A person is a great leader of the family business. So they are automatically the right person to lead the family, right? Probably not. The skills are very different!
Here’s the view of Kathryn McCarthy, a Family Business Advisor and Family Office Expert:
How important are differences between leadership in the business and family?
Many families have a hard time, at least initially, articulating the differences between leadership in the business, in the family and in the family office. But the families that become more astute in leadership understand that the business leadership may not be the same as the family leadership, and the family office leadership may be very different from the family leadership. Different skill set, different ability, different style of leadership. The hardest thing is to wrench the family leadership away from the business leadership!
Can you give an example?
One woman was brilliant in her analysis of the family business leader, Joe, who was her brother. She said: ‘Joe is the CEO of our company, he is not the CEO of our lives.’ And she got Joe to give up being family leader.
What actions can enterprising families take?
The smarter families know they need to develop leaders, some to lead the business, some to lead the family, some to lead the family office, some to lead family investment activities, and some to lead the foundation. They are willing to spend money on human and intellectual capital, there is a process of inclusion, and there is a process of recognizing that people are different and have different capabilities. As they work on the process, and you really have to work at it, the family as a group comes to know where their space is, and then the leaders emerge.
BFF subscribers can find out more by logging into businessfamilies.com and watching our video Identifying and Developing Leaders.
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