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A Board's Advice on Leadership Development

At a board meeting the family owners asked the independent directors what they felt were the most important developmental experiences next generation leaders should have.  We found the counsel of the independent directors -- all of whom are currently CEOs and are developing their successors — to be very profound. They advocated four specific areas of knowledge and experience as preparation for leadership. They also discussed how family owned businesses can provide these experiences.

 

  • Intimate knowledge of the business' day-to-day details. To be a successful strategist and leader of change, they observed, requires a deep and broad understanding of the business' operations. Too often strategy fails from lack of real understanding of the basics of the business. Hands-on experience also helps spark the most valuable strategic thinking. The best way to learn is to work up through the ranks. When a family member comes to the business with a lot of outside experience or education, they still urged working for a while in several day-to-day operations departments. Family members also benefit long-term from having worked in hourly jobs in the business while growing up and going to school.
  • Experience in a “Role Model” organization. Learning management comes, in large part, from working for an excellent organization. That experience teaches what's possible and provides benchmarks and principles to use later in life. Occasionally, management understanding can be gained from education--but only if the university itself is a role model organization. In general,however, there's no substitute for outside work experience in a best-of-class organization.
  • Struggles in “over-your-head” situations. The directors felt future leaders would benefit from experience in extremely difficult circumstances. With such experience, a successor can really know how to assume personal responsibility, gain the experience of being alone, and earn self-confidence. The directors recommended that all successors should have several “over-your-head” experiences. Sometimes they hoped that the successor might sometimes have a “safety net” in the form of a mentor. But sometimes, they added, standing alone in a very tough situation is a valuable, mistake-making, confidence-building experience.
  • Global exposure. International experiences open the mind and provide different perspectives,both fundamental to creative strategic thinking. The directors recommended college experience abroad plus work experience in another country, in addition to the benefits of diversified vacation travel. Perhaps an exchange with a family business in a different part of the world could be arranged.

We were most impressed by these four suggestions and that the owning family asked the question of their board.

 

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