Guest Blogger: Andrew Keyt
When preparing families for business succession planning,advisors often mistakenly narrow their focus to the single individual they deem most capable of running the business upon a CEO’s retirement. But to truly make sure families preserve their core values while maintaining strong corporate governance and sound strategic planning, advisors should make it their business togroom all next-generational family members for unique leadership positions.
Since I began working with successors in 1997, I’ve seen first-hand how so many NextGen family members are ill-prepared to assume leadership roles. But this situation can be avoided if the Now Generation helps NextGen family members develop a trifecta of core traits, namely: self confidence, an internal definition of success, and people skills.
Self-confidence is achieved when someone deeply understands who he or she is and where his or her strengths lie—knowledge essential to navigating the challenges life presents. However, self-confidence is something that must build gradually, from years of conquering—and sometimes yielding to life’s obstacles, starting from an early age. Far too often, however, NextGen members lack self-confidence due to the fact that they’ve been sheltered by wealth, over-coddled by their parents, or a combination of both. But it’s never too late. Through 360 evaluations, mentoring and peer-to-peer counseling, NextGen family members can better develop a sense of their strengths and weaknesses and learn how they can achieve overall improvement.
Many children are pushed towards the family business by parents who actively or passively discourage them from expressing passions of their own. At first, this can be subtle. Parents return from the office with work still present on their minds. Dinner table conversation revolves around the business. The question “How was your day?” is seldom asked to the children, who consequently begin to believe they can only win parental approval by declaring an interest in the family business. Not surprisingly, when grown children finally step into family business ring, they harbor subconscious feelings of entrapment—a recipe for dysfunction and unhappiness. As advisors, we must help NextGen family members establish their own internal definitions of success by encouraging them to pursue personal interests both inside and outside the family business.
Successors are often ill-prepared to manage the complex inter-personal relationship dynamics intrinsic to the family business environment. Those with outstanding technical skills may flounder when it comes to resolving conflicts or understanding workplace behavior—people skills that are essential to running family businesses optimally. And parents cannot teach children these skills through example, if they themselves never learned such values to begin with. As advisors, we must help NextGen family members round out their social skill sets by furnishing them with tool chests of communication and conflict management strategies, while giving them a forum with which to practice these skills, before they officially assume leadership positions.
In conclusion, family members must generously invest in the next generation if they expect successors to advance a legacy of integrity and value. And this demands a contribution of time, money and energy needed to fortify NextGen family members with the support they need to become outstanding successors of their family enterprise.
About the Contributor
Andrew D. Keyt is President and Executive Director of the Loyola University Chicago Family Business Center–the U.S. Chapter of the Family Business Network, which was recently recognized by Fortune Small Business Magazine as one of the top family enterprise educational institutions. Keyt is also President and Founder of Keyt Consulting, a consulting firm serving family businesses. Specializing in working with families on conflict management, succession planning and next generation development, Keyt is also a Fellow of the Family Firm Institute. Andrew Keyt can be reached at email@example.com.