The past few decades have seen the slow deterioration of a family business tradition; in the western world, not as many fathers are handing over the family business to their first-born sons. As is the custom, when any long standing tradition begins to crumble, new perspectives arise. The first you may have already guessed: with patriarchal systems of succession fading, women are now being seen as potential successors to their family business. Coupled with this is a second line of progressive thinking: next-gen family members are being valued for their qualifications and skills, not their birth order.
At the Loyola University Chicago Family Business Center, we’ve seen more and more women stepping into family business leadership. These women are helping move the succession process forward and coordinating efforts to keep their family on the same page. Last year, for the first time in almost 20 years, we had a higher number of women enrolled in our Next Generation Leadership Institute. An increasing body of research supports this shift. A recent study conducted by Dr. Joe Astrachan from Kennesaw State University and Ernst and Young looked at 2,400 of the world’s largest family businesses across the globe. The study revealed that 55% had at least one woman on their board and 70% were considering women as potential successors in the business. Many other studies show that gender diversity within boards and teams increases group performance.
It’s an exciting trend, one that allows families to access a deeper pool of talent than ever before. But there are still a number of challenges a woman faces when taking over her family business.
1. Balancing work and home life
Yes, opportunities for women in the workplace have increased. And yes, men have taken a more active role in life at home. But after all is said and done, women are typically the ones who end up carrying a larger share of household and child rearing responsibilities. Working for the family business might provide more work-life integration options, but taking advantage of such flexibility has its consequences. Women might be seen as less committed to their job, to future leadership, to the family business as a whole.
2. Gender bias
Men are allowed to be forceful and assertive leaders. But women? It’s a sexist way of thinking, but one that’s still prevalent in many family businesses. A woman who shows the same force and assertiveness as her male counterpart may not be taken seriously and risks name calling and labels.
3. Building a reputation as a viable successor
Male or female, every successor in a family business must undergo a change of self-perception. A woman must switch her thinking from “I am a daughter” to “I am a leader.” The same applies to a son. Women deal with the added complication of being perceived as “daddy’s little girl,” of being protected and sheltered. Perceptions like this hurt a woman’s credibility and leaning too much on their parent for support only fuels the fire. For some women, building a reputation and earning respect as a leader is a tough road, one that requires hard work and a thick skin.
4. Managing relationships with siblings
Siblings (brothers in particular) may have bruised egos if a daughter is more quickly promoted or promoted ahead of them. Sibling relationships are critical to multi-generational family business success; overlooking a sibling’s hurt feelings, causes friction. Successors must develop a sense of empathy for their siblings’ experiences and feelings.
In my experience, family business succession goes smoother when women are involved. Sensitivity to emotions and relationships allow women to pave the way for a more productive succession process. To conclude, I’d like to share a quote from Christie Hefner of Playboy (G2) whom I was fortunate enough to interview in my research on the challenges of successors:
“True power is given by the people that you lead, not by the people who gave you the job.” -Christie Hefner
About the Author:
Andrew Keyt is the Author of Myths and Mortals: Family Business Leadership and Succession Planning. With almost 20 years as the Executive Director of the Loyola University Chicago Family Business Center, CEO of Family Business Network (FBN-NA) and working directly with families in his consulting business, Andrew has dedicated his career to helping families navigate the unique ownership challenges and complex transitions that come along with successful family business stewardship. www.andrewkeyt.com