To paraphrase an old adage, “Greater loyalty hath no executive than to give up his job to the boss’s son.”
If you’re the CEO or key manager of a family-owned business, and you’re not related, you know you may be out of a job one day. Almost inevitably, a member of the next generation will come along to leapfrog you or, perhaps, relieve you of your current spot on the corporate ladder. The only questions are when and how. If you’re smart, you’ll be involved in answering them.
One of the most valuable contributions you can make in the family business is to facilitate the successful transition of the future chief executive. You should be ready and willing to become a mentor.
The term “mentor” dates back to Homer. Mentor was the wise counselor and friend to whom Ulysses entrusted his son while he set off on a 10-year odyssey. Mentor played a number of roles, including that of father figure, teacher, trusted advisor, and protector to the inexperienced young man. The relationship evolved into one of great mutual affection and trust.
It is unlikely that you’ll be asked to be a mentor for as long as 10 years, or that the business owner will be entirely absent when you do it. However, you probably will be asked to assume key responsibilities in preparing the next generation of family. The emotional ties that bind families make it next to impossible for parents to provide career guidance to their own offspring. Or, for that matter, for the offspring to bear that advice in an unfiltered and open manner. To get a little feeling for the scale of this challenge, think about trying to teach your own son or daughter to drive. I’m sure most of us are thankful for driver’s education classes. Unfortunately, there are no successor’s education classes for children in the family business.
To function most effectively as a mentor, you should play a role in: specifying the requirements for the successor’s job; helping to identify and recommend the most appropriate successor when there is more than one potential family candidate; and coaching the successor so that he or she is fully prepared to assume the reins.
In establishing the criteria for management succession, you should evaluate both the current requirements of the position and the future needs of the business itself. You should identify the knowledge, skills, abilities, and the background and experience that are necessary to enable the person to perform successfully in the job. And you should also note emerging business trends and considerations that will place new demands on the position. After you’ve done all this, you should draft a description of the job and a career-development plan for the would-be successor. You should then use what you’ve written down to screen potential family candidates for the senior position.
Besides appropriate training and background, you need to assess the candidate’s ability to function well in critical managerial areas, such as strategic planning, decision making, problem solving, leadership, and interpersonal and organizational communication. One good technique for assessing the candidate’s capabilities in these areas is to describe a few hypothetical situations and ask how the candidate would handle them.
If the business does not adhere to strict standards of merit in promotions, or if there is only one possible successor, you may not have a say in the selection. What if you don’t believe that person is well qualified? As the mentor, you can — and should — take the issue up with the parent, again using the job description as an objective test.
More often than not, parents will, on some level, be aware of their children’s shortcomings. But they may not know how to confront the problem. One solution you can suggest is to transfer responsibilities in any areas in which the successor is deficient to another employee. You can point out that this can be an opportunity for the business owner to elevate the status of relatives or key nonfamily managers who might be disappointed that they were not chosen as successor.
After the successor has been selected, there are a number of roles you should assume as the mentor. They include:
- Career strategy advisor — providing general guidance and insight on the types of opportunities and experiences that the advisee should pursue.
- Individual development counselor — charting a specific career development plan that the advisee should follow in his or her formal process of development.
- Sponsor/mediator — making sure that the advisee gets the type of assignments essential for development.
- Monitor — evaluating ongoing performance so that the advisee can make further progress.
- Role model — furnishing an example that the advisee can learn from and emulate.
- Organizational analyst — explaining the dynamics of the company and its “politics” to the advisee.
- Liaison — introducing the advisee to key players inside and outside the company, including bankers, suppliers, and customers.
You should work out a plan with the business owner and his or her successor that sets benchmarks and intervals for reviewing progress. As long as your advisee is developing on schedule, you should gradually withdraw from the process.
Some hired guns don’t relish the task of teaching a boss’s relative the ropes. The process can add as much as 15 percent to your work load for a year or more. All for some kid with a fraction of your experience, who will soon become your boss. (See the conversation with Leonard Lauder, “The Sweet Smell of Succession”, Family Business, February, ’90)
But a mentoring assignment well done pays off. Mentoring is an opportunity to shore up your relationship with both generations of ownership; if you do a good job, you can elevate your personal status and influence in the firm. And to the extent your mentoring ensures future growth and profitability of the family business, you maximize your own job security and any profit-based compensation you receive.
—E.T.C.