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Welcoming the Next Generation of Leaders With Family Business Succession Planning

Next Generation of LeadersOne of the most challenging steps for future success is family business succession planning. No two firms have the exact resources, challenges, or insight as others. That doesn’t mean that family business succession needs to feel impossible. 

No family business is immune to the pitfalls facing public companies. That becomes especially true as the original set of directors steps down. We review how we offer practical continuity planning with experienced advisors. Seamlessly transitioning from one generation of leaders to the next can be challenging. Learn how Positively People can provide the best options for family business consulting.

Start While Family Members are Young

Many firms wait until younger family members finish college to invite them in. By then, it could be too late for them to feel welcomed or even interested. Instead, it’s best to begin while they are still in high school. Providing summer jobs, college internships, and other inclusive methods can help keep teens engaged.

Family governance should play an integral part in these activities. This helps younger members feel inspired by the brand without having emotional investments. Waiting until after they graduate college can create a risk that they’ll take other opportunities instead. Offer your firm professional family business advisory with our experienced counselors.

Expose New Hires to Every Aspect of Business

Think about when you began your career. Did you stay with the first role? Or did you have experience in several areas to find your place? Implementing a rotational program for younger members allows them to explore different departments. They may find that they fit well in some areas but not as much in others.

The downside to these programs is that it takes advanced planning efforts. It may take time to develop a practical curriculum for these participants. When this is done properly, you can find young members taking ownership of the family brand. You’ll want to ensure the next generation can take over without missing a beat, and we can help.

Encourage Executive Shadowing Programs

Many established directors complain that incoming members aren’t sure how to act effectively. They also do little to prepare them for the intricacies of the brand. While education is important, so is a working knowledge of daily operations. Degrees alone can’t prepare even the wisest board member to understand everything.

Newer directors should also shadow several established executives to gain deeper insight. This lets them see how things currently work and where improvements can happen. Skills and learning can only go so far in keeping brands successful. Give your next generation the tools they need to become influential members.

Don’t Put Age Limits on New Members

While we typically think of the next generation as younger, that isn’t always true. Some families introduce older members as they are needed. It becomes vital that your training and shadowing programs don’t become age-based. Even universities have much older students attending than in years past.

Leaders should be sought out not by their age, but by experience and passion. Avoiding age-specific descriptions can also prevent accidental discriminatory actions by the company. Anyone can improve their education and prove themselves at any age. Focus on the metrics that truly matter.

Implement Future-First Training

Too often, new executives are trained to do things just like the prior generation. These same firms also often complain that they aren’t adopting new ideas or directions. Instead of only focusing on how things get done, ask how they will be later on. Asking candidates how they envision the brand a decade or more from now helps.

New members should also feel comfortable analyzing new opportunities and threats. After all, they will eventually make tough decisions without the current board around. Having a rigid sense of tradition can hurt incoming members. 

Teach Boardroom Etiquette

No matter the industry, younger members often lack social etiquette, especially in the boardroom. That fear includes both how they conduct themselves and how others are treated. Including these members in industry-specific activities exposes them to people outside of the organization. That includes clients, customers, partners, and suppliers who often work with the company.

Another hurdle is getting feedback across in a respectful and practical manner. Those new to the board might not understand when someone is helping or insulting them. How a new director carries themselves is something a textbook can’t teach. Give the next generation of leaders the resources they need to push the firm further.

Observe New Leaders Without Smothering Them

It can be challenging to watch members make mistakes and not correct them. Other companies often fail to stay involved when the incoming leaders take over. There is a balance that needs to be met to ensure new directors learn. Observational roles should be filled by experienced members to instill proper expectations.

Even if these leaders aren’t taking on directorship roles, including them in meetings will still matter. They get to see how the organization is managed and what metrics are needed. Including others in the boardroom helps to demystify daily operations. 

Create a Family Business Investment Fund

What if these new members are ready to take over but choose a different direction? How can you encourage them to make better decisions for them without alienation?

Something that your company can include is an investment fund. This will offer resources to future generations to pursue other opportunities without leaving. Your brand can even incorporate their business into the family as parent companies. This keeps them close, and it can enhance your current operations.

Branching out into new divisions with talented young members is something worth investing in. Give your future generations what they need to pursue their passions.

Begin Family Business Succession Planning Today

It’s never too soon to start charting your family business’ future. Give your future directors what they need most by working with Positively People. Learn more about Positively People services.  Contact us today for a consultation.