The Next Generation - 4 Tips For Embracing Leadership Roles in Your Family Enterprise
Listen to Dr. Ivan Lansberg who teaches family business at the Kellogg School of Management share 4 tips with the next generation on how to create opportunities for themselves in their family enterprise in the long run. It is important for the rising generation to explore their aspirations, and assess if those aspirations will be met in the family business. Gaining outside experience will help build confidence and competencies as well as help determine whether or not the family business is a fit for the individual
In order to find yourself you need permission, first from yourself, but then from your family to go out there and explore the world and frame your own point of view. Explore what your own strengths are, nurture your own dreams and aspirations, and then explore the family enterprise in the context of that aspiration. Families that do this well create opportunities for their children early on to get a feel for what the family enterprise is and the opportunities it offers. At some point they say to their kids, “Ok you know what this is about, go out there look at the world, try different things, make your mistakes out there, do some learning, go to places where your last name makes no difference at all. And then at some point we would love to have you back under certain conditions, you have to meet certain standards.”
It is very important for sons and daughters of business families to understand that if they aspire to positions of leadership in the family enterprise they will be tested. And I do not mean tested in sort of a formal school-ish way, I mean tested in the sense that other people are going to ask themselves, “will we be in good hands under the leadership of this next generation?” And there are multiple ways in which you could provide an answer. The first one and most obvious one is you got to build up your résumé. Real jobs with real accountability particularly early on in careers are essential. Work outside in a company that has nothing to do with your family, make your mistakes there, and the beauty of that is that people will tell you the truth. If you are working in your family company right from college, what happens is that people treat you gingerly and you never get effective feedback on how you are doing your job because they either love you or hate you and there is a lot of noise. And if there is noise in the feedback loop then your ability to move yourself up a learning curve gets compromised, and in fact you learn slower. So if you go out there, make your mistakes, get real data, and then integrate yourself subsequently is a very good idea.
Some of the most interesting cases of effective successors I have seen are those that harness a circumstantial challenge, a division that may be in trouble or a tough job nobody wants to take. When their parents are trying to protect them and, you know, move them away from that risk, in fact I say go for it. Obviously I am not talking about reckless, you know, assignment of responsibilities, but you cannot earn authority unless you expose yourself to the risk of failing, that is just the way it is, because your constituents, the people who are ultimately going to make a judgment call about whether they are going to be in good hands under your leadership are tracking what you can actually do, not who you are but what you can actually do. So it behooves you to take on opportunities where you can clearly demonstrate that you have the capacity to turn a nasty situation into a profitable one. To actually deliver value to the organization in tangible ways that can be measured and admired by people who actually see the result of your labors.
If you are going to succeed at the challenges that leadership roles offer, it I think, is essential that there be an alignment between who you are as a person, what you aspire to do, what challenges you pose for yourself, what aspirations you have, and the opportunities that family enterprise offers you, there has to be an alignment. What happens too many times, is that people go into family companies for the wrong reasons, because I feel a burden of obligation, because my parents forced me to it, or because I am worried that my parents are going to feel betrayed if I pursued another path, if I want to be a scientist or a lawyer or an artist or whatever. And people then take on these roles without the hard core of conviction that this is what they want for themselves. And the consequence of that is if your heart is not in it, other people will see through it very quickly. It is essential for effective leadership that there be an alignment between the person and the broader objective of the enterprise and this does not close, by the way, the possibility as that person assumes leadership, they can actually tweak the enterprise in the direction where the alignment can be greater. Because we often think of the enterprise as if it were fixed and concrete, and it is not, that is the whole point of being an owner is to make what you own be symbiotic with what you aspire to be and what you want, the life you want.