In a two-part blog post, Family Business Group consultant Stephen P. Miller highlights some key findings from his recently completed research on how next–generation family leaders develop leadership skills.
Engineering a successful generational transition is often the issue that most concerns family business entrepreneurs who hope the businesses they have created will thrive through multiple generations of family ownership. Family firms that develop effective next–generation leaders often employ the following leadership development strategies:
- Ensure next-generation leaders have job assignments with real responsibility, accountability, and risk; inside or outside the family business. Next–generation leaders need opportunities to make complex decisions and experience the results of those decisions.
- Provide accurate feedback on performance, often from trusted non-family leaders in the business. Next–generation leaders benefit from knowing how others perceive their leadership practices in order to learn the emotional and social intelligence competencies that account for over 85% of top leaders’ performance.
- Create a positive and supportive family culture. Families that work hard to foster open communication, establish effective conflict resolution and governance processes, and create an overall positive family climate enhance the chances that next–generation family members will develop leadership skills.
- Start early: Learning leadership skills takes decades, so wise family business owners encourage next–generation family members to gain leadership experience in activities in which they are personally interested in school and early in their careers.
The good news is that leadership skills can be learned. Forward–thinking family enterprise owners focus as much or more on the development of their human capital, including next–generation family leaders, as they do on their financial capital.