Chapter 4 Third Leadership Imperative The Next Generation Family Business, First Edition, by Ernesto J. Poza Copyright © 2004 South-Western/Thomson Learning

Leadership Vision The next-generation leader provides a vision that rejuvenates the business and makes it competitively fit in the succeeding generation.

Successful Successors . . . Love the business and know it well Know their strengths and weaknesses Want to lead and serve Are guided by earlier generation, advisors, and board of directors with outsiders Have good relationships with other members of successor team

Successful Successors . . . continued Can count on nonfamily managers to complement their skills Have controlling ownership or can lead through allies Have earned respect of nonfamily employees, suppliers, customers, and other family members Have personal skills and abilities that fit strategic needs of business Respect the past and focus energies on future of business and family

Training the Next Generation Heirs should learn early that family business means stewardship and responsibility Training suggestions Allow young family members to work for a salary Provide youngsters with expense account to teach financial responsibility Compensate young family employees at market rate and provide performance reviews

Successful Sibling Teams . . . Understand interdependence and willingly subordinate as necessary Understand that their skill at collaboration results in win-win or lose-lose Appreciate how their abilities and skills complement others’

Sibling Teams . . . continued Have a decision-making process in place Manage interdependence by making goals, roles, relationships, ground rules, and feelings explicit Feel as if they would choose their siblings as partners, even if they weren’t family

Cousins Consortium Members . . . Depend on a strong legacy because of greater distance between family branches Maintain a balance of power among family branches Do family business through forums, retreats, assemblies, councils, etc. Have many opportunities for family participation

Leadership Responsibility “Each generation has the responsibility of bringing to the business their own vision for the future of the business.” —Samuel Curtis Johnson III, Retired Chairman, S. C. Johnson, a Family Company, Inc.