Top Leadership: Who is Architecting Your Family Enterprise?
Dr. Pascale Michaud, Partner and Senior Advisor, Cambridge Advisors to Family Enterprise; Fellow, Cambridge Institute for Family Enterprise
Courtney Collette, Partner and Senior Advisor, Cambridge Advisor to Family Enterprise; COO, Cambridge Institute for Family Enterprise
How do high-performing and enduring family enterprises, with a broad portfolio of activities, achieve sustained success? Have we understood all of the roles and activities that truly make a difference?
Lasting performance of large family enterprise systems over generations is sculpted thoughtfully and stewarded over long periods of time. An essential ingredient to success is having an engaged family enterprise leader: An active owner seated at the top, or at the heart, of the family enterprise, with the highest- and broadest- level view of the entire system. This leader constantly shapes the enterprise and helps to steer the family on its journey together. We call this person (often one individual, but sometimes a few) and this role family enterprise leadership. Consider it the ‘top leader’ of a family’s shared activities and assets.
While vital to success, the family enterprise leader is an often over-looked, unnamed, and underappreciated role. This top leader is typically the family’s most capable, long-term thinking, integrative strategist in his or her generation. The role increases the probability of a family-sustaining significant value creation over multiple generations.
This article describes the family enterprise leader role, what is unique about it, and its main areas of focus. It also highlights why nurturing such a role and preparing for its succession and transition is critical. The profile provided is aspirational: we thank the numerous successful family enterprise leaders we have worked with for inspiring this collective account of benchmark behaviors, skills and mindsets.
Role of the Top Leader: From Loose Coordination to Proactive Shaping of the Enterprising Family’s Destiny
The job of the family enterprise leader is complex and sometimes unseen. The leader does not work alone, but in conjunction with other leaders and stakeholders in the family enterprise
system. The top leader’s primary drive is to foresee and plan for how the family enterprise system needs to transform in order to sustain long-term value creation. The leader keeps setting or proposing a broad direction for the long-term interests of the family and tenaciously drives strategy to reach these goals. The leader is working and thinking about the system-wide decision-making needs and the governance architecture as a whole, as he/she connects, aligns, and coordinates individual members, entities, and decision-making forums. The leader foresees gaps and risks, and anticipates how to allocate key resources and talent across the family’s various endeavors and activities. Perhaps most importantly, the leader is often an enterprise unifier, aiming
to build alignment across the family, family owners, and their entities and assets.
This top leader’s role focuses on forward-movement: shepherding the system onward to develop and implement a family vision. The leader also aims to safeguard the family’s values and reputation while ensuring that important decisions occur and adaptation to the system takes place. The leader tries for the system to maintain momentum particularly during delicate transition periods, including leadership succession.
And when these transitions stall, it is often the family enterprise leader who has the influence and authority to reignite movement, always keen to learn about good practices and approaches and to reach out to expert advisors.
How is Family Enterprise Leadership Distinct from CEO Leadership of a Family Business?
As a reminder, the family enterprise1 comprises all the meaningful activities and assets that a family is collectively trying to sustain through, or pass to, the next generation. This may include:
- The family’s core business(es)
- Other businesses, investment companies, and direct private equity
- Family assets and long-term investments
- Possibly a Family Office
- A Family Council; Shareholders Council; Boards of Directors; and other governance bodies
- Philanthropic foundation or social impact activities
- Other important activities that carry the family’s name and reputation or reinforce the family unity
1 The family enterprise concept and framework was developed by Dr. John A. Davis, founder and chairman of the Cambridge Family Enterprise Group in 2013.
Dr. Pascale Michaud
Partner and Senior Advisor, Cambridge Advisors to Family Enterprise; Fellow, Cambridge Institute for Family Enterprise
Pascale Michaud is an advisor to family enterprises throughout the world on strategies and governance models for their successful continuity. She advises multigenerational family enterprises on issues of corporate growth, business strategy and governance, innovation management, digital preparedness, leadership transitions, next-generation development, family governance, and family and corporate philanthropy.
Partner and Senior Advisor, Cambridge Advisor to Family Enterprise; COO, Cambridge Institute for Family Enterprise
Courtney Collette is an advisor to business families throughout the world on the design and implementation of family governance, strengthening of family unity and relationships, education and training of family members for future roles, development of the next generation, and succession planning. She is co-author of the book, Next Generation Success–a 10-year study of next-generation development in global family enterprises. She leads the Cambridge Institute’s education, conference, research, and publishing activities, and designs curriculum and education programs for family enterprises.
About Cambridge Institute for Family Enterprise
The Cambridge Institute for Family Enterprise is a global research and education institute dedicated to the real issues facing family enterprises. It is a place where progressive members of family enterprises come to learn, exchange ideas, develop themselves and position their enterprises to be not only successful but sustainable over generations.
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