This week’s Practitioner features the second of five articles from the FBR Special Issue on advising family enterprise. In this article, “Transitional Leadership of Advisors as a Facilitator of Successors’ Leadership Construction,” Carlo Salvato and Guido Corbetta of Bocconi University explore the possibility of the advisor as a role model in the transition process.
Associate editor Karen Vinton takes it all a step further by highlighting key points from the article and raising related questions for family enterprise practitioners to consider.
Go here for the complete article.
“Transitional Leadership of Advisors as a Facilitator of Successors’ Leadership Construction”
Carlo Salvato and Guido Corbetta
Summary by Karen Vinton, Assistant Editor
Succession – can there be a more popular topic in family enterprise literature? You probably think it’s been done to death! You might also think that the advisor’s role is clear, i.e., work with the family to identify the skills needed in the next leader, facilitate discussions regarding potential next generation successors, work with the agreed upon successor to develop required skills and then facilitate the transition. Sounds like the advisor’s role is relatively straightforward, right?
But… not so fast! This article, which will appear in the September 2013 Special Issue of FBR – the first issue ever devoted to the practice and understanding of family enterprise advising rather than the characteristics and details of the family enterprise itself — explores another role for the advisor. The advisor as role model – or, as the authors put it, “transitional leadership.”
This article, an analysis of four comparative cases, investigates the role of external advisors in developing the leadership profile of next-generation members. Conventional wisdom (and some research) says that the success of the next-gen leaders is based on the wisdom and knowledge transferred by incumbent family leaders. While this is true in many situations, closer observations of advisor–next-gen consulting reveals the essential role played by advisors in co-creating a strong leadership profile.
This role is not confined to formal training of, or consulting on, specific challenges faced by the next-generation leader. On the contrary, the role includes advisors themselves temporarily taking a leadership role within the family firm as chairman or member of the board or as strategic consultants in relevant firm initiatives. Far from being the “neutral,” hands-off consultant, advisors act as role models that potential successors can directly observe and closely interact with. Assuming this role can be a challenge for advisors, whose behaviors are then more scrutinized than the advice they give, but the benefits for next-gen leaders and the family business are considerable.
To arrive at these conclusions the authors conducted a cross-case comparative study, gathering information about each firm and interviewing family firm advisors as well as senior and junior firm leaders. Qualitative analysis of the data revealed the following:
- Advisors can take on a form of temporary shared leadership that supports leadership development of junior leaders with support from senior leaders.
- By taking a holistic or person-centric view of successors’ developments, advisors can successfully facilitate leadership growth.
- Advisors must plan and enact a staged withdrawal from the facilitative role as the successor assumes full leadership.
Based on these cases, the authors develop a model of successor’s leadership construction that is supported by the advisor’s transitional leadership (see Figure 2 in the article).
Advisors and family business members alike will find this article a fascinating examination of the role advisors can play in the succession process. The model has tremendous potential for advisors to use as a framework when preparing to work with a family enterprise facing succession. The model can also be used by family businesses to understand how advisors can play a crucial role in facilitating successors’ leadership development. Interesting quotes from the case studies provide “gems of wisdom” for advisors and family businesses.
After reading this article, advisors will realize the wealth of data that exists within their own consulting practices and how that data can be used to develop and increase their effectiveness as advisors.
To read the complete article, go here.
To read another article from the special issue on advising, go here.
Yours in Practice,