If one or more of your next-generation family members are in line for consideration as future leaders of your family company, they likely are studying fields relevant to the business roles they aspire to fill: management, marketing, engineering, accounting and the like. But these future leaders also need training beyond subject-matter expertise.
In addition to knowing “the business of the business,” aspiring family business executives must be well versed in “the business of the family.” In other words, they must be trained in family governance and conflict resolution best practices. As family business adviser Ivan Lansberg wrote in Family Business Magazine back in 2001, successors’ ability to lead “will depend as much on their ability to gain the trust, commitment and cohesion of the shareholders as it does on whether they can deliver on the business fundamentals.”
What’s more, in order to be responsible stewards of the family enterprise —and to hold the family business leader accountable—family members who do not plan to work in the business must also receive training. Every shareholder, for example, should know how to read a financial statement, a skill that will also serve them well outside the family realm. Family business stakeholders should also know the history of the family and the family business. They should learn the economics of the family business—how it makes money—and the challenges it faces in today’s competitive marketplace.
Family business adviser James E. Barrett noted in The Family Business Mentoring Handbook that next-generation members should be trained to serve as board members, foundation trustees or family leaders. “[A]ll too often,” Barrett wrote, “their involvement in such activities begins casually … and no one mentors them along the way.”
In this issue, Charlotte Lamp—a longtime educator who holds a Ph.D. in Leadership Studies with a focus on family governance—shares her advice on developing an education program for family members of all ages, based on her experience creating one for her family enterprise, Port Blakely Companies.
Also in this edition, an adviser to The Biltmore Companies—an enterprise that grew out of the Biltmore Estate, built in 1895 by George Vanderbilt—profiles the work of the fourth-generation family leaders in launching an educational initiative. This work was part of a broader effort to institute policies and structures in preparation for transition to the fifth generation.
As you will see from these examples, creating an education program is a labor-intensive effort. But the future of your family enterprise depends on it. And there are many resources to help you get started.
Copyright 2012 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.