Helping a family owner make the most of their own talent
HUMAN CAPITAL
Context
A family in transition from fourth to fifth generation were seeking support in unlocking the potential of their own people. There was a sense that there were many capable next generation family members, but none were interested in helping the family business – and few had the knowledge and skills required to do so.
The situation stemmed from a decision taken by the previous generation to heavily restrict the opportunities for family members to work in operational roles. Over the course of a generation, the family had convinced its younger members to progress their careers elsewhere, leaving the impression that there was no pathway back to the family business.
With a critical leadership transition on the horizon, the family recognised the need for a new approach to re-engage the next generation and secure the long-term continuity of the business.
Work
The first phase of work focused on helping the existing owners to clearly define what roles they wanted the next gen to play, and by when. Modelling revealed a stark reality: the existing owners had around seven years at most to train up the next generation to start to take their places in Board seats.
Although the Family Council – focused on family communication, legacy, and early stage development – had identified a sub-set of the (large) fifth generation as having business potential and interest in the firm, this insight had not reached the business leadership. And no developmental pathways had been proposed. The G5 were blind to the opportunities and the G4 blind to the potential!
To bridge this divide, a Career Development Committee was created to guide the G4 over the next decade, with mutually agreed personal development plans to be signed off every year.
A new Family Employment Policy was written. Expectations on G5 on entering the business were clarified. Assessment processes were tightened. Career tracks that had been limited to outside the family firm became blended, combining both external and internal roles based on needs. Clear communication was established between this Committee and the Nomination Committee.
Impact
The programme achieved remarkable success, receiving high praise from the current generation of owners for its clarity and robust support mechanisms. By year four, the new generation of owners began to assume their roles on Op Co boards and by year seven, on the portfolio Board. This met the goals outlined during the project.
There was a sense from all that the programme de-risked what could have been a complicated succession, given the size of the family and the demands of the business.