Family-owned businesses are fundamental in the world economy. However, they are faced with unique leadership challenges. It is essential to embrace talent management and commit time and resources to identify and develop leadership qualities within the family business. This can prevent future leadership quarrels and succession conflicts in the business. The following are guiding principles in family business leadership.
Claudio Fernández-Aráoz, a leading global expert on talent and leadership, describes potential as the best predictor of future success. He believes that current abilities, competencies, or even experiences should not be considered during selection. The four qualities that characterize leadership potential are curiosity, insight, engagement, and determination. These abilities should be recognized and evaluated independently to identify those with stronger skills to learn and grow.
The process of identifying potentials in a family business can be faced with leniency and biasness. Fernández-Aráoz suggests a careful assessment of all age groups. These assessments must be carried out by an expert outside party to avoid conflict of interest and guarantee competency.
Develop Prospective Leaders
A strategic plan is required to evaluate the potential of each individual. This also includes selecting the specific and relative path to apply. People have different capacities for growth and development. It is crucial to identify the unique potential in the family. This provides the practical experience required to grow and develop abilities based on potential. It can also enable the chosen individuals to understand their abilities, strengths, and weaknesses.
Evaluate, Collaborate and Position
This helps identify areas that require further development and where experience may be required. The management shares their views on the selected individuals with high potential. The individuals also get a chance to give feedback and assess their motivation to fill those roles.
Personal issues, identity issues, and family circumstances are important to consider for those willing to remain in the family business. These factors may determine the role the individuals play in the business and their level of commitment.
Conducting open and honest discussions of each person’s motivations and possibilities can empower the incoming leadership to roles that can be filled by non-family members. Considering personal interests is crucial in identifying and developing leaders. This will ensure that future leaders are determined to achieve business success.