By Craig Wortmann
One of the questions that is often asked by first generation founders of successful businesses is this: “Are we preparing the next generation in the right way, such that they are ready when we ‘pass the baton’ to them?”
This is a tough question, because there are often no clear answers. What is “readiness” and how do we know when the time is right? What types of learning opportunities are best suited to prepare the next generation? Giampaolo Consigliere, Executive Vice President and Segment Executive for Global Wealth Management at BBVA Compass, says, “A common concern of many of our clients is making sure their legacy is protected and their children are prepared to manage the family business and estate when the time comes.” He continues they often don’t know where to start.
One thing that is clear to all of us is that it is our responsibility as business leaders is to prepare the next generation to be smarter and better prepared than we were. And this means being deliberate about seeking opportunities to learn outside of our normal routine, and gain insights from people whom we would not normally interact with.
As our next generation takes on more and more leadership responsibility, we must create opportunities for them to gain outside perspective that allows them to see their challenges in a new way. Most often, successful family businesses do not have robust professional development programmes for the next generation, relying instead on on-the- job experience only. But this can be dangerous to the business. Why? Because if we rely only on “on-the-job experience”, we often fall victim to a myopia where all new information is filtered by an inner circle, and this narrow set of inputs can stifle innovation and kill growth. Every once in a while, leaders need to seek outside perspective and counsel.
The types of learning experiences that work best are hands-on, experiential workshops where participants get to ‘try on’ various leadership styles and techniques, and get immediate feedback. These experiences might include giving presentations in front of a group, handling employee objections, evaluating potential entrepreneurial opportunities, the ‘art of conversation’, and giving performance feedback.
By allowing our next generation a “pause” in an otherwise busy life and career, we offer them an opportunity to build the requisite knowledge, skill and discipline that will prepare them to lead their family enterprises.
Another key goal of any experiential programme is to motivate and inspire our next generation. It is often very difficult for second and third generation family members to live up to the standard set by the prior generations, and equipping them with new knowledge, skill and discipline is just one piece of the puzzle of their future success. We also need to explore their mindset as they grow into powerful leaders and people.
Any learning experiences that our second generation are exposed to should be designed to shift their mindset from an “individual contributor” to that of an executive decision-maker, and to help them understand the processes that spark innovation and to practice the tools that leaders use to inspire and motivate their teams.
For our future leaders, the proper mindset coupled with practical knowledge, skill and discipline is a powerful one-two punch.
Some clients of BBVA Compass are able to have their children participate in the BBVA Next Generation program, an intensive in-person training spanning several days that prepares the next generation to manage their business and wealth. Consigliere says that the bank has designed it to be that critical “look outside” that enlightens our participants and helps them to see their issues and challenges from another angle. The program explores and develops the most important leadership skills and disciplines and allows participants to practice these in a feedback-rich environment.
Craig Wortmann is a Clinical Professor of Entrepreneurship at the University of Chicago Booth School of Business and lead professor of the BBVA Next Generation program.
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