Family enterprise practitioners use the foundational belief that our work occurs in the intersections between the business, family and ownership groups.
The ownership group is a unique resource to the business entity because it can contribute diverse forms of capital, governance and a commitment to the continuity of the business through stewardship. Practitioners have a strategic ally within the family owners: the “family champion” (Nacht, 2013)*. I define the family champion as a rising generation leader who acts as a catalyst amongst the non-operating owners to bring them together as stakeholders and to engage in effective ownership. The family champion provides energy, alignment and the inspiration for this group to work together to own the family enterprise in an increasingly complex world. The family champion is the person who says, “We have to do better as a family if we are going to continue to own this business, and I want to do the work to bring us together.” I have observed and studied this role in a variety of family enterprise situations. I consider myself a family champion in my family, and I am conducting my current dissertation research on this role. Practitioners can play an important part in identifying, developing, and engaging the family champion as a strategic resource.
The Role of the Family Champion
The ownership group is a unique context for leadership, and requires a leader who can effectively manage the culture, dynamics and values in the family, often without direct generational or organizational authority. The family champion is not the CEO or president of the business entity; but rather a non-operating owner who takes on a significant leadership role among the family owners. Ownership groups tend to be transitional, multigenerational, geographically diverse, have potentially disparate ownership levels and have all the complex family dynamic issues associated with family enterprises. Family champions are attuned to these various complexities and navigate them well to build trust in their leadership. They are one part strategist, one part diplomat and one part visionary. The family champion role is important whether the family owns the legacy business, or in cases of a family office, still manages collective assets together. As ownership of the business entity gets passed through the family, the size and complexity of the ownership group grows. Due to succession, generational transition or crisis, the family owners will inevitably find themselves needing increased organization and structure for their governance responsibilities.
How Family Champions Emerge and the Role of the Practitioner
In the midst of these transitions and growth, family champions emerge as leaders because they possess certain capabilities and leadership traits that are recognized and supported by the family. They likely have previous personal and professional experience that contributes to their credibility and influence within the family. Practitioners can be aware of owners who display leadership potential. The family champion will be a person who is actively engaged, asks intelligent questions and shows the motivation to make things happen as an active owner. Other family members will trust and be influenced by this person. Practitioners can encourage the emergence of next-generation family members who show an aptitude for leadership; these figures can then be empowered to take on an even more active role as an internal resource for the family. Effective ownership of a firm is an ongoing challenge and requires dedication; family champions actively want to take on this responsibility because of their vision for what the family can do for the business. Practitioners can support the emergence of this person as a way to develop the ownership system and to achieve common goals.
Development of the Family Champion
Family champions are a highly valuable resource because of the unique sense of “familiness” and capital that they bring to their position. Figures in this role require additional development, support and education to achieve their full potential. As highlighted in the recent Salvato and Corbetta article in Family Business Review (2013)*, mentoring and transitional leadership can be a highly effective way that professional advisers work with emerging leaders to help them develop and step into their roles in a more efficacious fashion. While this article focused on leadership for the business entity, the same principles hold true for leadership in the ownership group: role modeling, coaching, mentoring, educating, and providing leadership training are several ways practitioners can help in the development of the family champion.
Practitioners can help the family champion develop effective leadership capabilities that are aligned with the culture and family dynamics within a multigenerational family ownership group. Family champions tend to display a commitment to stewardship through their positivity, hope, and vision for what the family owners can achieve together. Practitioners can help these people develop their listening and communication skills along with empathy, humility and emotional intelligence. Practitioners can also work with family champions to develop leadership skills and credibility. The family champion can develop the skills and wisdom to know how and when to be assertive and when to be accommodating to serve and protect stakeholders. Practitioners can greatly assist in this process through coaching, mentoring and role modeling effective leadership skills. As the family develops its governance structures and organization, practitioners can encourage the family champion role to become more formalized through a position such as a family council chair, family office relationship or leadership seat, and possibly through a board of director position to bridge family and business governance.
Engaging the Family Champion
People in the family champion role see an opportunity to make a contribution to the success of the entire family enterprise system as an owner. The family champion can be developed as an ally and resource by the practitioner to address a range of complexities that exist within family enterprise systems that include: succession and transition issues, governance strategy and managing the complex dynamics of a multigenerational family ownership group. The family champion plays an important part in engaging the challenges and responsibilities of ownership by building collaboration through their leadership. Practitioners can engage and collaborate with the family champion to address changes the family must make, develop collective goals and vision, and create inclusive governance structures. Practitioners can work directly with the family champion as a point person for communication, idea development and strategy. This process helps develop the family champion, adds credibility to the role and makes the job of the practitioner easier and more efficacious because the family champion has leverage within the family to achieve things the professional may not be able to do. This process can add to the legitimacy of the family champion, but care must be taken to ensure that the family continues to endorse this figure of its own accord.
Practitioners who work with family enterprises can engage with the family champion as a strategic ally within the ownership groups of family enterprises. Professionals who are aware of the role of the family champion can recognize the type of person who may be a good candidate, then encourage his or her emergence, help develop this figure’s leadership capabilities and continue to engage them as a strategic partner. Family enterprise practitioners can serve the family ownership system in expanded ways by helping to legitimize this vital leadership role as a key resource within the family.
*Nacht, J. G. (2013). The family champion: The need, nature, and value of a unique role in family enterprise systems. Unpublished manuscript, School of Organizational Transformation and Leadership, Saybrook University, San Francisco, California.
*Salvato, C., & Corbetta, G. (2013). Transitional leadership of advisors as a facilitator of successors’ leadership construction. Family Business Review, 26(3), 235-255. doi: 10.1177/0894486513490796
About the contributor
Joshua Nacht is a Ph.D. candidate at Saybrook University as well as a family business systems steward, scholar and consultant. He holds the FFI GEN Certificate in Family Business Advising. Joshua can be reached at email@example.com.