Skip to Main Content

Helping Family Businesses
Prosper Across Generations®

Chomping at the Bit

Dear Advisor:

My daughter, 28, does a great job and thinks she’s ready to become CEO. I think she still needs seasoning and experience to develop the judgment required to run a company. How can I handle this situation without injuring our relationship?

 


Having to judge your own child’s ability is an incredibly difficult task. Perhaps the only task more difficult confronts a young person who must judge her own ability. Rather than arguing about your differences in perception, seek to gain objectivity, perspective, a shared understanding of the future’s leadership requirements, and a succession process that all trust.

Objectivity is achieved by involving experienced and knowledgeable professionals in the process of evaluating performance and by structuring job responsibilities in ways that unambiguously reveal the quality of performance. Getting input from key non-family managers whose judgment you both trust, and an industrial psychologist using interviews and testing, and outside board members who had a chance to observe your successor’s performance are ways of introducing objectivity to the process. Managing a profit center also provides a way of getting objective results.

Perspective is gained through work experience in other jobs, organizations, structured educational experiences with other family business peers, and a variety of leadership experiences.

A shared understanding of the future’s leadership requirements comes from involvement in the business’ strategic planning processes and clear communication about each party’s vision of the future, plans, and anticipated timetable. Each should understand the others’ views of the future’s challenges and what will be required to succeed.

Finally, all relevant parties should subscribe to a process in which they have trust and confidence. We often recommend the creation of a succession task force comprised of key executives, outside board members, and family member owners to develop and implement that process.

One other factor can complicate the transition process – a sense on the part of the younger generation that they are entitled to the top leadership position, an expectation that sometimes has been fostered by the older generation. Be careful not to create inappropriate expectations by promising “someday this will all be yours” or “you can do it when you’re CEO.” Make sure your young achiever has an accurate sense of the financial responsibilities of family business leadership by being very clear about your requirements for lifetime financial independence and security and the expectations that other owners or potential owners may have. Sometimes when the next generation truly understands the financial burdens and risks of leadership, they are less stimulated by the status and power they perceive.

The Advisor

 

Back

 

Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.

The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact editor@thefbcg.com.

8770 W. Bryn Mawr Ave., Ste 1340W, Chicago, IL 60631
P: 773.604.5005 E: info@thefbcg.com 

© 2017 The Family Business Consulting Group, Inc. All Rights Reserved.

close (X)