Leadership Matters in Family Business

 In Blog, Family Business Enterprise, Leadership, Management

“…the owner who does not tend to the needs of the organization is not creating a business. He or she is just self-employed with a lot of helpers.” – Craig Aronoff.

When you read this quote what thoughts come to mind about leadership? What does leadership mean and look like to you?

When speaking with owners of family businesses I am often asked what can be done to effectively build leadership capacity in a growing business or when preparing for succession. Most often, our discussion begins with a discussion of what leadership is and what that looks like in practice.

What is Leadership?

I once heard leadership defined as scaling capacity of an organization to create what matters for, with and through people. What strikes me about this definition is that leadership is focussed on others.

Leadership “is a function of knowing yourself, having a vision that is well communicated, building trust among colleagues and taking effective action to realize your own leadership potential.” – Prof. Warren Bennis.

Another aspect of leadership is “walking the talk”. In the family business context, I have witnessed firsthand situations where owners prepared for business leadership transition while behaving in a way that showed they were clearly not ready to let go of the reigns.

The important point in all of this is that as an owner/leader you are critical to the leadership/succession success of your organization and as a leader, what you do and don’t do matters.

Building Effective Leadership Capacity – How to start?

It starts with you.

Regardless of your family business situation – whether you are in growth mode or are preparing for succession, good leadership must start with you, the owner. It starts with you role modelling the appropriate leadership behaviours, walking the talk and demonstrating to others your commitment and willingness to acknowledge your role in leadership challenges and solutions.

Consider these two foundational leadership skills: self-awareness and appreciating the perspective of others.

Self-Awareness

It can be difficult and sometimes a bit scary to objectively look at ourselves and be honest about our own strengths and limitations. There is great personal power, however, in asking yourself some tough questions and being honest with your responses. Results of this self-reflective process can identify the core of an issue vs. the symptom and it can completely change how you look at your leadership challenges, specifically the role you play and what you can do about it.

If you think you may fit the earlier example of an owner who is being perceived as not wanting to let go of the reigns, a good start to changing this perception begins by acknowledging that your behaviour is not in-line with your words. Ask yourself some genuine questions about what your actions are saying about what you want as a leader and in this period of transition, what is really going on for you? Is your self-identity tied to the business?

Appreciating the Perspective of Others

Having the ability to appreciate the perspective of others is important as it leads to understanding and empathy which can completely change your perceptions, interactions and relationships with others. This is particularly important in the relationship oriented and highly emotionally charged context of family business.

The family business system is comprised of three overlapping systems – family, business and ownership (reference visual in early blog “Looking to Optimize your Family Business?”).  Imagine how different perspectives are between a married founder nearing retirement vs. a pair of siblings taking over the reins. Consider what kind of leadership/management style may be needed in the future as the business grows.

Take the time to visually map out where family members are in the family business system and reflect on how your perspectives and those of others can be impacted by where they are positioned in the system.

Take Action

We have all heard the expression that the grass is greener on the other side, I like to say that the grass is greener where you put the time and effort. Developing effective leadership capacity takes sustained time, effort and as an owner you are critical to its success.

Still not sure how to get started? Simply making a commitment to one doable action that is within your control is a great way to demonstrate your willingness and commitment to move things forward.

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