Following In The Footsteps Of A Successful Founder

I came across an article discussing Following In The Footsteps Of A Successful Founder. Here are a few snippets that you might find interesting.

Stepping into leadership of a family business is not always easy, especially when you are following a successful founder. For Roberto, the second-generation leader of a successful Brasilian family business, it took years to win the hearts and minds of employees, customers, bankers, vendors, partners, and — most important — the other family owners. But when the business hit a rough patch, Roberto’s mother, who had co-founded the business, decided to step back in and take over the reins. Almost immediately, two factions emerged in the family: one that supported Roberto, and one that supported his mother. Conflict ensued, and decision-making ground to a halt. The business — and the family — never recovered.

In a time of crisis, clarity of leadership is more important than ever. But balancing years of experience against the need for a new leader to prove himself and learn first-hand — all the while not risking the health of the business, the support of employees, and key business relationships—is not easy.

How do you know when a founder or former leader should step back in to help? How do you know what level of engagement is right for them? And how do you navigate the transition — and any crisis that follows — to balance the founder’s experience and wisdom with the successor’s need for autonomy?

To help the retiring leader feel confident that he or she is handing the business over to a family member who is ready for the challenge, Romman and Bird suggest trying the following:

Get an external assessment of the new leader’s ability to run the business.

It can be difficult for leaders to objectively assess whether their successors are prepared. That’s especially true when a parent is handing the business over to the next generation. It is critical that owners maintain a view of how well the new leader is performing. Seeking a third party to assess the rising generation’s performance is key to the success of any transition. Once in the seat, the new leader stands to benefit from this assessment to support his or her development.

Strengthen the lines of communication between the former and the current leader.

During any leadership transition, especially one involving family members, communication is critical. Mark and Peter could have increased, not decreased, the frequency and depth of their communication during and after the transition, enabling Mark to keep tabs on key developments and to relay his thoughts directly to Peter. That would have kept Mark off the front lines, cutting down on confusion in the organisation and among its investors during the crisis.

Respect the lines of authority.

During a crisis, decision-making can become confused — just when it needs to be at its best. After the transition, Mark and Peter settled into a new way of making decisions that was working well — until Mark started to step back in. He used his history with the company and his position as an owner to become involved in major decisions, creating confusion and slowing down decision-making. During a time of crisis, it is critical that the current and the former leaders align on their decision rights and roles.

Sometimes a crisis brings the need to modify how decisions are made. Perhaps the owners need to be more involved in some decisions, or frontline workers need to be more empowered. Such changes should be discussed, agreed on, and revisited on occasion to maintain organisational clarity and efficiency. Peter would have been more likely to seek Mark’s advice if he knew that Mark would not go around him if they disagreed. Mark would have been more likely to stay within the lines of authority if he knew where and how he should be involved and had a forum for exercising his decision rights.

Acknowledge differences in how you see the world.

In any leadership transition, it is natural for the new leader to bring new points of view and ways of doing business to the position. He or she may have different risk tolerances, business interests, or ways of dealing with employees that the organisation needs to adjust to. The outgoing leader might find it hard to see such sudden changes in the way business is done. He or she might accept them when the business is performing well but use them to justify re-entering the business when a crisis hits.

In a time of crisis, it is critical to slow down; jointly redefine goals, strategy, and plans; and communicate about how the new goals are being used to guide decision-making. The revised plan provides objective, newly relevant criteria against which to evaluate the new leader’s performance. The outgoing leader should step back in only if the successor and his or her team are falling short of the updated plan; otherwise, the long-term transition will probably be best served if the outgoing leader respects the lines of authority established in the transition.

Want to know more? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts at [email protected]; or call me on 0467 749 378.

Thanks,

Robert