Succession planning and the question “who’s best to lead the next generation?” is always a challenge for family businesses. However, many businesses (family and non-family) have decided that a co-leadership (i.e. selecting family members to run the business together) model works best. We had the opportunity to try co-leadership during our term as President and Vice-President of FFI. Here are a few things we learned that contributed to our successful term:
- Establish and build a mutual trusting relationship – This is the ‘foundation’, the single most important aspect of the co-leadership model. You have to trust your co-leader! We each trusted the other person’s abilities as a leader and knew that each of us had a similar vision for FFI. If one of us was unavailable due to travels or work, we trusted the other person to make any necessary decisions. This also helped the organization continue to perform smoothly. The following helped to build on the trust foundation that we began with.
- Decide how decisions will be made- Agreeing on how to make decisions if consensus cannot be reached is another critical component of effective co-leadership. No matter how well “matched” co-leaders are, there are bound to be times that consensus cannot be reached. We knew each other very well and had a good idea of what our respective strengths and weaknesses were, so we agreed in advance that if a consensus could not be reached, the person with the expertise or passion for a particular issue would make the final decision. For example, in a family business, where two sisters are co-leaders, the one with the expertise in operations would have the final say on plant improvements, if there was a disagreement. Both would then support the decision.
- Have frequent and effective communications-- We’re sure that the phone companies wondered about the dip in phone usage at the end of our term of office! Begin each conversation with an understanding of what must be accomplished and end with an action plan-- who will do what by when. Having open lines of communication (phone, e-mails, face-to-face) was one of things that really helped make our co-leadership work. Since we trusted (and respected) each other, we were able to discuss issues openly and completely in order to strive for consensus. Also, we realized that co-leadership required having a win-win frame of mind. It wasn’t Jane’s decision or Karen’s decision; it was our decision.
- Understand ‘triangulation’ and avoid being ‘triangled’ into others’( business associates or family members) issues. One of the potential problems that co-leaders can face is similar to a problem many parents face (i.e. Johnny asks mom if he can stay out late because he knows mom will say yes and dad will say no!). We made it a point to check with one another on important issues so that we could present a united front and not get side-tracked by others or ‘stuck in the weeds’. We should also mention an important and essential third member of our co-leadership team: Judy Green, the Executive Director of FFI. In family businesses, as well, often qualified non-family managers should be key players on the co-leadership team. This improves the credibility of the team and encourages buy-in and open communications and buy-in by non-family employees. I
Co-leadership worked extremely well for us. And, when it’s working well, one plus one equals more that two! We were able to accentuate the positives and minimize the negatives. Co-leadership is a viable alternative to naming a single successor in family businesses and more family businesses are exploring it. We’ve suggested some tips from our work. One additional point, the potential co-leaders need to be aware of their strengths and weaknesses and what some of the problem areas may be Even though (or because!) the co-leaders are related, there might be numerous factors that might interfere with their ability to work effectively together. Sometimes it is harder to admit that a sibling is much better at a certain task than you are but being able to recognize those differences and respect them is necessary if co-leadership is going to work. From our experience, we recommend co-leadership as a very effective alternative. It takes preparation and work but should be considered!
Co-written by Karen Vinton and Jane Hilburt-Davis