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The Role of Family Leadership and Why It Matters

By Mary Woods

The role of a leadership champion within a family business acts not only as a visionary catalyst to support and develop the family ownership advantage, but is key to building enduring success.

“People who hold this role provide leadership, inspiration and energy to help create high-performance, family-ownership dynasties,” says Joshua Nacht. “As the ownership group grows in complexity, both geographically and multi-generationally, the stakes are higher. There is a greater need for a family champion to unify the layers of diverse perspectives, support the owner’s goals for the business and create a successful enterprise.”

Nacht, a consultant with The Family Business Consulting Group, recently met with members of YPO’s Family Business Network and shared his experience in his roles as a steward, scholar and consultant to family enterprises. He serves on the board of directors of 73-year-old Bird Technologies as a married-in, third-generation family member. In addition, he is a second-generation owner of a real estate development and management company in Edwards, Colorado, USA.

“When we think of family businesses we often think of strife and infighting,” says Nacht. “But the ability to work with family members is a remarkable opportunity. You are building a stronger overall system that creates success is the business and in the family. Ultimately the family is fully on board, reinvesting in the business again.”

Becoming better owners

As important as the daily management of the business is, the non-operating owners can equally lead to a business’s success or its downfall. Working in tandem with the governance structure, whether through an ownership council or a board of directors made up of independent, non-family members, the family leader serves as the main communicator between the two.

“This really creates a cycle of engagement,” explains Nacht, “and the leadership champions provide a point of leadership, energy, motivation, ideas and brings in resources so the family can be more effective.”

The role of an effective family champion is multidimensional:

  1. Good interpersonal skills are critical as they manage the family dynamics. This includes a keen knowledge of family relationships and how individual members interact with one another, which is especially key when working across multigenerations. The champion incorporates the various generational perspectives into the decision making.
  2. The family leader has to have a true sense of purpose, responsibility and stewardship with regards to the best interest of the family and the business. They give of their time and energy but must also empower others to get engaged in the business acting as both counselor and cheerleader.
  3. As a leader, this individual taps into educational resources and consultants for families to learn from others who have experience in dealing with certain opportunities and challenges.
  4. The family leader asks the essential question: What is the goal for owning this business? They develop a vision as a family.
  5. They work constructively with challenges and don’t get hung up on challenges but learn to work though situations as a family.

Who makes the best family champion candidates? “The perfect age is right around 45 when they are old enough to have experience under their belt and young enough to connect with multigenerations.” Nacht also suggests families should look to a candidate who has had previous experience running a business or serving as a consultant or on a board.

“All these build trust and credibility within the family they start off with trust of their fellow family members and they build on this over time. This leads to a systemic support of the family champion and ultimately results in a stronger, more dynamic family business system.”

An award-winning writer and communications advisor to CEOs, Mary has been telling compelling and engaging stories for more than 25 years for leadership, education and arts organizations around the globe.