The failure rate is enormous. 70% of first generation family businesses will not successfully transition to the next generation. Of the survivors, 90% will not transition to the third and of the very few remaining, 96% will not reach the fourth generation operations. As a family business owner, you know the statistics. You may even be able to recite the reasons most family business owners fail – 1) Inadequate Estate Planning, 2) Insufficient Capitalization, and 3) Failure to prepare the next generation for a leadership role.  

Leadership may be the single biggest gap in any succession intention. It may sound trite, but after all the legal work is complete, the buy/sell agreements are in place, the life insurance is paid for and the teams of advisors are back at their respective offices, someone still has to run the operation. Today that opportunity and obligation falls on you, the controlling generation. Tomorrow it may be your sons, daughters, managers and key employees. Are they ready to lead? 

~~~~~~~~~~~~~~~~~~~~~ (Continued from Leave a Legacy on AgWeb ~~~~~~~~~~~~~~~~~~~~~

Use the questions below to check your operation’s leadership readiness (yes/no):

1.     The next generation is accountable for specific responsibilities.

2.     The next generation is encouraged to promote new techniques, systems and methods.

3.     The current generation will allow the next generation to ‘stumble’(provided it does not unduly compromise
  the financial integrity of the operation).                                 

4.     Management structure allows for expansion because each person is responsible for specific areas
  of focus.

5.     The next generation is encouraged to develop mentor/protégé relationships with industry leaders, alliance 
  partners and/or educators.

6.     A leader’s primary responsibility is to develop qualified successor candidates.

7.     Leadership must be motivated by personal desire.      

8.     ‘Transparency’ describes the management style of the operation; every employee is informed and  
  enlightened about budgets, expenses, profits, etc.                       

9.     Leadership is the key to long-term operational growth and development.                            

10.   Outside education, workshops and seminars may be a wise investment for leadership development.

Do you have a realistic expectation regarding business preparedness? If you responded above with a majority of yeses, the operation may experience some significant breakthroughs and continual progress in the quest for creating a lasting legacy. 

Good leadership is not something you find. It’s something you develop. Successors are not entrepreneurs starting their own businesses; they’re managers who assume a going-concern with complex challenges they did not create. Leadership development must first focus on the culture. Are you intentionally creating an environment that fosters good leadership skills, where learning is a way of life and team members are encouraged to act?  

Family agribusiness owners are held to a high standard of accountability and responsibility. You are looked upon as leaders in the home, making decisions that ensure the family’s financial security. As the patriarch/matriarch, you are viewed as the bellwether for the family’s communal health. As an owner in the business community you are beholden to the needs of others – customers, employees, vendors, etc.  

In these multiple roles, a disproportionate share of your time and attention must be spent grooming the leaders of tomorrow. Our country, community and industry depend on it. An effective leadership selection and development process is essential. Just as a great manager is important to business success, a new owner is essential to the continued growth of the operation. As the current owner, you should have a defined process for selecting, and then developing, a capable successor or manager.  

There is nothing more important to organizational success than leadership. Leaders create vision, inspire people, and guide meaningful action. 

Legacy by Design is uniquely positioned to create personalized leadership development programs which can help family agribusiness owners to define roles and responsibilities, and prepare successors with the skills necessary to effectively lead the operation.  

Legacy by Design utilizes Strategic Leadership Development Assessments (from Management Research Group) which measure 22 leadership behaviors.

This leadership development model has the breadth and flexibility to provide and integrate a range of leadership perspectives – support for organizational strategy, illustration of current leadership practices, provisions for individual feedback, and information for group development decisions.

 
Using the Strategic Leadership Development process, we’ll help you:

-  Identify specific leadership practices needed to achieve strategic goals  

- Communicate these leadership expectations throughout the operation

- Build action and accountability into the leadership development process