Identifying Leadership Characteristics

In both the company pipeline and the family pipeline, one way to ensure successful leadership continuity is to identify, foster, and mentor desirable leadership characteristics in nonfamily employees, family members who are already in the family business, and those who intend to be.  The other way is to identify, prevent, reverse, or offset the characteristics that can stop or derail otherwise successful leaders. For example, one young potential leader had grown up excelling in tennis-singles. He had learned that he should depend on himself for his success. He was a quiet, introverted young man who had great analytical skills and could figure out many problems. When he started to work with others in college, he began to have problems. He figured out solutions himself and then wanted everyone else to adopt them. They were often the right answer, but he alienated the others on his team who wanted to have input. This problem gave his folks the opportunity to discuss the importance of involving others in teamwork and in engaging followers as a leader. It took him a while to understand this concept, but with some supportive feedback and genuine exploration of the problem, the young man learned how to use both his intelligence and collaboration to work more effectively with others. His commitment to addressing this issue gave his parents confidence that he could be a potential candidate for leadership in the family business at some time in the future.

Good leaders create good teams. They inspire and motivate others to do their best. This increases output and profitability. Bad leaders do the opposite. And there are many bad leaders. A 2008 Internet survey by Curphy Consulting[1] found that only 38 percent of employed adults would be willing to work for their bosses again. This is a dismal indication of the pervasiveness of bad leadership.

Family businesses have a huge vested interest in identifying the characteristics that predict success or failure in family members as early as possible. By no means are personality characteristics the only predictors of success or failure. Business knowledge, connections, intelligence, and a number of other factors also affect success. But personality traits constitute such a large component of prediction that it is well worth identifying which family members possess the key characteristics of successful leaders. Assessment tools are now available to allow human resources professionals and families to identify and develop many predictors early in a career or even before the age of employment. Leaders also have different values and motives than non-leaders—measures of values and motives can assess whether and to what degree an individual has the motives and values of successful leaders.

The effort to identify characteristics should precede training efforts because you can’t impart a skill or ability that’s incompatible with a person’s core traits. Training based on trait assessments leads to significantly more behavior change than training not based on any trait assessment. Development plans based on trait assessment and 360-degree feedback (performance reviews by people above, below and at an employee’s position in the company) provides a foundation for success that most companies’ training efforts ignore.

In addition to the drivers and de-railers of leadership discussed below, it’s helpful for the family business facing leadership transition to begin by looking to the future. Often, we assume that a business should be led in the future the way it has been (successfully) in the past. Instead, we should consider where the business is heading and what type of leadership will be needed in the future.  Consider:

• What is our business and competition likely to be like, five to ten years from now? 
• What different challenges will tomorrow’s leader face than those faced today?
• What different competencies and skills will tomorrow’s leader need to possess than today’s?

For instance, if a small family firm realizes that in the future it will face more competition from larger competitors with whom it can’t compete directly on buying power, research and development, then tomorrow’s successful leader will have to be much better than today’s at alliances, joint ventures, and partnerships. Future business leaders will have to be better than today’s at networking, getting intelligence early through many sources (wide-ranging curiosity), building relationships, negotiating and managing boundaries with partners, joint ventures, and alliances. This kind of information also helps prevent the business succession planners from worrying about offending the current leader if they don’t simply try to clone him or her  The needs of the business should drive the process.

[1] http://www.leadershipkeynote.net/ (Accessed January 29, 2010).