You will never have a completely bad day if you show kindness at least once.” — Greg Henry Quinn
It might seem like a lifetime ago, but remember back in January when you intentionally set your 2019 goals?
My desire to get things accomplished can be challenging sometimes, especially when I’m stressed.
Great vision without great people is irrelevant. – Jim Collins
It’s an often quoted statistic that the majority of family businesses don’t get passed on to the second generation, and the vast majority of second generation businesses don’t get passed on to the third. Finding a thriving fourth or fifth generation business equates to finding that rare unicorn.
The issue wasn’t that these businesses weren’t successful or that they simply got wiped off the map. The issue was more likely related to a lack of attention towards succession planning.
More than 8 out of 10 family businesses have no succession plan.
The critical need for sustainability and business continuity is talked about frequently, and succession plays a huge role in both. But succession gets super complicated super quickly in family businesses.
Not only must you manage the complexities of the business while finding the folks who can lead exceptionally well and model the culture you’ve created as they set a new path into the future – you must also manage all the intricacies of the family dynamic.
Perhaps you’ve asked yourself some variation of the following:
- Is there somebody in our family with the will and skill to run this business? And have they developed the leadership required to execute on the vision?
- If there are multiple family members interested in running the business but I can only choose one, how will that affect our family dynamic?
- Are the kids in the next generation even interested in the business?
- When do we look for a non-family executive to lead the business?
The underlying psychological elements in answering these questions complicate succession and are compounded by the challenges felt by owners.
Sometimes the current CEO of a family business is insecure. They worry that if they identify their potential successor, that will demonstrate that they are less committed to the business. But identifying a qualified successor and putting a succession plan in place is a statement of supreme confidence and commitment to the long-term health and sustainability of the business.
Successful succession planning in a family business requires a few basic building blocks:
- As a leader in your family and family business, check your ego, fears and insecurities. Instead think about the legacy you want to leave by creating a succession plan.
- Make sure that you have a good process to help you identify the most qualified successor. Sometimes successors are chosen because of family relationships and not because they’re the best person for the job. Having a good process can alleviate these concerns.
- Understand that your successor is going to do some things differently than you. Choose someone who can adapt to change and carry out the future needs of business needs.
- Identifying someone as a potential successor doesn’t mean you’re promising them a guarantee. They should demonstrate that they are the ideal candidate based on the leadership behaviors and skill required.
- Remember there is typically more than one role that will require a successor. Develop leadership at all levels of your business, and provide a framework and success measurements to establish next-gen leader readiness.
- Consider bringing in a third party to help facilitate the process. Somebody who doesn’t have the same level of emotional and financial investment that you do, means they can potentially see the situation more clearly. They can propose solutions and offer objective clarity and guidance.
The big question to ask yourself is:
- If you were to retire tomorrow do you trust the person that you’ve identified and hopefully developed to keep the business robust and high performing?
If the answer is no, you need to work on succession.
When it comes to effective leadership in family business, the leader’s job is to help develop and ignite the potential in the people behind them. They have a responsibility and opportunity to leave things better than they found them. One of the key processes to do that is succession. It allows family businesses to be competitive, sustainable, and successful far into the future.
Succession planning is really just making sure that you have the necessary talent to step into the key roles to ensure success down the road.
How are you creating a culture where each leader can optimize their purpose, passion, and competency in a way that prepares your business for the future?
We believe that Values Based Leaders have the potential to influence their organizations in amazing ways. When these leaders’ potential is unleashed, they do great work, support the success of others, and foster an environment that inspires more and more leaders to carry the organization forward. Development of leaders is an investment that can pay back huge dividends – but only if those leaders are recognized for what they bring to the table, only if they aren’t held back from making their greatest contribution.
In most organizations, there are unrecognized leaders who believe passionately in your mission, behave in consistent alignment with your values, and demonstrate your stated leadership competencies effectively… who are not seen because they don’t match the unstated expectations or norms of leadership. What might it mean for your organization if their leadership was unleashed?
