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Family Business CEOs Look Ahead— Volume 35, January 2023

Family businesses are distinguished by thinking and planning in terms of generations, rather than quarters. That long lens ties the family talent to the future of ownership, strategy, and evolving purpose, and penetrates every aspect of family businesses, from operations to culture to governance, in ways that are different from other organizational models. Because of this, the relationship between continuity and change stands out. 

The frequent disruptions, mounting uncertainty, and perennial crisis management of the past few years have weighed on long-term planning in family businesses. Change is happening so fast and so often that family business CEOs have told us that they have had to increase their organizational adaptability, to find new ways of advancing long-term continuity and engaging future generations across increasingly necessary transformational agendas. 

In our CEO study “It Starts With the CEO,” we heard from 153 family CEOs. In their responses, their emphasis was on the need for self-transformation in order to lead effectively into the future. Eighty percent strongly agreed that they needed to grow themselves in order to meet the challenges ahead. These CEOs stressed that the recent past had necessitated new attention to transformation, “from a proven recipe of success to a new recipe of sustained growth in the long term.” They called attention to increased efforts across their organization to embark on and enact change; most claimed to have witnessed a proliferation of new possibilities and pathways generating from their teams. Crisis necessitated this new willingness for experimentation and broadened family leaders’ approaches. “Suddenly, everything became conceivable,” one explained. Another proudly recounted that she was able to “understand that I can do many things differently than I thought, and that things do work that I thought were impossible.” Added another: “After six years on the job, I finally challenged my ability to drive change.” 

Blending the Old with the New

Driving adaptability through the ranks and across their organizations has been challenging, according to the family business CEOs we heard from. Many encountered increased appreciation for the more immediate decision-making and agility required today. Nonetheless, as one put it, “Transformation requires a lot of conviction,” and they are having to work hard to reach alignment over shifting strategic lenses and the resetting of performance goals with their executive teams and boards. In addition, the speed with which working environments have changed has left clear voids across organizations where old practices, networks, and structures are still in need of reinvention or repurposing. Thus, on both strategic and operational levels, many things are in a state of flux, and family business leaders are discerning what is most essential to keep and most important to develop for future success. 

In tackling these challenges, exceptional talent will prove crucial. In a recent article in the Harvard Business Review , our Egon Zehnder colleague Sonny Iqbal and our former partner, now Harvard lecturer, Claudio Fernandez-Araoz, working with finance professor Gregory Nagel, stress how important it has become for family businesses to refocus their talent management in these uncertain and more complex times. Given the traditional commitment to generational inheritance, continuity, and long-term planning, transitions like those we are encountering—massive, unpredictable, unavoidable, as well as potentially greatly opportunistic—are propelling family businesses into “the vortex of an unprecedented reshaping of global industries, financial volatility, and employee empowerment.” In confronting this, family businesses will be most empowered by doubling down on talent expertise and really concentrating on the “who” first and foremost (before the “what”)—on the very best talent capable of both changing and carrying the family mission into the unknown future. “Particularly in times of great change and uncertainty, enduring greatness does not start with a clear vision of what exactly you will be doing,” our colleagues argue, “but by making sure that you have the leadership team that can adapt to whatever comes next and perform brilliantly.” They go on to emphasize the benefits of investing in both the better development of high-potential internal talent as well as launching focused hiring efforts. 

Enhancing Core Principles

The family business leaders we spoke to are very clear on a few points: Above all, they want to make sure that they anchor any ongoing and necessary transformation to their company purpose and link this to their core values. As John A. Davis, a leading authority on family businesses and author of Looking Into the Future of Business Families, has recently stressed, family businesses have no choice now but to adapt, and those changes may be radical, or they may be gradual, or some blend of the two. Regardless, Davis’s mantra for their future is: “Build value according to your values.” 

To grow in this direction, family business leaders are seeking to keep nurturing the experimentation necessary to foster new growth and opportunities beyond the legacy business while doubling down on their central mission. As one CEO recently explained during the murky terrain of the past few years: “As a team, we translated challenge into opportunity to live our purpose and reinforce our values in real time by simply being there for our customers and our people.” 

Communicating and demonstrating real and accessible care and compassion across their organizations and beyond into their communities has always stood out for family business leaders. And it is being emphasized even more now. Many family CEOs tell us that the past few years have “increased my awareness of my social responsibility” and made them realize anew the obligation they have to all their stakeholders and employees. “I became more empathetic with the personal challenges people face daily in their lives and how it affects performance and well-being,” said one family business CEO. Sustainability for the future depends on the refortification of these commitments. “Companies need to play a role in being a stable part of people’s lives...as well as to ‘take a stand or take a seat,’” another family business CEO emphasized. By creating and demonstrating their company values, leaders are hoping to offer an inspiring example to customers as well as a “safe harbor to our employees.” With this focus in the forefront of their future approach, it’s little wonder that family businesses are often assuming a leading position in the current swells of ESG platforms. 

Whatever the change agenda, family business leaders are developing it around an ongoing commitment to continuity across time and over generations. While becoming more transformative themselves and encouraging the same in their teams and organizations at large, they are also focusing on long-held values and purpose, and strengthening these within the tides of change and augmenting social impact. To get there, they know they must stay willing and adaptable in both expanding their own leadership capacities as well as those of their existing talent and new talent acquisitions.  

The recent past has shown how decisive and agile family leaders and their teams can be in responding to unforeseen challenges and emergent opportunities—often to their great surprise. They fully expect to leverage and capitalize upon those lessons in the period ahead.         
 

