Family Business: Mentoring the Next Generation

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Robin had Batman, Tonto had the Lone Ranger and Festus had Matt Dillon. In your family business, who do the next generation of leaders look up to? According to the latest American Family Business Survey, the vast majority of family-owned companies expect to transfer ownership and management to the next generation. Yet only a small percentage of these same businesses have a plan in place to develop future family executives. As a result, these family businesses may be negatively affected because next generation members aren't prepared to take the reins. Here then, are six ideas for mentoring the next generation in your family business – through formal mentoring, and in everyday life.

Assess successors' capabilities. At the heart of a sound mentoring plan is an assessment of young leaders' capabilities – educational background, personality, skills, interests, strengths and weaknesses. Once that assessment is made and discussed with successors, senior family leaders can develop a plan to capitalize on strengths and bridge developmental gaps.

Require outside work experience. Most family business experts recommend that family members establish an outside work history before being eligible to join the family business. Doing so allows them to experience different business philosophies and management styles. Outside work experience also enhances credibility with non-family employees

Work up through the ranks. Some family businesses require next generation members to "start in the mailroom" and work their way up. Some do this even if a family member has already had other successful work experiences outside the business. In this way, young leaders can learn about the family business from the ground up and have a well-rounded understanding of what other employees in the company contribute.

Plan a family retreat. How about taking some time away from the business to talk about where you've been and where you're going? Often, children come into the family business when it's already a success, so they may not fully appreciate the ups and downs of growing a business. Next generation members can learn from hearing the senior generation talk about the various stages the company has gone through to get to where it is today.

Tap into non-family executives. "Father knows best" doesn't always work when it comes to mentoring the next generation. Sometimes the relationship between parents and children is too close, or the relationship too volatile for objective mentoring. One alternative is to engage non-family executives as mentors to younger leaders. Nonfamily members may be able to be more businesslike and objective in working with the next generation.

Encourage the next generation to get in "over their heads." It has been said that we learn more from our mistakes than our successes. Give younger leaders the freedom and space to make mistakes. Ask them to handle a difficult situation on their own. Give them projects or responsibilities that they're not (quite) ready for. Being in a tough situation can be a great learning and confidence-boosting experience. Mentors can provide a safety net in some of these situations.

Listen and learn from the next generation in your family business. Create opportunities for them to listen and learn from you. Keep your family business in good hands by developing a plan for mentoring the next generation of owners and managers.

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Tandem Partners' family business advisors work with CEOs and other business leaders to help them achieve a balanced approach to family and business. For more information in developing, mentoring and providing opportunities for growth for the next generation in your family business, please contact Margaret Wilson at 443- 589-1152 or via email: margaret@tandem-partners.com .

Copyright 2005 Tandem Partners

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