It’s a big challenge–growing the business to keep pace with the growth of the family. Since most families grow exponentially, that creates great pressure on businesses. The converse challenge is to ensure that the family can grow in their capabilities as stewards of the business as it grows in complexity. Businesses have the advantage over families because they can hire their team, while families inherit theirs.
A few years ago, I talked with the CEO of a family business. He was describing all of the work that he had to do, how much internal development was under way, and how many people he had to hire in order to implement the business strategy. I found myself getting quite jealous, because he could hire the talent he needed when internal development wasn’t enough. Families don’t have this option.
Families have several opportunities to maximize the talent on their team, but in order to build the proper development program the family needs to agree on the following objectives:
- Remaining family owned and controlled
- Being a good partner with the board and management
- Being good stewards of the business
Working with your inherited team: development and education programming
Putting together a development program is one of the strategies required to achieve the family’s objectives.
Provide multiple opportunities to build experience
Revamping the family council may be necessary to create more leadership opportunities. Task forces can be used to pull in many different people and interest levels, and committees help build leadership skills. This also provides growth opportunities for the family council chair, because now he or she is mentoring committee chairs and task force leaders. The policy on visiting board meetings may also need to be revised, and consideration should be given to creating an associate director or long-term visitor policy to create a deep bench of qualified family director candidates.
Focus on individual development
A clear development path should be made for all roles in the family, including family employee, family director, family council chair, committee chair, committee member, family council member, family assembly participant, etc. A clear development path including role and experience expectations creates a transparent and inclusive process. This means that anyone can pursue a given role. The development path may be longer for some roles or some people than others, but it means that becoming qualified for a role is open and accessible to everyone in the family. With a limited pool of candidates in a family, no matter the size, no one who wants to become qualified for role should be turned down. All should be encouraged. With the help of a clear development path and support along the way, every individual should be able to achieve their desired role. Progress can be tracked by a development and education committee in an Individual Development Plan, which includes progress on meeting the desired role expectations, education and required experience, as well as results from assessments, evaluations, and other related activities, like conferences and family business courses.
Focus on group development
In addition to creating opportunities for individual development, the whole family needs to move along the expectations continuum to become better stewards as the business and family grows in complexity. This includes providing education days for the family at family meetings, interaction with and presentations by management, presentations and informal conversations with the board, bringing in outside speakers to family meetings, such as subject matter experts or the family estate planners, trust advisors or accountants. Some families also hire outside consultants or family members from other family businesses to speak at family meetings on relevant topics. Rescheduling a family meeting to run before or after a family business conference also provides an opportunity to increase the family’s knowledge as a whole.
Start now with the next generation
Good stewardship requires thinking for the long term. Start now, and create opportunities for even the youngest current or future shareholders to spend time together as cousins. Have the family or company pay for kids to travel with family council members for meetings. Conduct family council meetings on the weekends so children can attend the social events and spend time together under the watch of sitters. Create a family camp for multiple generations to interact with one another in activities that are kid friendly. Any investment made now will pay off many times over with deep and abiding relationships amongst the youngest generations.