Preparing the Next Generation of Leaders for the Family Business: Part 2 of 4BondBeebe
Posting by Geoffrey D. Brown, CPA, Principal
In my last blog I talked about identifying possible leaders in the family business. Ensuring proper education and establishing clear standards for educational achievements is another important part of preparing the next generation of leaders for the family business. Many family businesses that have survived to the 4th and 5th generation have minimum education requirements before any family member can begin a career in the family business, let alone be considered as a successor.
When thinking about education for the next generation of leaders, there are two important areas to consider – formal and information education.
Formal Education for Family Business Leaders
For many family businesses, an undergraduate degree is a given and is the focus is on higher education. In today’s world, there are fewer and fewer business leaders who do not have their MBA. It makes sense, then, that your executive team would be on the same playing field as in other businesses. You need to consider a requirement that those in the next generation that are going to take over the business obtain their MBA. Even if it is not traditional either in your business or geographic area, you might consider the value of having the next generation obtain this advanced degree.
You may determine that an MBA is not required. The more important point is that any future leader has enough education to be able to understand basic business and management concepts as they might apply to your particular business.
Industry associations often provide specialized education opportunities; the next generation should be encouraged to join organizations that provide important networking and educational opportunities, as well as the opportunity to pursue helpful industry certifications. The right association will also expose young leaders to others’ experiences, both contemporaries and “elders.” This leads us to the next form of education to consider:
Informal Education Opportunities
I encourage you to consider a mentoring program for your next generation of leaders. This type of “informal” education can be invaluable for any young person who is learning the business and the industry. In addition, a mentoring relationship will help a young leader learn more about himself/herself and the type of leader he/she will someday want to become.
Mentors both from within and outside of the family business can offer useful guidance for young leaders. A seasoned professional can help guide the next generation through tough issues and business conflicts, offering guidance and insights and teaching important lessons that are immediately applicable. By assigning a trusted business associate or connection, you can help guide your next generation with more than just cold, hard facts and financial acumen – you can help provide intangibles like integrity, communication, commitment, and confidence.
I don’t want to overstate the need for a formal educational process for the next generation of leaders. As the current business leader(s) it is important for you to look at your marketplace, the current needs of your business and what the future may hold for your business when determining what forms of education are necessary for the next generation of family business leaders.
While education is important, it is not the only factor for successfully developing the next generation of leaders for your family business. In my next post, we’ll discuss principles for setting helpful guidelines around work experience for your potential successors, and how you can use those guidelines to help develop and evaluate your family’s young leaders.
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