Must family successorst'the best"?

By Craig E. Arnoff. Ph.D.

Families who favor their own for leadership roles, however, should take care to avoid certain potential difficulties.

The behavior of successor leaders can have a tremendous impact on their acceptance by constituencies both inside and outside of the business. Being respectful. appreciative. open to listening, and willing to work hard are key factors in gaining credibility. In many family businesses that we know of, early, rigorous hands-on work experience has created empathy and fostered ease of relationships with employees.

Another critical attribute is that successors recognize their own limitations, understand that they don't "know it all," and grasp the critical contributions of non-family executives. The strengths of others can compensate for weaknesses in the family leader. Recognizing this truism is important, but equally important is recognizing the dependency. vulnerability, and risk of poor human resource decisions that this circumstance creates.

Having a solid, experienced, wellmanaged board of directors can help insure against problems that can arise due to shortcomings in experience, education or judgment. The board should devise methods to both support and evaluate executive performance.

As a c.e.o. in a family business recently observed, "You're only as good as the people who work for you." Given this dependency. it is critical that non-family executives are properly rewarded to ensure proper motivation relative to performance and longevity.

Family members can and often should be favored for leadership positions in a family business if the following conditions are met:

. Potential leaders work hard to demonstrate their ability. preparation and capacity to add value through their leadership.

. Potential leaders' personality and conduct inspire respect and confidence.

Potential leaders understand their limitations and accept input designed to improve their performance and decisions.

. Owners hold family leadership opportunities as a goal of ownership and perceive the process of choosing successors to be fair in terms of access and selection.

. Systems are in place to ensure family and non-family leadership accountability.

. The business has the capacity to attract. motivate and retain outstanding non-family executives.

"My genius is the ability to employ men more capable than I am," Andrew Carnegie famously said.

You don't have to be "the best" to lead your family's business-but you should be very good, and very good at working with those who help you to move the business forward.

- Dr. Craig E. Aronoff is a co-founder and principal x'ith The Family Business Consulting Group Inc., Marietta, Ga.: (800) 551-0633. He can be reached at a ronoff@ efam i Iy bu s i ne s s.com. Reprint ed rtith pernrission from the Family Business Advisor, a coptrighted publication of Familr Enterprise Publishers. No portion of this article nay be reproduced x.ithout pernrission of Familr Enterprise Publishers.