In any cases, a family firm need not accept the existing level of family talent as an unchangeable given. Instead, the business may offer various types of development programs to teach younger family members and thereby improve their skills. It is not unusual for firms to specify programs and other requirement in formal documents such as a family constitution. Some businesses include mentoring as a part of such programs. Mentoring is the process by which a more experienced person guides and supports the work, progress, and professional relationship of a new or less-experienced. In the family business, a mentor and protégé have the opportunity to navigate and explore family as well as business-related and responsibilities.
Perhaps the fairest most practical approach is to recognize the right of family members to prove themselves. A period of development and testing may occur either in the family business or, preferably, in another organization. IF children show themselves to be capable, they earn the right to increased leadership responsibility. If potential successors are found, through a process of fair assessment, to have inadequate leadership abilities, preservation of the family business and the welfare of family member demand that they be passed over for promotion. The appointment of competent outsiders to these jobs, if necessary, increases the value of the firm member who have an ownership interest in it.
PREPARING FOR SUCCESSION
Sons or daughters do not typically assume leadership of a family firm at a particular moment in time. Instead, a long, drawn-out process is involved. This process can be intentionally designed and implemented, or it can simply occur as all parties age. In the latter case, no one should be surprised if the next generation is not prepared at the time a transition is necessary. Successful management and ownership transitions require thoughtful action by both the current and the future leadership teams. Family business educator Greg McCann proposed actions for both generations, as discussed in the following subsections.
RESPONSIBILITIES OF THE SENIOR GENERATION
As we saw with the Lackland family in the Living the Dream feature on p.147, parents should not automatically expect their children to take on senior management responsibilities without being told that actually have authority. Listed below are some topics that the senior generation should consider and some steps it should take:
1.Communication. Parents need to listen and ask questions. Communication can be used to build trust and to convey values. Providing support and feedback are important, but not just in a one-way direction.
2.Planning. Not only should the company’s vision be articulated, but also the family’s values and even the plan for setting the estate of the senior generation, planning should encompass the three areas-family members, employees, and owners-that were introduced in Exhibit 5.1, on p. 137
3.Accountability. The senior generation engages in roles as both parent and business owner. In each case, there should be investments in and support for the development of the succeeding generation. That means holding the next generation accountable for their action, especially those that relate to credibility and integrity.
4.Owner development. To prepare the next generation to participate in the governance of the firm, the senior generation should be specific about the job structure of an active owner-manager or board member.
5.Long-term planning. When asking the next generation to develop long-term plans that prepare them for leadership, the current generation of leader must simultaneously prepare their own plans. Such plans.Such plans should take into account future business development, boards of directors and advisors, family councils, and other structures