The Iron Fist of Leadership is Rusting. Fast.

“The recipe of yesterday is not the recipe of today,” Olivier de Richoufftz told me recently during a Zoom call, “and looking into your rear-view mirror won’t tell you which direction to go.”

We had been talking about the intergenerational gap between the old and new generations of family business owners. Richoufftz had observed this divide while acting as Secretary General of Family Enterprise Foundation (FEF), an organization that aims to make education for family businesses digestible by supporting entrepreneurial families and their enterprises with educational resources and research.

The new gen of corporate leaders seems to be doing things differently. 

There was a time when organizations could be run from the top-down and leadership teams consisted of a handful of select individuals who made most of the big decisions. These leadership styles, patriarchal in nature, led their organizations with an iron fist. But in today’s economy, this style of leadership is struggling to hold its head above water. Change is the new normal, and the leadership approach companies take to offset it are changing as well.

An organization’s growth and longevity can no longer rely on long product life cycles (which are often six months or less now). With rapid change comes rapid innovation, and with rapid innovation comes a need for a constant stream of new ideas and a more collaborative business model. 

Are you starting to see the problem? 

The uncertainty of a constantly changing business environment is making it harder for businesses to survive, particularly businesses that haven’t learned how to make it in today’s highly competitive economy. Today’s leaders must be open leaders — open to new ideas, collaboration and transformation. It’s about moving from “me” to “we,” and learning how to lead by taking a step back, not a step forward. Now more than ever, business leaders must know how to share a piece of the organizational “pie” with the rest of their company, and intrapreneurship is a powerful tool to see that through.

Intrapreneurship is all about empowering your next gen leaders to think like owners, and to identify and implement new ideas to move the business forward. 

Richoufftz speaks to the importance of bridging the intergenerational gap between business owners and the next generation of business leaders, as well as how intrapreneurship can help facilitate long-term growth within family enterprises. 

“There are three fundamental questions a business owner should ask themselves when they decide to continue running their business,” says Richoufftz. “Why are we in this together? To do what? And for whom?” 

Richoufftz believes answering these three questions will give leaders a better sense of their company’s direction, as well as the values associated with their organization. “There is a lot of business that is lost after each generation. This is because business owners do not have the attributes that are required by today’s leadership, including open and transparent communication, bringing non-family members to their board, and having a willingness to be challenged.”

Family-run businesses can be powerful tools to help build strong economies, especially when handled correctly. In Germany they have the Mittlestand, which loosely translates to “small and medium-sized enterprises.” More than 90% of German firms are part of it. More importantly, however, are the values associated with the Mittlestand: family ownership, generational continuity, innovativeness, emotional attachment and customer focus. 

But in many countries around the world, there is a tension between young business leaders and their predecessors that tends to hinder organizational growth. For Richoufftz, it stems from the starkly different approaches older and younger leaders use in their businesses. On the one hand, the senior generation of leaders tend to handle business using the patriarchal style of leadership and make decisions based on their gut instincts, while the new generation of leaders are more collaborative and open to collective decision-making.

As important as it is for the new generation to recognize the work their predecessors put into their business, it’s also important for the senior generation to understand that their successors have a different style of managing and leading. By having this dialogue, companies can ensure that there is a mutual respect for the work that has been done and that needs to be done. 

For Richoufftz, intrapreneurship offers family and non-family members alike a platform to pursue their ideas and contribute to the leadership side of their organization. “Intrapreneurship is what I call a ‘smart-up’ way of thinking rather than a ‘start-up’ way of thinking, because starting with something that already exists is definitely smarter than starting from scratch.”

“You don’t need to be a superman to start a business if you give yourself time and accept the support of others. More than ever, intrapreneurship is going to force people to reinvent, and this new generation of intrapreneurs is going to change how the game is played.”

If you are ready to take the next step and learn with industry leaders, our Intraprise° Sprint continues to help individuals, companies and their teams excel at bringing their best ideas to market, faster. We will help you unlock innovation and take greater ownership of your own growth potential.

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