Finding balance in developing family talent
A lot is known about how to help the next generation enter the family business successfully. While each family and situation is different, there are some “exemplary practices” that yield success. For example, internships for next-generation family members during school vacations help them learn about the company and gain valuable experience. And completing a post-high school degree and seeking work experience outside the family business prior to joining full-time build professional credibility.
Once they join the business, next-generation family members can benefit from career assessment and counseling, coaching, mentoring and travel opportunities, all of which can help them develop the full measure of their talents. In our experience, these investments serve both the family member and the business very well.
Yet even as businesses embrace these proven practices, they run into challenges. One common area of struggle for many of our clients is how tough to be with their next-generation members. Given all the responsibilities and benefits that await them, is it most important to set very high expectations, very early? Or do their obligations and responsibilities already weigh so heavily on them that support, rather than rigorous demands, should be emphasized?
This is a worthy question to explore more deeply—one of several “tricky issues” (John Ward, Governing the Family Enterprise, forthcoming) that doesn’t have a clear answer or solution, but should be actively grappled with over time.
Being tough and supportive
We often tell next-generation family hires that whether they like it or not, everything they do at work is scrutinized because of their connection to the family. They must be aware of their work habits, professional appearance, ethics, etc. Although families vary in their approach to this reality, we usually find one of two approaches is preferred:
1. The tough guys: We expect our sons and daughters to be the first ones in the office and the last ones to leave. They will work harder, longer and smarter than anyone else; they are setting the standard. No matter their age or experience, we expect them to serve as role models and to inspire others. When they fall short, they don’t quit or whine; they are expected to redouble their efforts. Any mistake they make will be publicly scrutinized so no one thinks they are “getting a pass.” When they face roadblocks, we don’t adjust our expectations downward; we insist they bring up their game. That’s how we were treated; why would we do it any differently for them?
2. The supportive guys: A necessary ingredient of our long-term success as a family business is helping our kids develop a strong, positive connection with the firm. If we place too much pressure on them too early, we create a negative sense of obligation. They already have the heavy burden of feeling a need to live up to the family’s success. We want our kids to have the freedom to find their own way, explore their own talents and find their own voice, without too much pressure or responsibility too early. When we were young, our folks expected us to show maturity beyond our age, and gave us no choice in our career path. It didn’t feel too good, and we want to do a better job with our kids. We believe that the best way for people to develop is in a setting of encouragement and support, emphasizing what they already do well.
A path to supportive challenge: Clearly, the best approach to talent management combines both support and challenge. There are high standards, but also recognition and encouragement. Setting a professional standard for “Junior” is reassuring to non-family employees. It is appropriate—even necessary—to push next-generation members beyond their comfort zones, so they have the opportunity to prove to themselves and others that they have what it takes. In fact, the best way to develop true self-confidence is through real risk and challenge. Successors who are constantly protected will never know the full measure of their capabilities.
However, in reaching for both support and challenge, the family sets these high standards with great care. They do not assign next-generation family members responsibilities for which they are truly not ready. Rather than throw family members into new assignments with little training or guidance (“they need to sink or swim” is tough-guy thinking), they ensure that mentors and other guides are close at hand. Also, family leaders are careful not to publicly dress down their sons or daughters in order to prove that they are not getting special treatment or with the idea that this will “toughen them up” for leadership. If there are corrections to be made, they are made respectfully, and in private. While some leaders came up in their organization with this kind of “hazing” and thrived, we would suggest that more often than not this approach leads to anger, frustration, fear and disengagement—from both the business and the family.
Development demands vulnerability
Many parents tell us, “We can’t afford for our son/daughter to fail. We have to guarantee that he/she will be successful.” Yet some degree of failure and disappointment is necessary in talent development. If it’s too dangerous or threatening for next-generation members to show vulnerability or make a mistake, how will they develop the full measure of their skills? If you communicate to family members that failure is not an option, you may stifle their willingness or ability to take healthy risks. This will certainly limit their development and could impair the success of the business down the road if they take this mindset with them into leadership.
Another risk with this attitude is that it will lead to a situation in which no one is willing to speak the truth, either to the current leader or to future potential family successors. What if the next-generation family member is really not cut out to lead the enterprise? Perhaps the demands of the business simply outstrip the skills available in the family. When you have built a wildly successful business, this can happen even with a smart and talented family. If all the hopes of future family leadership are riding on this one family employee, and that person and others know the heir is not up to the task, it is essential for all to face the hard truth—which may not be possible if the current leaders have led people to believe the family leader’s success must somehow be guaranteed.
Recognizing and admitting to shortcomings is essential to real learning. It may be particularly important to develop this skill in family employees who could be prone to hubris as a result of their family connection, or have others seeking to flatter them with an overly rosy assessment of their abilities. A culture where people are rewarded for being vulnerable, asking for help and even making mistakes is one where learning and development are richer. Because family employees’ mistakes and failures may be more public than others’, it is particularly important that they be encouraged to face this risk, and celebrated for doing so. Embracing the value of learning from mistakes will lead to a better and more competent family employee in the long run. Once again, this will require a combination of both support and challenge.
One of the toughest parts of coming into the family business is finding someone with whom you can share your doubts, anxieties or questions. Many times, next-generation members’ concerns or questions must be kept confidential. They can’t share a work story over a beer with a friend. They can’t complain about their boss with co-workers. Furthermore, they are told that they are “lucky” and they have it made because of their family—so it is easy for them to feel guilt around any concerns they have. Even with legitimate questions, young people often think to themselves, “Who am I to complain?” While it is true that family members being groomed for leadership are blessed in many ways, it is equally true that they will encounter frustrations, difficult days and bumps in the road like anyone else.
In our experience there is great support to be found in university-based family business centers, many of which have “next-generation” groups or forums. Family members who have attained a leadership position may find joining a group such as Vistage or the Young Presidents’ Organization (YPO) can be a way to meet peers with whom they can share and learn confidentially.
Within the business we often help family employees get paired with trusted, long-standing non-family leaders who can serve as mentors and sounding boards. Sometimes independent directors on the board are willing and able to play the role of mentor and provide some of this support to a rising family leader. Outside advisers can also be a helpful and appropriate sounding board.
We will always encourage families to set clear policies around employment in the family business to ensure everyone is aligned on expectations. But no matter how many rules you establish, there will always be a subtle balancing act involved in achieving optimal success in the management of family talent in the business. Patience, communication and good judgment are needed to ensure that both high expectations and genuine support play the appropriate role in each family member’s career development.
Amy Schuman is a principal consultant and Stephanie Brun de Pontet, Ph.D., is a senior associate at the Family Business Consulting Group (www.efamilybusiness.com).
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