Only 30% of family businesses last into the second generation, according to the Family Business Institute. For first family business owner generations, this stat should raise the alarms. Especially when looking at the current leadership of your operation.
If you’re at the helm – how can you build the next generation’s to take over successfully to prolong your legacy? Or, if you’re still working on building that legacy – how can leadership support your business’ growth?
Luckily, you’re in the right place. Here, we’re answering all of the most frequently asked questions on family business leadership to help. So keep reading to learn all the family business leadership best practices you need for ultimate success.
How To Improve Family Business Leadership?
Once you understand the importance of family business leadership, you’ll begin to seek out ways to improve it. Here are the simplest methods to boost family business leadership success –
- Develop a clear mission and vision – Making sure the leaders, and family members involved, are aware of your family business’ mission, vision, and direction is crucial. When that mission is shared, everyone can best align their efforts to create a sense of purpose and mutual success.
- Invest in development – There’s a reason many of the most important industry’s are subject to career-long continuing education. Helping develop your family member’s leadership skills through ongoing education and investment, is another way to equip and encourage their skills.
- Seek expert advice – We get it. Navigating businesses with people you love can be incredibly difficult. Seeking outside consultants to help build and nurture family business leadership is a route that is often most successful, due to eliminating any bias or personal feelings.
What Are The Elements Of Family Business Leadership?
The elements of family business leadership involve a combination of skills, qualities, and practices that are required to effectively manage and lead that said business. Family business leadership typically includes –
- Strategic direction
- Relationship building
- Talent building
These combined with other traits like emotional intelligence, adaptability, work together to create a strong foundation for leadership in a family business, ensuring its long-term sustainability and success.
Why Improve The Leadership In A Family Business?
Not only will improving (and investing in) the leadership of your family business help boost the success of your business, but help guide the legacy of said business, too. For instance, family business leadership is often in charge of initiating and implementing succession plans which are crucial for long-term success.
What’s The Best Leadership Style For A Family Owned Business?
The best leadership style for a family owned business will depend on the unique family, and the unique business. Although there are a few specific types of leadership styles that are often the most successful at leading family businesses. Those include –
- Collaborative Leadership
- Transformational Leadership
- Servant Leadership
- Adaptive Leadership
- Authentic Leadership
It’s important to note that a combination of leadership styles might be needed in different situations and at different stages of a family-owned business. The leadership style should align with the business’s values, goals, and the strengths and dynamics of the family members involved. Flexibility and the ability to adapt the leadership style as needed are key to effectively leading a family-owned business.
What’s An Effective Leadership Style For Family Businesses?
Again, the most effective leadership style for family businesses will depend on that exact family and business. For instance, one leadership style may work for a 1st generation leader, while another is most effective or efficient for a 2nd generation leader. The most important takeaway to gather, is to be aware of the varying styles and conscious of implementing leadership strategies that work.
Because at the end of the day, the strength of your business will only be as strong as your family business leadership.
The Final Word – Family Business Leadership
No matter your industry, or business type, leadership is one of the core components you need to master to succeed. Of course, because family businesses mix personal and professional lives, sometimes it can be easier said than done when managing family members.
With that said, there are ways you can improve your family business leadership without having to be the bad guy. Let Double Iron Consulting help. At the helm of our business, is Bill Smith, a product of a successful generational business, who now helps others succeed the same.
Schedule a complimentary strategy call with Bill now, and connect on Linked In for more family business insight, news, and best practices.