Telos_logo_white.png

Copyright © Telos Group, Inc  All Rights Reserved

ABOUT

The Telos Group is a global consultancy that provides private, hands-on expertise and guidance for multi-generational family enterprises.

CONTACT

P.O. Box 214 West Chester, PA. 19380

  • White LinkedIn Icon
  • Judi Cunningham

Building Power by Giving It Away: A Succession Strategy that’s Smarter Than It Sounds

Updated: Sep 10, 2019

Susan had a problem . . . and an opportunity. The exciting news was that she had recently been named to be her father’s successor of their growing second generation family business. The problem, however, was that Susan’s older brother, Frank, had hoped to be the successor. Certainly, as the oldest male in the family, Frank felt a certain degree of entitlement to be the next president. This fact created some tension within the family, but Susan’s father had decided some time ago to form a Board of Advisors to help him manage the leadership succession process. The Board evaluated the capabilities of Susan, Frank and two other non-family managers. Susan’s experience working outside the business and her track record of success within the company made her an easy choice to lead the company. While Frank would admit that Susan was most qualified, he still felt hurt by the Board’s decision and struggled with resentment toward his sister.


Susan’s father was highly respected in the industry and loved by his employees. So in addition to dealing with her brother’s resentment, Susan also struggled with how to gain the support of her “father’s” management team. Susan summarized her challenge: “ I will never enjoy the moral authority that my father had, and I am not sure how to gain the support of my brother and the management team.”


Power vs. Authority The answer for Susan? First, she needs to acknowledge that while she has been given the authority implicit in her title as president, she can never be given the power she needs to effectively lead. We distinguish between the authority that comes from ones place in the hierarchy vs. the real leadership power that allows one to influence others behavior. In this case, Susan has been given the authority implicit in the title of “president.” This implies that she can hire and fire, determine production schedules, etc. However, to be a great president, she must earn the power to influence the behavior of her family and her management team. She can do this by a process we refer to as “participatory leadership.”


The Participatory Leadership Style This leadership style requires that Susan provide her team: i) a voice in all key decisions, ii) the right to express their opinions even if they are different from hers, and iii) a role in establishing goals of the company. In doing these things, Susan demonstrates that she is willing to be influenced by her team, and thus she earns the opportunity to influence others.

This leadership style also requires that Susan acknowledge that she may not know the right answer to a difficult tactical or strategy question. In fact, rather than act as if she has the right answers, Susan’s job is to ask her team the right questions. What’s the right marketing strategy? Susan’s job is to ask tough questions of her team about her firm’s advantages, its customers, the market, and the competition. What’s the right production schedule? Susan’s job is to ask tough questions about factory capacity, customer requirements, etc. By asking questions, Susan embodies the principles of participatory leadership and takes pressure off of herself to “know all the answers.” In other words, Susan does not need to be the “all knowing” leader like her father.


Leading Means Asking Questions While this technique of leading by asking good questions seems simple, it is, in practice, quite difficult. Try it for yourself: the next time a subordinate proposes a new idea or process, ask him or her three questions before you share any of your own thoughts about the idea. The questions should seek clarity about the idea and its feasibility. The difficulty is that the human condition strives to have our idea be the winner. Thus when there is some open space in a management meeting, we all want to put our idea on the table and then convince everyone else why our idea is the “right one.” The problem for leaders like Susan is that this “my-idea-is-the-right-one” attitude is disempowering to her team because it fails to acknowledge their capabilities. Ultimately, it is disempowering of Susan as well because it is impossible for her to have all the right answers. To act as if she knows all the answers is to destroy her own credibility. The challenge for successors like Susan is to trust in the counter-intuitive—that asking questions and acknowledging that she does not have the answers will help her team have more confidence in her.


The Power of Humility I’ve seen leadership transitions marred by a failure to embrace a culture of participatory leadership. The third generation successor of large food manufacturer lacked the self confidence to admit that other might have better ideas than him. It did not take long for the most talented members of his top team to leave the company and for the business to begin a long decline – one that continues today.


On the other hand, I’ve witnessed the brave efforts of successors who had the confidence to actively seek the advice and counsel of their team. It required also humility, for the successor had to admit that he or she couldn’t run the company the same way their father had, which is a more attractive feature in senior executive than you might ever have dreamed possible.

4 views1 comment