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Doing It Right
Succession and Stewardship: This topic area begins with an emphasis on family-owned businesses, since it asks them to consider several questions that will have a direct impact on their planning for succession and the stewardship of their businesses. The remainder of the discussion is relevant for all business. For those of you who are leaders in family-owned businesses, think back to the earlier conversation on the company’s purpose and its business idea. Is your business an entitlement for the young lords and ladies of the manor, or is it an ongoing enterprise serving a consumer base that holds demanding expectations? A family has the right to trade on its reputation and capabilities solely to create wealth for the family. The owners certainly can draw down on its value for the senior generation’s retirement or for the lifestyles of their children, grandchildren, cousins and spouses. What does that do to the commitment of those working in the company who are not family members, particularly the professional management team? On the other hand, consider the businesses whose owners seek to tend and grow the business as an ongoing enterprise. ,p> Do you believe that this purpose will ripple through the company and create different reactions among the workforce than the former example? Strategies for succession certainly vary between these two extreme camps. Perhaps the most disadvantaged are those companies living in the fuzzy middle realm because they are not honest with themselves about their motives or don’t have the courage to live them out boldly. Stewardship of any businesses requires getting the business ready to prosper in the future. There are many challenges for those trying to accomplish this goal. Some of these challenges require CEOs to wrestle with their own aging perspectives. They have to contend with the difficulties of anticipating changes that arise from innovations---innovations that demand fundamentally different business practices or perspectives than those with which they are familiar. Additionally, they have to skillfully grow and develop the younger talent existent in their organizations or recruit those who can carry the agenda forward. In preparing the future leaders, it is important to ensure they have the skills that will be required for success in the future, rather than replicating the winning formula of the past. How does the CEO teach what s/he may not know? How do you get organizational builders to move away from what worked for them and appreciate the limitations of an aging formula? The answer is leadership. It is incumbent on the owner(s), others in the senior generation, and the broader management team to be rigorous about testing their business assumptions and validating their strategies against current data. It requires an ongoing commitment to searching the broad market for signs of change. It is critical to avoid the tendency to assume that the future will simply be a continuation of the past. There are few businesses or industries that are operating under the same conditions that have existed for a generation or more. Why would we assume that conditions would be any less tumultuous for the next generation of business people? Anticipating relevant trends is a necessary corporate capability. Yet, we have no reason to assume that people are going to become more psychic. Therefore, companies need to reframe their strategies for anticipating what’s lying on the road ahead. This includes planning for multiple possible futures (see scenario planning). Companies have to recognize that they will be more successful at recognizing emerging patterns if they are partnered and allied with others who have compatible interests, but diverse perspectives. For example, working with your most sophisticated suppliers to identify what their most sophisticated clients are expecting from them, would be a source of interesting data. So would the savvy use of the Internet to track developments in other links in your businesses’ value chain. Another facet of such a strategy is a commitment to participating in the conversations of the marketplace. Developing young talent to become your future leaders as well as executives is a serious challenge. Leaders who are engaged in this responsibility need to keep in mind that being a good business thinker doesn’t automatically translate into being a good business teacher. Work to develop your teaching skills and use the daily work of the corporation as the practice field for developing your future leaders’ skills. The current leadership needs to adopt the mantra that everyone can learn from everyone. The CEO doesn’t have to do the teaching, but rather, only has to ensure that the teaching occurs. Expect and encourage thought partnerships to develop, and institute a process of shadowing so that development is an integral part of how the corporation lives its daily life, rather than being a self-conscious effort to attend to a few high potential performers. 13. An Effective Shadowing Process
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