Browse the Volumes

Volume 1: New Captains of Consciousness

Volume 1: New Captains of Consciousness

Infusing CEO leadership with social responsibility and accountability: Edelman reports that people are shifting their trust to relationships they feel they can influence, above… Read more

Volume 2: Supporting CEO Leadership

Volume 2: Supporting CEO Leadership

“We simply can’t learn to be more vulnerable and courageous on our own. Sometimes our first and greatest dare is asking for support.” Read more

Volume 3: Leading a Collaborative Enterprise

Volume 3: Leading a Collaborative Enterprise

CEO leadership is, by its very nature, a collective and relational endeavor. Still, we often speak of CEOs as if they are forces unto… Read more

Volume 4: The Uncharted Leadership Voyage

Volume 4: The Uncharted Leadership Voyage

The CEO turnover rate is at a record high and appears to be accelerating. How can we better prepare CEOs for today’s reality, where… Read more

Volume 5: The Boardroom as Leadership Laboratory

Volume 5: The Boardroom as Leadership Laboratory

CEOs struggle with developing their leadership teams; boardrooms are living labs for leadership experimentation. Why CEOs should expose their senior executives to board work… Read more

Volume 6: Cultivating Inquisitive Leadership

Volume 6: Cultivating Inquisitive Leadership

Curious, bold leadership is not something you simply have or don’t have; you build upon what is there, you learn it and continue to… Read more

Volume 7: CEOs and Stakeholder Capitalism

Volume 7: CEOs and Stakeholder Capitalism

CEOs face new requirements from stakeholders that calls for greater resilience and purposeful leadership. Read more

Volume 8: Demystifying Courageous Leadership

Volume 8: Demystifying Courageous Leadership

Coming to courageous leadership depends upon practice—it is the building up of small moments of courage, toning the cognitive and emotional muscles of boldness… Read more

Volume 9: In the Eye of the Storm

Volume 9: In the Eye of the Storm

Five tips for CEOs while they work to manage the business and create psychological and emotional safety for their employees during the COVID-19 crisis. Read more

Volume 10: Towards Scenario Planning in the Uncertainty of a Global Crisis

Volume 10: Towards Scenario Planning in the Uncertainty of a Global Crisis

After weeks of being immersed in immediate questions from COVID-19, CEOs are starting to tackle the challenge of preparing for what is next. Read more

Volume 11: Embracing Uncertainty to Accelerate to a Brighter Future

Volume 11: Embracing Uncertainty to Accelerate to a Brighter Future

All over the world, we are hearing CEOs ask the same question: What is the best way to lead and move forward when we… Read more

Volume 12: The Road Ahead for CEOs: Shifting Identity to Enable Change

Volume 12: The Road Ahead for CEOs: Shifting Identity to Enable Change

CEOs have stepped up like never before to do their part in accelerating the movement for justice and reconciliation forward. Read more

Volume 13: A Rising Tide: Creating Inclusive Systems of Leadership Selection

Volume 13: A Rising Tide: Creating Inclusive Systems of Leadership Selection

Since the U.S. erupted in racial protests, many CEOs have taken a public stand against systemic racism, pledging to help dismantle it. Read more

Volume 14: The Advancing Impact of CEO Engagement

Volume 14: The Advancing Impact of CEO Engagement

There is extensive speculation about the impact that leading through COVID-19 will have on the future of the CEO position. Have the past five… Read more

Volume 15: Beyond Resilience Narrowly Defined: The Practice and Impact of Positive Leadership

Volume 15: Beyond Resilience Narrowly Defined: The Practice and Impact of Positive Leadership

Principled, positive leadership is magnetic and indelible. It is what 2020 is calling for. Read more

Volume 16: Leveraging New Possibilities from Old Polarities

Volume 16: Leveraging New Possibilities from Old Polarities

Leaders today need to better manage polarities - but what are those polarities, and how do you reconcile them? Read more

Volume 17: CEO Leadership for a New Future

Volume 17: CEO Leadership for a New Future

The CEOs who seem to adjust best remain cognizant that “what got you here, won’t get you there.” Read more

Volume 18: Creating CEO Allyship for LGBTQ+ Inclusion

Volume 18: Creating CEO Allyship for LGBTQ+ Inclusion

By connecting on a shared human and empathetic level with their LGBTQ+ colleagues, CEOs have the means to enact real and lasting change, and… Read more

Volume 19: Revitalizing CEO Leadership

Volume 19: Revitalizing CEO Leadership

This is a promising moment in time for CEOs to consider how they want to show up as leaders, to listen for and look… Read more

Volume 20: Prioritizing People

Volume 20: Prioritizing People

CEOs are depending on their CHROs, asking: What else can we do to have a positive impact on employees and make a difference now… Read more

Volume 21: Creating New Pathways to Success

Volume 21: Creating New Pathways to Success

Five steps that take leaders through the process of devising options or alternative pathways to reach performance goals. Read more

Volume 22: Featuring “CEOs: Architects of Prosperity”

Volume 22: Featuring “CEOs: Architects of Prosperity”

Our new series, “CEOs: Architects of Prosperity,” has been created to highlight the expanding expectations for CEOs across a wide range of issues affecting… Read more

Volume 23: Balancing Acts: One Leader’s Approach Through Uncertainty

Volume 23: Balancing Acts: One Leader’s Approach Through Uncertainty

A lot of ink has been spilled around how to lead businesses through mounting complexity and uncertainty, but much of what might have been… Read more

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