings don't teach the critical skills necessary to engage and lead others in production or service delivery.
Start outside the business
It's fairly common for owners of a family business to start familiarizing their kids with business operations at a young age, sharing with them the technical aspects and passing over the leadership skills. When working with family businesses, I always advise that the up and coming generation work at other organizations before joining the family business in a leadership role. This will hopefully give the next generation of leaders a chance to learn about leadership, although it may not always happen.
Develop a leadership training strategy
One of the best ways a family organization can encourage the leadership development of its future leader is to engage the services of a business executive coach. An outside resource who has experience working with family businesses can be a critical piece of the puzzle in preparing the next generation to have the skills and presence to engender respect and loyalty, things necessary for successful leaders.
Athletic coaches train athletes on and off the field in a range of technical skills. However, business executive coaches focus less on the “technical” skills and more on enabling future leaders with the non-technical skills they need to lead. Many refer to these non-technical skills as “soft skills.” Let's face it, many people aren't born leaders, so placing a person in a leadership role who doesn't have the right skills can actually harm a family business. As such, the training offered by a business executive coach can significantly impact the success of a business.
Find your leadership style
The primary thing a successful leader must do is to find his or her leadership style, which can be difficult to do on one's own. By partnering with a business executive coach, the future leader of a family business can identify whether he or she is a leader who is:
Autocratic or authoritative;
Delegative or laissez-faire; or
Participative or democratic.
After determining his or her best leadership style, it's often much easier to form a vision, establish values, and successfully earn the loyalty of others. It's imperative that any future leader is intentional about his or her style of leadership, rather than just following blindly in the footsteps of another leader.
How to find the right coach
How do you find the right coach for your business? It's essential that the business executive coach has the proper experience for your business and is able to easily develop a strong rapport with all members of the family business. A good place to start is to ask other trusted family businesses if they've worked with a business coach and who they would recommend.
By bringing the right business coach on board, leadership development can be implemented with excellent results. It's a great way to improve the changes of a family business surviving long into the future.
Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]
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