Family Leadership Strategies

13 Secondary parties to the process may include: outside board directors, non-family stockholders with sizable equity ownership, and trusted advisors to the family. We wish to make a distinction here between those who are primary stakeholders – those who are most directly impacted by the outcome of the transition – and those who may have strong interest in the outcome, but are not essential to its success. A general rule of thumb is that fewer voices involved at the outset are better than many, and that those outside the immediate circle can always be informed or even invited to provide input at a later date. Let’s now examine these key roles and the motivations and dynamics often encountered for each. Senior imperatives Senior leaders are the elder members of a family. In our discussion, we will focus on seniors who are in formal leadership roles – such as family leaders or enterprise leaders – and are expected to transition out of these positions into retirement or entirely new roles. What then are the imperatives or concerns most often voiced by seniors? A smooth and effective leadership transition process is particularly important for senior family members in existing leadership roles. All are acutely aware of the immense obligation to future generations, but very few will enter the process without misgivings and concerns. There are few things as challenging as creating or building upon significant wealth, only to relinquish direct control over stewardship of the family and wealth. In the world of business, such transitions are expected and commonplace. For example, CEOs are judged on their efforts to foster next generation leaders and talent. However, within a family enterprise, such expectations are not only less clear, but made more complex by the presumption that a family member – rather than an outsider – will be the successor. Fundamental to a successful leadership transition is the senior’s acceptance that such a transition is desirable for them personally, and is also in the family’s best interests. While some will eagerly look forward to the day, others may display resistance or avoid the topic all together. In these cases sentiments such as: “the next generation is just not ready” are Differing motivations and needs