Are Heirs the Right and Proper Successors?

Evolution theory argues that a next generation successor has none of the leadership genes of their parent[1]. But that’s “good news.” The company will surely need a different kind of a leader in the future.  Non-family organizations often have the curse that everyone in top management thinks the same.

Further, if it’s known to the successor that he/she has different genes, they more like will have the humility to learn their weaknesses and to surround themselves with what they need. And the company really wants to support a humble family successor as they really want the company to continue; so does the family.

But there’s more to leadership competence than a leader’s genes and self-knowledge. There’s also personal style. Here, too, very successful organizations eventually hear the disadvantage of homogeneity of people. On the other hand, family members typically have a very diverse set of styles. They can bring all that natural diversity of thought to the benefit of the business.

Family firms benefit from another competence usually bred into family successors. As the next generation likely grew up near and around the family business, they have picked up lots of “idiosyncratic knowledge” over all their years. Successors report the learning they had over dinner of understanding people, building relationships, seeing the long-term perspective, appreciating the history, and taking risks. Of course they have also been in the particular values of the family and the business.

There are surely scores of examples of incompetent and inappropriate successors. But, for the most part, family succession seems the right and proper course.

[1] I am grateful to Professor Nigel Nicholson of the London Business School for his ideas and writings on evolutional psychology and the family business.


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