Family business successions depend on incumbent leaders and successors working together to ensure a healthy, viable succession. Incumbent leaders and successors must acknowledge and work with each other’s values and priorities.
This blog post will look at some common leadership characteristics and values of incumbents and successors.
While these are general descriptions of generational tendencies, every leader will have a different leadership style. Not every incumbent or successor will align with this blog’s values, priorities, or characteristics.
Most of the current family business incumbents planning to retire are from the “baby boomer” generation between 1946 and 1964. In a blog post on our sister site, we looked at the leadership preferences of the boomer generation. Many incumbent leaders favor a more formal workplace hierarchy and value hard work, loyalty, and achievement.
Because they have invested so much of their lives and resources into their organizations, incumbent leaders of family businesses often feel a strong connection to their organizations. They tend to have a strong focus on continuity in the company. This might look like continuing practices that have worked in the past and holding on to things they feel attached to.
Studies show that many incumbent leaders also prioritize things such as:
- Ensuring that their family members have good relationships
- Ensuring that the future generations who will lead the company are capable
- Leaving a legacy
- Spending time with family
- Engaging in philanthropy, or making a social impact
On the other hand, successors inheriting family businesses can have priorities that are different from the incumbent leader’s. They are often eager to modernize and professionalize the family business and may create a legacy that is different from the incumbent leader’s.
Studies show that successors tend to focus on things such as:
- Creating a better-defined management structure within the organization
- Putting more emphasis on developing long-term strategy and creating plans that support that strategy
- Launching something new or doing something significant or special within the business
- Having a social impact
- Staying current with technological tools
Overall, successors from younger generations (such as millennials and Gen Zers) who believe the Gospel tend to prefer a relational, collaborative approach to leadership, and value working with people from different backgrounds. Successful successors tend to be creative and entrepreneurial and tend to focus on gathering and aligning family members more than their incumbents did.
Frustration between incumbent leaders and successors can happen when either side is only focused on their priorities without taking the values and priorities of the other person into account. For example, an older leader might want to emphasize family values in the business, while their younger ones often prioritize soft skills.
One way to remedy this is to establish a common ground and start the succession conversation by emphasizing what will stay the same first before moving to more difficult or controversial topics, such as what will change. As the succession moves forward, it is important for the incumbent and successor to understand each other’s values and have clear, two-way communication.
Chew On This:
How can the top values of the successor be implemented in the company effectively?