In our last post on this topic, we addressed how this can be true for introverted leaders. After all, a recent study revealed that 96% of leaders and managers identify as extraverts. Do you recognize effective leadership from those who don’t?
Similarly, the 2019 Women in the Workplace study reported that three quarters of executive leadership positions in organizations are still held by men, despite slow but steady increases in female leadership over the last several decades. This means that the examples of successful leadership that most people have observed in their organizations, are most often examples of extraverted, male leaders… not to mention overwhelmingly white. Adding the dimension of race to that of gender sends the percentages in top leadership positions plummeting.
In her 2013 bestseller, Lean In, Sheryl Sandberg encouraged women to be more assertive in advocating for themselves, and to see and claim their own place at the table. These are important messages – it’s hard for others to see something in us if we aren’t showing that we see it ourselves. But in recent comments, Michelle Obama struck a chord with many women when she declared, “It’s not always enough to lean in, because that s— doesn’t work all the time.”
So how can organizations effectively evaluate the potential impact of leaders, regardless of gender? And what might be possible if that leadership were unleashed to help them solve their most difficult challenges and to realize their greatest aspirations?
Start with this simple exercise:
- Make a list of all the characteristics that are shared by the majority of your organization’s most successful leaders. This list might include things like integrity and good communication skills, as well as things like educational background, race, gender, or personality style.
- Mark those characteristics that are directly linked with the success of your organization – these are most likely connected to your organizational values or the specific competencies that are needed in your industry.
- Next, circle the remaining items. These represent potential blind spots. Since most successful leaders in your organization possess these, strong associations may have formed that influence decisions on hiring and promotion.
Making your values and leadership competencies explicit in your organization is the first step to developing more successful leaders. But unless you also recognize that blind spots exist, you may miss out on exceptional leadership talent.
What will you do to unleash the leadership potential in your organization?
When it comes to transforming culture, using Values Based Leadership (VBL) as the foundation can be a huge game-changer. Organizations that foster a values-based approach to leadership create connections that have a significant impact on organizational outcomes—including higher levels of engagement, lower levels of turnover, and increased alignment around a company’s purpose and mission. Clearly articulated values, and the behaviors that support them, help guide team members in the way they interact with each other and with clients or customers.
It’s important when establishing the values for a company to have many voices in the process. We’ve seen organizations where one leader has strong ideas about what the values should be and then does all the work to the exclusion of their colleagues’ involvement. This approach does not have the same payoff as a group of folks who are fully invested in the organization working together to articulate what really matters regarding the culture. There’s more buy-in when it’s a team effort and not just one individual’s idea!
At InnerWill, we believe that every person is a leader and that every person has the choice to lead and live and work according to their personal values. However, if you want a culture to take on the values and the behaviors that the organization has articulated, it’s imperative that the leadership of the organization models them. It would be so much easier if organizations could change from the bottom up or even from the middle, but organizations don’t work that way. Most organizations are driven from the top down, with senior leaders at the controls. They determine if a culture moves, which makes them the real change-makers.
Modeling is one of the most powerful tools in the leadership toolbox. The idea is simple: If you want others to do something, you must do it first. Values lose credibility when leadership talks the talk but doesn’t walk the walk. Senior leadership needs to model the new behaviors required by the culture they want to create – and not just modeling success but also making mistakes, and then acknowledging those mistakes and moving forward better and stronger. Because, in fact, that’s what everyone will be doing in the process. Learning, making mistakes, getting back up and doing it again. The more that leaders can be intentional about living the behaviors that have been articulated and the more they can repeat these behaviors, the more neuropathways are created and the easier it gets. It becomes more and more automatic over time.
Once the senior leadership is aligned and the values are articulated, it’s time to roll them out to the organization. This means integrating them into everything from orientation and trainings to recognizing and rewarding values-centric behaviors. Encourage and initiate Values Based conversations. Start a meeting by focusing on a particular behavior. Talk about what it means, what it looks like, where it shows up, and when it creates challenges. Ask, “what difference would it make if every associate could live into that value behavior a little bit more?” Keep the conversations going and keep the behaviors fresh in people’s minds.
