Not Everyone Can Be the CEO
In the world of family enterprises and their ubiquitous challenges in transitioning from one generation to the next, there are a number of misconceptions that continue to plague those trying to help families get things right.
A pervasive one that’s a pet peeve of mine, is the focus on finding that one singular person who can take over the top job, let’s call them the CEO.
When you think about a business founder, the person who’s the “G1” (first generation) head of the family business, you typically imagine certain traits and characteristics that they likely exhibit and even exude.
I suppose it’s natural to assume that once they’re no longer around, the ideal replacement for them would be a clone, or the person who is most like them.
And that’s the first part of the misconception.
Not Everyone WANTS to Be the CEO!
Fans of TV dramas like Succession may believe that the members of the next generation of every family business behave like the fictional Roy siblings.
Now I’m not saying that their portrayal of the battle to succeed their father is completely unrealistic, or that the efforts they each made to try to outmaneuver one another never occur, but they are surely the exception, not the rule.
Additionally, as a Family business goes through each successive generational transition (G1 to G2; G2 to G3, etc.) those qualities of the original founding CEO become less and less important.
Already by G2, the leadership that works best is often very different from that of the founder.
And not everyone even wants to be the CEO.
Sticking with the Hollywood Theme
Having mentioned a TV drama, I guess I can stick with the Hollywood theme a bit longer, and invoke another misconception, or actually probably more like a “misquote” or “misnomer” that gets used far too often.
Whether it’s the Emmy awards for TV or the Oscars for movies, awards shows always honour two different categories of actors.
There’s one category for the “lead” actors and another for “supporting” actors.
But that’s not actually what they’re called, even though that’s the way most people say it.
It’s actually best actor in a “leading role” and “supporting role”.
OK, not a big deal, right? Or is it?
Maybe not in Hollywood, but what about in a family enterprise?
Playing Second Fiddle to your Sibling?
Let’s get back to the sibling drama situation we touched on earlier. These kind of superiority contest plays do happen, especially when they happen in an environment where there’s a “winner-take-all” mentality.
When things are seen as a contest to find the best person, and all others are less good, that “winners or losers” dynamic isn’t helpful at all.
While you can’t always make it disappear, there are ways to try to frame it as more about the roles than about the individuals.
Many Roles in Large and Complex Families
There’s something that I recognized after entering this field a decade ago that I hadn’t appreciated until I began working with several large and complex families.
It isn’t something that most people would consider, and even those in such families often need to have it pointed out to them before they eventually say, “Yeah, that’s true”.
I’m talking about the fact that there are usually several major roles that need to be played as a family enterprise moves from G2 to G3 and onwards.
Not Just the Roles in the Business
Besides the roles in leadership in the operating business, there are other key roles that someone from the family can, should, and hopefully will take on.
Governance roles are so important, and exist in various places and forms during the evolution of a family business becoming a family enterprise.
Family office roles, ownership council leadership, being the family champion and taking on leadership of a family council, leading a family foundation, being part of the board of directors, leading the education committee and being the Chief Family Learning Officer all come to mind.
These roles don’t start with a job posting and typically evolve as a family matures from one generation to the next.
They also come with various advantages and disadvantages, suit different kinds of people during different life stages, and are sometimes compensated and other times not.
Helping families recognize this is the first step to finding the right spot for each person who wants to participate.