A stream can rise no higher than its source, and the family firm can be no more brilliant than its leader. The business is dependent, therefore, on the quality of leader-
ship taleneprovided. If the available talent is not sufficient, the owner must bring in outside leadership or supplement family talent to avoid a decline under the leader-
ship of secon&or third-generation family members.
The quest* of competency is both a critical and a delicate issue. With experience, individuals can improve their abilities; younger people should not be judged
too harshly too early. Furthermore, potential successors may be held back by the reluctance of a parent-owner to delegate realistically to them.
A family firm need not accept the existing level of family talent as an unchangeable given. Instead, the business may offer various types of developmental programs to teach younger family members and thereby improve their skills. Some
businesses, for example, include mentoring as a part of such programs.14 Mentoring
is the process by which a senior person in the firm guides and supports the work,
progress, and professional relationships of a new or less-experienced employee.
Perhaps the fairest and 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 members demand that they be passed over for promotion. The appointment of competent outsiders to these jobs, if necessary, increases the value of the firm for all family members who have an ownership interest in it.