There’s a well-worn saying that you must be able to lead yourself before leading others. And like any skill, learning to lead requires a personal commitment to strengthening what is already working for you and challenging the limitations that may be holding you back.
Personal leadership development is especially important for the next generation in a family business. Some of the next gen could have succession in their sights, others will have no interest, and many will be undecided about the role they want when the time comes for a change in the leadership structure of their family business.
The parental generation may be so strong that even if children have specific functional roles, they don’t get the opportunity to participate in decision making or leadership. They may not have the opportunity early on to learn crucial skills of management, negotiation, or planning.
Or, given their minor level of exposure, they may believe that managing the business is supposed to be easy and straightforward. Worse, they may assume that they know what to do simply because they grew up in the business, or that everyone will take them seriously because their family name is on the door.
Albeit an older study now and out of the US, in 2002 family coach and author Roy Williams published a 25-year longitudinal study by The Williams Group based on a survey of 3,250 intergenerational wealth transfers. If you’re unfamiliar with the study, it revealed that 7 in 10 families tend to lose their fortune by the second generation, while 9 in 10 lose it by the third generation.
Further to these statistics were three primary reasons that accounted for 97% of the failures: trust and communications breakdown, failure to properly prepare heirs, and no family mission[1].
Clearly leadership of self and others plays a significant part in this.
In our experience working with family businesses, we’ve found that many of the next generation are hungry to acquire the skills to lead well, and eager to arm themselves with the tools and mentorship to prepare them for whatever the succession plans looks like.
They don’t underestimate the value of so-called ‘soft skills’.
Personal leadership development also encourages a growth mindset and fosters innovation. Young leaders who undergo training are more likely to challenge the status quo, explore new opportunities, and drive the business forward. By cultivating a culture of continuous improvement and embracing change, they can lead the family business to new heights, ensuring its relevance and success in the future.
In its very nature, personal development can also focus on self-awareness and navigating the unique challenges of leading within a family dynamic, including managing family relationships alongside business operations.
One of the biggest challenges for emerging family business leaders – and there are many – is learning, often quickly and in the gaze of parents and siblings, how to balance the family legacy and the unique culture that distinguishes it from other businesses with their own personal leadership style and contemporary ideas.
Ensuring the next generation has the tools to lead and influence effectively is essential for the sustained success and growth of the family business.
FBA SA State Partner Hood Sweeney is running its next PEDaL program, Personal Effectiveness, Development and Leadership, beginning 25 February 2025. If you’d like to know more, speak to facilitators Martin Pike or Simon Starr on 1300 764 200 or you can download an information brochure here.
Learn more about the PEDaL Program
Hood Sweeney is a South Australian professional services firm with more than 46 years’ experience. With 140 staff in Adelaide and regional offices in Clare, Whyalla, and Kadina, Hood Sweeney serve more than 3,000 clients, including family businesses, small-to-medium businesses, and professionals. They provide Accounting & Business Advisory, Financial Planning and Finance, Technology Services, Marketing, and a range of consulting services for growing business, through Blue Jam, https://www.bluejam.com.au/. Hood Sweeney's vision is to be the pre-eminent integrated services firm for family businesses and professionals in their areas of industry specialisation, which include Agribusiness, Food, Wine & Hospitality and Healthcare providers.
