Survival of the Fastest: Part II
My last post focused on what family business members can do to beef up their adaptability within today’s global marketplace. In today’s post, I’d like to explore the business side of things.
Is my Leadership Adaptable?
Non-family businesses typically have one type of leader. For the sake of discussion, I’ll simply call this person the business leader. But in a family business, things are more layered. There’s a hand-in-glove relationship between business and family, so it only makes sense for there to be both business leaders and family leaders. When a family business hits a rough patch or goes through a period of drastic change, both business and family leaders are expected to take charge and help weather the storm. They need to have wisdom and knowledge about the challenges of their environment and the self-confidence to act, despite resistance and opposition to their ideas. Successful leaders exhibit humility. Their inner calm prevents them from getting too high or too low and they make decisions that need to be made. They’re plugged-in, stay on top of the trends and have a vision for the future. They focus on the customer, not the competition and are excellent communicators. Business and family leaders who exhibit these characteristics give stability to the company, especially when adaptability is critical.
Is my Business Adaptable?
So we’ve got family members and leaders who can adapt, but we’re still shy one piece of the puzzle. In order for your business to stay fresh in today’s globally competitive business, you need strong business processes.
Once you’ve pulled together the right leadership team, it’s important to draw clear lines of authority. Put processes in place to make sure the vision of your business is being clearly articulated and executed. In many first generation firms, the future vision of the business is locked away inside the founder’s head. But as the second and third generation step-up to the plate, and more family members become involved, it becomes increasingly important to make sure the business has direction. What is the vision? What is the strategy? And how do family members and employees participate in the creation of the two?
We’ve all heard about best practices, but what we need to be thinking about is best processes. Questions are undoubtedly going to pop-up during the succession process–questions that neither you nor any other family member will be able to anticipate. That said, it’s not impossible to find answers to some of these questions while balancing the needs of family, business, and ownership.
How do we do this? Two things:
First, we create company-wide strategies by building strong processes. Second, we hold management accountable by creating strong boards. For some companies this might be a Board of Advisors. For others it might be a Board of Directors. Either way, the main objective is to create a body of governance that provides accountability consistent with the mission, vision and values of the family. Boards help ensure strong leadership and strong family communication. And Board members often bring industry knowledge and experience to the table, assuring the viability of business strategies.
The world moves fast these days, and while some might think that business challenges are the greatest threat to a family business, the lack of adaptability might be an even greater handicap–one that keeps a family from adapting to the competition of a rapidly changing global market.