Successful coaching: the next generation.

Who will run the business when Mom and Dad want to retire? What kind of leader will be best for the business? Which sibling is most qualified to take the reigns? Do any of them want to? What criteria should we use to choose the next leader? Should we consider candidates outside of the family?

Assume you have answered these questions and the shareholders have unanimously decided that a particular Son/Daughter is the perfect fit.

Now what?

Determining what factors will contribute to the success and continuity of your business into the next generation is probably the best investment you can make--well before the next leader spends his/her first day in their new position.

Particular challenges faced by family successors include:

* The founder's reluctance to transfer authority, control, decision-making--or all 3!

* Balancing expectations and demands of family shareholders not working in the business

* Trying to live up to parental expectations

* Leading, motivating and evaluating performance of non-family and family employees.

The question becomes one of how ensure that under the next generation successor, the business flourishes, the family maintains harmony, and each individual in the family business system achieves personal well being.

The importance of leadership coaching

Coaching has occurred for centuries. Many of us have had the good fortune to have benefited from the guidance of a special athletic coach, teacher, boss, friend or colleague. It is only in the last few years that "leadership coaching" has emerged in the business world as a profession. That is good news for managers and leaders in family and non-family businesses alike.

A "coach" enables others to achieve collective goals. A coach can mentor, counsel, advocate, motivate and sponsor. Companies are continuing to realize that developing their people is the best investment they can make. Leadership coaching uses a customized professional development program to meet the needs of the individual and align their talents with the goals of the company. Family firms contemplating leadership succession to a family member can increase the likelihood of success through the effective use of coach(es) for the next generation.

Qualities of an effective coach

When selecting a leadership coach, the following characteristics are essential:

* Impeccable listening and feedback skills

* Compassion and empathy 

* The belief that any changes begin with the individual being coached, and that he/she must make these changes of his/her own free will

* Being open and honest about their thoughts and feelings

* A true desire to see the individual succeed, and faith in their commitment

* A belief that the more effective the leader, the more effective will be their team and the organization

* Ability to maintain confidentiality and establish trust

* The willingness to ask the tough questions Who is the best personal to coach the family business successor?

Given the list of essential coaching qualities, an outside professional coach can be the optimum leader of the process. However, others can (and should) play a role in the coaching process, including:

* The founder/current business leader

* A member of the firm's advisory board or board of directors

* A senior, non-family executive in the firm

* A trusted member of the successor's professional network

* Internal senior human resource/organization development manager

First steps

All good coaching, starts with a plan. The plan should be developed jointly by the successor and his/her coach(es). Key elements of the plan include:

Assessment. Evaluate the successor's current level of competencies. A simple assessment involves defining the "ideal" skill set of the leader and mapping that against the successor's demonstrated skills. If the successor is already employed in the business, a 360 assessment is a good assessment technique. This involves:

* Selecting a group of people to provide feedback, e.g., the successors current boss, direct reports, select peers, customers, team members, advisors, shareholders and family employees)

* Conducting confidential interviews/surveys to gather each person's perspective of the successors strengths, limitations, and areas for improvement

* Reviewing the feedback with the successor and jointly developing an action plan for improvement in 2 to 4 priority areas.

Goals for the leadership development program. Whatever assessment technique is used, the results should be translated into developmental goals. Typical goal areas include:

* Leadership competencies, e.g. motivating, evaluating employee performance, strategic thinking skills, etc.

* Technical skills, e.g. finance, operations, marketing, etc.

* Relations with stakeholders e.g. employees, customers, suppliers, trade associations, family, shareholders, etc.

Action Plan. Document the objectives, tactics to reach desired goals and outlines of the coaching sessions. Coaching should occur in a mutually agreed upon location from 2 to 4 times per month and for no more than 2 hours at a time.

Timetable. Start the leadership transition coaching as early as possible. Plan to start at least one year prior to the target date for assuming the new role.

Follow Up. Plan for regular review of the action plan. In addition, touch base with the group selected to complete the 360 feedback at 6 months and one year intervals. Their assessment is a vital to evaluating improvement.

Coaching a family business successor through this critical transition can be immensely valuable for ensuring the sustainability and continuity of the family business into the next generation. Why not put your best foot forward!

Rachel Mickelson, MSOD, is a Partner with Doud-HausnerVistar.