Studies conducted by various authors and organizations indicate that it is becoming increasingly difficult to be a successful leader. In fact, among the Fortune 500 CEOs over the last 20 years, 30% have lasted fewer than 3 years. According to the Harvard Business Review, an astonishing 40% of new CEOs fail in their first 18 months on the job. Statistics like those aren’t important. Usually. But suppose we’re talking about your successor. Do you want your successor – and in a family owned business that means your daughter or son – to be one of those casualties or do you want them to become part of the 60% who succeed?
Let’s begin by using a simple definition of “bad leader”. For our purposes today, a bad leader is simply someone who is or has become ineffective in using power and influence to produce results. In the blog about SOAKWU (Source of All Knowledge and Wisdom in the Universe), I listed the eleven deadly sins of leaders, most of which are some form of hubris or ego obsession or lack of emotional/social intelligence that makes them difficult at best, or impossible at worst, to work with.
Recently, I was having a cup of tea and overheard a conversation three people were having about the pending implementation of a succession plan at their place of business. Generation 2 is about to pass the torch to Generation 3, and the people at the table were talking about how quickly they could get out and form their own business when the big event takes place. Apparently, Generation 3 frequently exhibits many of the deadly leadership skill deficits.
How do you avoid such a defection in your own business, especially with your key managers? Well, golden handcuffs are one way, and sometimes the only way depending upon how impressive the skill deficit is of the upcoming successor. If the carrot is large enough to keep the people you need hungry enough, and the string just the right length, then you might have a workable solution – but you still won’t change Generation 3’s behavior. On top of that, you won’t really have done anything to foster personal and professional development and organizational sustainability.
So how do we handle development and sustainability issues? Since subordinates are not anxious to provide bad news or corrective feedback to their leader, one way currently being used effectively to develop key leaders, including family members, in many organizations is Executive Coaching.
Executive Coaches provide the honest and open feedback leaders and family member employees need to increase their awareness of how they come across to others. A study regarding the use of coaches identified the most common areas of coaching focus on: a change in level of responsibility; accelerated acclimatization to the organization; specific performance problems; and, most important for our discussion, an investment in the next generation of leaders.
What’s the ROI? Well, it varies from study to study. Significantly, no group has reported that coaching is “worthless”. Some executives who received coaching have placed the value between $100,000 and $1,000,000 according to the research firm, Manchester. But these are all abstractions. The real question is what’s the value to you of having your daughter or son achieve a higher level of success?
Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.
