Question of the Day: How Should Family Businesses Approach the Selection of Leadership of Their Family Business?

Key Question: Who Should Take the Lead?

The future of the business rests in the hand of its leadership. That's not so profound. What is profound is the fact that the fastest growing businesses today utilize shared leadership.  Decentralized, broad-based leadership. Recent studies have revealed that in successful organizations, certain patterns of leadership are being repeated - every leader works and every worker leads. The new term “work-leader” is rapidly being popularized in the business environment.¹

This trend reflects a growing reliance on empowerment and participation in the business processes - with leadership occurring at all levels. Where is this leadership coming from? Essentially, it is being developed from within, homegrown leadership. Workers at all levels are filling leadership vacuums created by the downsizing of mid-management structures. Teams are also becoming more central in work processing by providing self-management direction.

Developing leadership now needs to be developed at three levels - the individual, the team, and the organization. A strategic development process will ultimately enable employees to contribute to the business mission in a more comprehensive way.

Perspective on Leadership

The more you understand what leadership is and how to develop and deploy it in your business, the more prepared you will be to meet the challenges you face in an increasingly competitive business environment. Through leadership development, businesses can be better prepared to achieve higher levels of success. This will require a specific strategy. It falls on the shoulders of the family spokesperson to suggest that the family seek help of a 3rd party specialist (family business advisor) in how to proceed. There are so many choices in how to proceed in this matter we suggest taking precaution when making your choices. Involving the right knowledge and experience in leadership direction are crucial for the future. Period.

 Leadership Examined

How can one provide effective leadership without understanding what it is?  The distinction between managers who do things right and leaders who do right things is attributed to authors Peter Drucker and Warren Bennis. A further distinction is that you manage processes and lead people. The successful enterprise has learned to embrace and merge both roles: manager-leaders who can identify the right things to do and then do them right.

Leadership is often evaluated in terms of the qualities one can observe. Some of these qualities, such as intelligence, energy, and enthusiasm, are easier to identify than others. John Adair, a leadership specialist in the United Kingdom, defines a leader as "the kind of person with the appropriate talent, knowledge and skill to lead a group to achieve its ends willingly."

By comparison, the manager is responsible for managing the enterprise. The processes used to achieve the desired end represent the definition of management. Many managers meticulously carry out their management responsibilities while exercising very little leadership. Conversely, there are excellent examples of leaders who know very little about the process of management. Almost all elected officials would fall into this category. They were not elected for their management expertise, but rather for their leadership abilities. 

Leadership Defined

In examining leadership, a definition that includes more than just what leaders do, but also what they create and how they create is most helpful. Leaders see opportunities to create results and they seize them. They ask, "What else can I do?" They proactively look for ways to achieve exceptional performance. These features need to be considered when it comes to what is being mentored or coached.

Taking these factors into account, consider this definition of leadership:

Leadership occurs when individuals anticipate and identify an opportunity to make something positive happen, and then take responsibility for the process and its results. Leadership creates followership. Followership will occur when the leader offers a trustworthy direction.

Leadership development in family businesses for family business members is one of the most promising and beneficial investments for a family business to make. This is the decision you cannot afford to under prepare. To learn more about the Academy of Family Business, our curriculum and our coaches, please visit us at: info@myAFB.org

¹ Leadership IQ, E.C. Murphy Ltd.