Family company Boards must create and maintain strong succession plans that consider both internal and external talent, as well as development plans for potential successors—and do all this while balancing the values and priorities of the family with the demands of growing and sustaining a business.
Managing family relationships at work is one of the thorniest issues in family-owned businesses, particularly when relationships cross generations (e.g., parent-child or uncle/aunt-nephew/niece). Many family members are committed to professionalism and strive to separate work and family in their dealings with each other. However, simply decreeing such a separation between work and family is not enough.Both family leaders and the rising generation have work to do to ensure cohesion on a familial and business basis.
At Egon Zehnder, we have worked with family businesses around the world since our founding in 1964. We interviewed scores of family executives to better understand their sources of success—as well as their pain points.
One of the fundamental challenges of any family business is maintaining the balance between “family” and “business.” Within the owning family, there will be the same complex, interpersonal dynamics and conflicting aspirations and priorities that occur in any other family.
Managing family relationships at work is one of the thorniest issues in family-owned businesses, particularly when relationships cross generations, such as parent-child or uncle/aunt-nephew/niece. Many family members are committed to professionalism and strive to separate “work” and “family” in their dealings with each other.
The ability to give and receive feedback is a fundamental leadership skill. Feedback improves outcomes and results, motivates performance, brings groups together, clarifies goals and objectives, clears outstanding issues and inspires development.
Skeptics may consider them outdated because of a perceived lack of rationality. But family firms have proven both successful and enduring – as long as their owners understand how to leverage their specific advantages and overcome their disadvantages through clever management. Family firms need a tailor-made governance system that takes their unique complexities into account, for example. In the end, their success and their survival depend on one thing: a vision based on values that are shared by all members of the family. by Sabine B. Klein and John L. Ward
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