How family businesses can create next-level leadership

A purposeful part of my work involves helping family owners of private companies take a big-picture worldview and develop a strategic focus on creating positive change for their communities, their business and society. In a recent discussion with next-generation family business leaders, it was clear that they are also thinking about these weighty topics and looking for perspectives about how to become the leaders we need.

Leading through a global crisis with family values

During our discussion, we explored topics in a book written by my colleague, Blair Sheppard. The book, Ten Years to Midnight, talks about several interconnected global challenges. Blair suggests that we are on the cusp of an epic crisis, brought about by the combination of technology-induced problems, lack of effective leadership, inherent distrust in governing institutions, and disparity of prosperity across age and geographical demographics. 

Private, family-run businesses are uniquely positioned to help lead solutions to these crises. According to the Edelman Trust Barometer, family businesses are consistently rated as the most trusted organizations in the world and are known for upholding the values we need right now. Civic and social responsibility are embedded in the DNA of family business leaders, who tend to have the right mix of a high-level perspective and long-term thinking that can affect significant change. 

Combining old ideals and new ideas

The skills required of the leaders who have brought us to where we are today are different from the skills and new ideas that will be needed to chart our path forward. To solve our current crises, we need leaders who possess the unique combination of upholding the old ideals while generating new ideas. 

Creating next-level leadership

When I talk to next-gen family business leaders about this, they agree that we’re in a crisis and that change is needed. They agree that they should step forward to lead, but they’re unsure about how to get started. Let’s talk about ways to do that:

1. Put yourself out there – Many family companies are private about their personal views and values. Harkening back to “being in the arena” and “daring greatly”, you can’t wait until things are perfect before taking a stand on an issue that affects you, your community and the world. We need you to step out there a bit more and show how you and your business are living your values. 

For example, one of our third generation agriculture and consumer goods family businesses has been extremely private for generations. Recently, they realized it was time to speak out about their environmental activism and inspire others to hopefully do the same. 

2. Bring in new expertise – Your family has probably had a loyal group of board members, advisors and supporters for many years who have challenged and guided the business and the family. Those voices are important. But what got us here, may not get us there. I encourage you to consider bringing in new perspectives, which can include non-family directors with new expertise—expertise to help you explore different opportunities and lead confidently into the future.

3. Value the values – Your family business was likely built on a strong set of values established by the founder(s). Families place significant focus on ensuring its family’s values are central to how the business operates. Lean into those values and let them help guide you as you create new policies and meet new needs. 

For example, one of our fifth generation family business clients in the consumer space saw an increase in demand this past year and realized that the pandemic actually highlighted the fundamental values of their company. They are making healthy products in sustainable packaging in a responsible way and it’s resonating with consumers more than ever.

4. Connect with your community – If you were raised watching your parent or grandparent run the family business, then you probably understand the powerful link between the success of a company and its community. As our world becomes more global, you should expand your frame of reference and understand the localized impacts of organizing and leading a business. However, each family business should focus on their “communities” to drive impact in society.

For example, an individual I work with mentioned that he wasn’t feeling the effects of the quarantine because his family was ensconced in their spacious beach house. Then he talked to some of his employees in South Asia and realized they had more than ten family members sharing a thousand square feet, all the while trying to work and parent simultaneously. His empathy for their situation caused him to create more flexible WFH policies.

In another example, one family business leader I work with is heavily involved with protecting his city from rising sea levels related to climate change. He’s able to understand his community as a total system and is making significant contributions to help save the hometown he loves. 

5. Get all generations on board – You need to win over your family before you can win over the world. Some family members, particularly senior generations, might disagree with your proposed changes and you’re unlikely to get anywhere by arguing. Before trying to change anyone’s mind, take the time to show them that you share their values and understand their point of view, including the sacrifices and choices they’ve made for your family business over the years. Senior generations have led the family and business through previous crises and can add perspectives to successfully navigating the choppy waters. 

Tell me what you think. What can you, the rising generation of family business leaders, do to create change in your life, in your business and in the world?

Special thanks to Dr. Justin Craig for his insights into the discussion.