To successfully pass a family business down to the next generation, it’s critical to develop competency and credibility in the successors, as these traits are essential for multi-generational continuity. To achieve this, the family must be strategic in its developing of future leaders.

If you are running a family-owned and operated business, which you intend to keep in the family, the question is, are your next generation development processes effective? Here are three questions to ask yourself:

  1. Are my family members developing the skills necessary to effectively perform in their current and future roles in the family business?
  1. Are my family members developing the confidence they need to perform well in their current and future roles in the family business?
  1. Are my family members developing credibility among family, non-family employees, executives, and vendors?

The success of a multi-generational family business relies heavily on developing skills, confidence, and credibility within an organization. If the family member is incompetent, unreliable, or untrustworthy, it needs to be corrected quickly. Is the family member skilled and confident in their abilities? Have they developed credibility among executives, non-executives, and independent contractors?

Skills, competence and credibility are all interconnected; you can’t have one without the other. Thus, when you are taking a family member under your wing, their success begins with education and helping them develop the skills necessary to be competent. Once the family member becomes competent in a given skill, he or she will earn the respect of their peers and naturally, credibility will follow.

Competency is Critical to Multi-Generational Businesses

As with all companies, family-owned businesses thrive on competency. Family members need to be properly trained in various aspects of operations, but they also need to be given the opportunity to demonstrate their competence, combined with practical feedback. When the owner refuses to delegate and hand over power, it can lead to hard feelings and power struggles. It can also be counterproductive because family members are not being properly trained for larger roles.

One of the simplest and most effective ways to build credibility within an organization is for family members to learn through experience. Family can’t be afraid to work alongside employees; they can’t be afraid to do the hardest tasks and get their hands dirty. To be successful, family members have to keep their ego in check and avoid thinking that certain tasks are below them.

Developing Well-Defined Processes

Whether a family member has been working at a company for one year or ten, as they demonstrate their competence, they will become more credible in the eyes of stakeholders. In fact, credibility comes naturally as the stakeholders build trust and confidence in the family member’s ability to fulfill their roles, whatever they may be.

Essential to building a multi-generational business, includes developing a well-defined process for cultivating the next generation of family personnel. This next generation process must be clearly defined, well-understood and agreed-upon by family members so there is no question over expectations in leadership roles.

As you ponder the future of your family business, think about the impact of an intelligently-developed next generation process, one that focuses on developing: skills, competency and credibility. To get help creating a next generation development process, connect with one of our business coaches. We can help you develop, test, and measure the process’s effectiveness so your family can continue investing in the future of the business, and multigenerational continuity. Call me and let’s talk.