Family Leadership Strategies

72 conversation commences with current generation wealth owners and the next generation of wealth inheritors. The goal is to go beyond casual conversations and to probe the fears, interests, and expectations of both seniors and successors. This requires stepping out of ‘parent-child’ roles and other traditional patterns of communication, to create a forum for candid and honest interaction. This is not easily accomplished, and many families will turn to a trusted third-party facilitator such as an estate attorney or skilled consultant to mediate this process. The outcome of this dialogue can be a simple agreement on a timetable and actions, or, as is often the case, formally set out in a document that confirms the family’s views, key roles, policies, and commitment to leadership development and succession. The document serves as the basis to communicate these views to the extended family and interested parties. At the heart of this process is the identification and inclusion of key stakeholders, as well as identification of the many stakeholders impacted by the outcome. This process should extend beyond family members to the other entities owned, subsidized, or endowed by the family. Often, these entities and their many thousands of employees are keenly aware of a potential leadership vacuum or lack of clarity around succession, which can create collective uncertainty and disruption to the family business. In summary, ignoring or putting off a succession discussion is never an effective strategy. Starting early is therefore advisable, even when wealth inheritors are only in their early teens. Well-articulated, perpetual process Successful families not only acknowledge the need for an effective leadership process, but also embrace a clear and open transition policy. They embrace the notion that leadership development is an ongoing process. In terms of a family enterprise leader role, these policies at the very least include: eligibility expectations; training and development resources; mentoring; compensation rules for family members; and governance rules, specifically around reporting, decision making, and hiring and firing practices.