Emerging stronger as a successor: Gain wisdom from your family, family business and trusted advisers

At a family business conference, several years ago, I had the good fortune to hear speak the senior family member and then president of the fourth generation Italian fashion house, Ermenegildo Zegna. In reply to a question on where he spent his time, he identified three areas of personal priority.

The first two you might expect—overseeing the brand and maintaining relationships with customers and suppliers. The third perhaps less so—attention to the preparation and development of family talent as the prerequisite for continuity of family ownership. 

Effective governance of family talent—the involvement of family for continuity—is often overlooked. Nowhere does the application of clearly mandated oversight serve individual successors (and the families of which they are a part) so well. Governance as ‘the right people in the right room with a clear mandate’—in this case to identify the value to successor participation, set broad criteria for involvement, define development requirements and consider and decide on criteria to cover ‘material’ issues.

However, this is not easy. A Harvard Business Review article (2020, 'Managing the Trickiest part of the Family Business'), identifies governance, development and decisions for and around the involvement of family talent as being particularly difficult (read hazardous) for family and non-family managers. To draw on my own experience, this is an area where non-family do not want to become involved in the belief, I think, that they have no authority over successors and the decisions on how family members contribute (work, govern, add value) to the family company. This is a lost opportunity.

Family talent committee

Yet be involved they must. For the governance of family talent consider a designated body—say a 'family talent committee'—with a mandate (from the board, family council or both) to prepare and support individual family talent as the next generation of successor managers, family or company governors, entrepreneurs or wealth custodians.

For such a body, membership ('the right people in the right room') is key. Success rests on the involvement and collaboration of a triumvirate—family, business and external.

First, representation from the family, usually either a senior family leader or a family member with the requisite experience and skills (say in operations, talent development or human resources). Second, a member of the executive of your family company, most probably the human resources director or an individual from operations who is familiar with current and anticipated talent requirements (roles, skills). Finally, an independent resource (here I declare an interest), either a talent or career expert (industrial psychologist, leadership coach, former human resources director) or former family executive with experience of business, ownership and succession.

Finally, the scope for such a body—along with a mandate for management roles—could include roles for 'ownership' such as head of the family council (family governance), family directors (company governance) or successor founders and family office executives (wealth generators or custodians). All areas (roles) where family talent can bring value.

The principle here is clear: effective governance of the preparation and development of family talent is sufficiently important to require the express designation of a clearly mandated, qualified and integrated decision-making body.

As a successor, your role—as you inform yourself on the family business—is threefold. First, to assess the importance to the family of family talent – look to language, family involvement and demonstrated support by senior family members, as illustrated by the Zegna example above. Second, to advocate—if not yet in evidence—the effective support of family talent, ideally before you commit (join) or through the channels of family governance if available. Finally, at a minimum to propose and trial a structure—such as a family talent committee—to support the effective planning, resourcing and use of family talent as a key requisite for continuity of family ownership. If the family will not do this, who will?

Support as an owner... by and for other owners

In 2012, in response to an evident need in the Irish market, I founded and set up an Irish chapter of the non-profit Family Business Network. With the mission ‘by families, for families’, my aim was to allow Irish families-in-business meet with their peers (other families) in a closed setting free from solicitation with ownership as the common denominator.

The past 20 years has seen the proliferation of organisations whose aim is to facilitate the exchange of ideas, contacts and relevant experience. Campden Wealth is one example. Measures of success are the numbers of participating families, follow up 'peer-to-peer' private meetings and (increasingly) attention given to the preparation of successors (i.e. you) as a prerequisite for successful succession.

As an example, the provision of education programs is an effective and popular way to engage and prepare successor peers. Typically, these programs cover the following topics within the three areas of Ownership, Technical Knowledge and Self Awareness and Development:

Ownership

Family and company governance

Rights/responsibilities of owners

Technical Knowledge

Effective management and strategy

Industry structure and dynamics

Fundamentals of finance

Self-Knowledge, Contribution

Individual and interpersonal skills

Career planning and pathing

Leadership and entrepreneurship

As a successor, my advice is to seek out and actively participate in—to the extent your competing commitments will allow—organised peer groups of families-in-business (or families-in-ownership). First, as validation of what 'you' are doing or pointers to what 'you' could consider. By 'you' I mean your family, your company or you as individual.

Second, find examples (from your peers) of what 'you' might next expect as succession unfolds for your family and company, to include (if you have been actively listening) possible 'solutions' to consider and take home. Finally, with reference to my previous article, peer groups are a rich source of potential mentors. Look for owners with purpose, a self-deprecating while confident demeanour and a willingness to share. Good luck.

Personal coach 

At times support, development and the success of succession all come back to the individual and the multiplicity of decisions that together make up a career. In my prior article, I introduced and explained the importance of a mentor. As a complement to this, my advice is to source and have available a coach (possibly the same person)—someone who can hold up a mirror to you.  A coach can be invaluable to help identify and remedy unconscious patterns of behaviour and secondly (and more critically) to talk you 'off-the-ledge' at times of undue stress, conflict, or important career decision.

To 'identify and remedy' is to hone your aptitude for the task(s) you have set yourself. To round out the rough edges, to 'unlearn' as it were, those detrimental behaviours or skills (such as an inability to listen) noticeable to others but as likely as not hidden to you (hence the mirror).

Second, a coach with an unconditional positive regard for you demonstrated by his/her ability to talk you 'off-the ledge', will save your career at least once. He/she will moderate and help you manage your behaviour—ahead of any decisions—in response to those emotional triggers which are inherent (as it were) part of a career in a family company or the varied demands of ownership.

‘Successor, design your support’

Both observed and personal experience have consistently demonstrated to me the following principle: that successors require well-structured, well-managed support to optimise and smooth performance over time. A priority for you as a successor—regardless of the roles or career pathing you choose either within or alongside the family company—is to design and put in place such support. Support to provide feedback, assist with career development, coach imperfections, mentor possibilities and (in extremis) coach you ‘off-the-ledge’. Think of support as an asset both to you and to continuity of family ownership.

A successful career has been described as 'well-made road'. To be so requires decisions on roles, fields, pathing and development. In your role as successor, these decisions are affected by the impact of ownership and can only be optimised when made with suitably qualified others—from inside the family, inside the company (or family office) and externally to both. A key skill as a successor is the ability to anticipate, source, negotiate and (at times) to insist on support in the face of the isolation, emotion and complexity that come with ownership.

“To find ourselves, we all have to fight our way out of isolation for it is only in the community outside that individuality is to be had.” Clive James, author, poet and broadcaster.

Philip Mackeown, family business leader turned business leadership and career coach, will chair the 18th Campden Wealth European Families in Business Forum, held in-person in Berlin, Germany on the rescheduled dates of 30-31 March, 2022.