Many people today are discussing the subject of succession and, more specifically, rising female leadership. Both areas include multiple moving parts. However, one word that contributes to the discussion requires white gloves more than any other – power.
There are several reasons why we, as a society and as individuals, react so strongly to the term “power”:
1. Fear of change
As captain of the metaphorical ship that is the family business, the patriarch has had absolute control in many aspects of how the company is run. Under his leadership, the second-in-command has had a clear-cut and well-defined set of rules and regulations. The framework was concise, and if one did not follow the governance in place, corrective action was taken. However, with a woman sitting at the table, how will the policies or mindset shift? While inclusion can benefit the company, the current men in charge may have concerns of how a woman could influence the culture and its values.
2. Fear of failure
When leaders of a family business ask a woman – especially one much younger than them – to take the helm and run the company, there is always an underlying anxiety that she might unintentionally collapse what they have built. For this reason, managers and leaders may ask her to transfer her voting rights to senior partners in order to protect and insulate the business from this unknown factor. What can an inexperienced younger woman bring to the company? In some cases, the baton may even be passed to non-family members.
3. Lack of vision
Unless we are pushed to plan long-term, we rarely think five or even ten years into the future. Advisors and coaches can motivate families to commence their succession planning, but senior family members can procrastinate in surrendering control for as long as possible. This resistance to visualise and prepare for future possibilities stunts the growth of all parties involved when the day finally arrives to transfer the reins.
4. Self-preservation and greed
The patriarch’s office is normally located on the top floor – a floor that no one sees unless invited. This mystery can create idol worship and distance that serves to keep hungry subordinates, including members of the next generation, in oblivion. The existing leadership has the connections and the proprietary knowledge. They may want to maintain their hold on this role by not teaching the next generation everything they need to know. After all, if control is lost, where will the prestige, bonus pay and perks go? There is also protectionism around identity. Yet, this intrigue limits the success of the company and hinders its future endeavours.
Determining the next person to lead the family business, whether that be a man or woman, is vital for the future success of the company.
Determining the next person to lead the family business, whether that be a man or woman, is vital for the future success of the company. Despite this, many current leaders let their biases get in the way of what is actually best.
Luckily, there are many solutions to overcome the obstacles that come with succession. A starting checklist is enclosed below to prepare all generations for the new organisational chart:
1. Meaningful, first-hand training
To truly lead as head of the company, the successor needs to know the mechanics of every function within the business. She needs to understand the implications of each decision she makes for the business, and that means learning through practical experience. The best mentor is the patriarch, who built the business from the ground up, has the employees’ respect and knows the ins and outs of the entire operation. Not only should he bring his daughter to each department to learn from that department head, but he should also take her under his wing and prepare her for the emotional strain that these responsibilities can create. When a patriarch delivers this training, he strengthens not only the next generation but the business itself.
2. Social rules of conduct
Many patriarchs may want to accompany their daughter to certain business meetings. She might believe that she can handle it alone, but Dad knows the wolves she will be meeting with and wants to protect her. He knows the personalities of his associates. He has also been the face of the business for many years.
3. Leap of faith
When individuals replace their fears with faith, they create more space for growth and discussion. Once the patriarch has done his part to ensure his daughter’s transition as the new face of the company, all that is left is to believe that she will prove herself a worthy candidate. The Board should follow the patriarch’s lead and have confidence that she has been trained well enough to keep market share and benefit the bottom line.
4. Transparency inside and outside of the company
In addition to giving the daughter the chance to prove herself, company leadership can provide employees and managers the chance to be truly heard for their ideas, as well as possibly acquiring part-ownerships in the business. Everyone takes pride in knowing that their craftsmanship is valued by all parties. Increased dialogue within the business allows for relevant feedback, harmony and better results. Thus, the communication principle needs to be prioritised in the company’s culture. In society today, Generation Z is demanding openness and access to everything. This means that leadership and ownership may be vulnerable at moments to maintain trust and loyalty.
With an enlightened mindset and thorough guidance, the subjects of succession and female leadership can become less disconcerting.
Intentional planning is a must when transiting a family business from its current leadership to the next generation. With confidence, patriarchs can begin to view their daughters as the future leaders who will lead the business they have built. They hold the power to transfer their knowledge, best practices and positive habits along with the business.
With an enlightened mindset and thorough guidance, the subjects of succession and female leadership can become less disconcerting. The transition from the patriarch to his daughter can be a hopeful change for all family and team members involved. Thus, it is time to take off the white gloves and begin taking that leap of faith.
Angelina Carleton, the founder of Legacy Planning, is an advisor to many entrepreneurs and financial professionals worldwide. Mrs. Carleton coaches clients with navigating their personal roadmaps to achieve their legacies. In 2015, she was recognised by Los Angeles Business [L.A. Biz] as a Woman of Influence, an award from the American City Business Journal.