If you read my post earlier this week, you will see that I began to explore the keys to effective leadership in a family business, and that one of those identified keys is a deep understanding of the family business’ culture.
Effective leadership does not, of course, rely solely upon cultural understanding, and one of the most prominent features I see in effective leaders of family businesses is versatility. By “versatility,” I mean that a leader can modify his or her behavior depending on the circumstances at hand. If the situation calls for focusing on strategy, a versatile leader will be able to do so effectively… and then switch to being more operational when circumstances demand such a shift.
This support for versatility is certainly not mine alone – there’s some powerful research that supports this claim. An article from the Summer 2003 issue of the MIT Sloan Management Review reports on a research study where senior leaders were assessed in terms of their versatility as well as their organizations’ effectiveness. The correlation between versatility and effectiveness indicates that approximately 50% of what separates effective leaders from those who are not effective is versatility. In other words, while versatility is not the only factor that contributes to effective leadership, there is nothing more important. If there is only one other factor – and reason suggests that there are multiple other factors such as industry experience, functional knowledge, and cultural understanding – then at best that one other factor can only be as important as versatility. If there are multiple other factors, then this research suggests that each of them would be less important than versatility.
In your personal experience with family businesses, what do you see as other key characteristics of leadership?