“Play nice and share!”
As a child growing up, this was a frequent refrain in our home. My parents were instilling in us
important values. However, that
egalitarian mantra can, at times, carry forward in an unhealthy way into
opportunities for leadership of the family business. That egalitarianism and sharing –which can be an important
value to many families and which can be important to the success of many
families and organizations – is not the best way to select a leader. Sharing the mantle of leadership in the
family business may not always be in the best interest of the family, the
business, or the ownership.
The role of CEO brings unique challenges and complexities
for which not everyone is suited.
Yet, all too often, family members jockey to each have a turn as
CEO. “You had your turn, now it’s
my turn” is not a succession plan.
For a business family that desires to build a legacy and
grow profitably well into the future, the following guidelines have proven
helpful in ensuring that the most qualified individual is leading the business:
1.
Develop a Family Employment Policy that encourages
family members who desire a leadership role to gain work experience outside of
the family business and specifically defines the objective criteria necessary
for employment and leadership.
2.
Nurture mentoring and coaching between the current CEO
and the next generation of leaders.
3.
Clearly define, in writing, the job description for the
CEO. Identify the expectations and
metrics to which he/she will be held accountable. This should also include the knowledge, skills, and
abilities expected in the role, as well as a commitment to the family’s values
and objectives. Have the senior generation guide the process of selecting their
successors before they leave.
4.
Seek the support of non-biased, third party
perspectives in evaluating and selecting the next CEO. This may mean soliciting input from
non-family directors or members of the advisory board or from qualified advisors.
5.
Be open to a non-family CEO for a season if a family
member is not ready to assume leadership.
6.
Set the CEO up for success. Develop a communication structure and a governance system
that efficiently and effectively outlines the processes for the family, the
ownership, and the business to keep focused on the correct goals and
objectives.
7.
Revisit these guidelines annually.
As a family, commit to a process that will find the most
qualified leader for your family business.