Leadership. It’s a topic discussed everywhere. You can easily find leadership books, podcasts, and videos – wherever you look. Unless you’re talking about leadership within a family or a family business, that is.
I became interested in leadership as President of multi-family office Tolleson Wealth Management. Despite my business experience and management skills from a 35-year career, I quickly realized that I needed more. I attacked the problem — reading, listening, and watching everything I could find.
After a lot of hard work, things became clearer to me. Leadership isn’t about the leader – it’s about everyone else. It’s casting a vision for the organization, challenging and inspiring others, helping others align behind a common purpose, and removing obstacles to success. Knowing that Tolleson Wealth Management is a family business that serves complex, multi-generational families, it isn’t hard to see how my interest jumped from leadership to “family leadership.”
That’s where I got stuck. I couldn’t find much on that topic, and I realized there is a gap in resources focused on family leadership development.
A multi-generational family of wealth often begins with a family business. The business succeeds and begins distributing dividends or is sold. If the family stays involved in the business, decisions about ongoing leadership become more difficult and nuanced. Will future business leaders come from the family, current employees, or added from the outside? Aside from the uniqueness of having a built-in “pipeline” of family leaders in waiting, good leadership development practices remain critical in a family business. And what if the business is sold? Managing significant liquidity has its own challenges.
In most conversations, “the” leader of the family business – usually a CEO – is the focus. That may be an incomplete process because it ignores the needs of a wider family enterprise. The family enterprise is real estate, charitable foundations, family partnerships and trusts, and all the other “stuff” that a multi-generational family accumulates.
For many families we serve, a charitable foundation can be a springboard for leadership development. Young adults with no interest in being in the family business may have a passion for philanthropic efforts. If given the opportunity to engage, along with appropriate teaching and guidance, the result is a set of valuable skills — financial management, business decision-making, etc. — that are useful in other settings.
How do you go about building the leaders in your family? Start by understanding what each person is good at and how they react in day-to-day situations. Teaching and coaching support skill development. Working with peers or outside coaches creates feedback loops to build on day-to-day experiences. And finally, seeking out the opportunity to lead, even if you begin with smaller and less demanding circumstances, helps.
The need for family leadership has never been greater. How about your family? What will you do to help create the next generation of leaders?
Disclosures: This article was compiled by Tolleson Wealth Management. It was prepared and distributed solely for informational purposes only and is not a solicitation or an offer to buy a security or instrument or to participate in any trading strategy. You should consult your professional advisors before making any tax, legal financial planning, or investment decisions. Barron’s rankings are based on data provided by over 4,000 of the nation’s most productive advisors. Factors included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice, and philanthropic work. Tolleson Wealth Management did not pay to participate.
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