Give affirming feedback to people who are demonstrating those values behaviors. Ken Blanchard talks about taking a few minutes each day to affirm what people do well, give them some developmental feedback and remind them of the mission of the organization. This approach is very useful in moving towards a Values Based culture. Building a Values Based culture takes a deep commitment and a lot of work, but when the time and energy is devoted to doing so, the results are incredible!
What’s something that your organization is doing to transform your culture and make it ever better?
Organizations are like sponges.
The messages leadership sends through an organization get repeated and ultimately come out in what associates do and sometimes even end up believing. I’ve found that when we positively reinforce the types of things we want to see; they begin to happen more and more — and sometimes at an exponential rate.
Whether we like it or not, people can be turned off by the diversity and inclusion conversation. They can immediately put up walls based on their own set of beliefs or experiences. I believe the fastest way to get the ball rolling is to share concrete examples of how and when a diverse workplace has helped a team perform at a higher level and then celebrate these stories by sharing them throughout the company.
Leaders must intentionally create an environment where associates feel they can safely express themselves and where specific concerns can be raised with transparency and confidence.
This means building a culture of trust and feedback.
One of my personal fears is that without a diverse workplace we defer top talent. Consider that ideal candidate that has everything you’re looking for.
They want to work at your organization, but when they come in for the interview they don’t see or interact with anyone they can identify with. And because of that, they may question whether they will be welcome or able to thrive. This thinking could lead them to accepting a job elsewhere.
The climate of the era
I was recently on an airplane and watched the movie On the Basis of Sex. In it was this quote “A court ought not be affected by the weather of the day, but will be by the climate of the era.” Meaning laws should not be rewritten based off trends, but as society systemically changes over the course of a long period of time, laws may need to be modified.
I deeply believe that the diversity and inclusion conversation is not the weather of the day, but the climate of the era. Therefore, just as laws must change, so must business.
Giving everyone a voice
At Luck Companies we use a tool called Insights Discovery. It’s a personality assessment that helps identify personal style preferences and those of others. We have found Insights to be incredibly effective across backgrounds and roles. The Insights Discovery methodology uses a simple and memorable four-color model to help people understand their style, their strengths and the value they bring to the team. A better understanding of self and others means that relationships at work can become vehicles for, not barriers to, business success.
Insights reinforces the value that different styles, perspectives and experiences bring. We’ve used this tool to construct teams across the organization and have seen the positive results when we have teams built with a mixture of style preferences. Our teams have seen this work and believe in the philosophy.
As leaders, our job is to take this same mindset and broaden it to all types of diversity. Because a more diverse and inclusive workplace is better for everyone.
Steve Case once said “We need everybody on the field, actively participating. We are not going to be able to maintain our lead as the most entrepreneurial nation in the world if half of our population is on the sidelines. We need to be far more inclusive.”
By building more inclusive workplaces, organizations can bring the best talent forward and gain the competitive edge. How are you building a more inclusive workplace culture?
Today companies are finding themselves in a unique position. Unemployment across the country is hovering somewhere between 3% – 4%. Even in the hardest hit, most economically depressed areas it’s around 10%, and in some places it’s at a record low of under 2%. At the same time, almost half of US employees are searching for a new job. It’s a war for talent, and job seekers have the advantage.
The competition for exceptional employees is not a new one, but it has become one of the biggest challenges that business leaders are facing.
When you’re competing for talent, there are myriad ways to level the playing field. You can pay more money or offer all sorts of perks (from sleep pods to 4 star meals ). And while money and benefits are important, the most powerful tool you can use to attract and retain people with the right will and skill is company culture.
People want to work in organizations where they’re going to be a good fit. Where they’ll contribute, enjoy the people they work with, and most importantly feel valued. People are hungry to find organizations that value the same things that they value.
I’ve witnessed firsthand the magic that happens between an applicant and a potential employer when there’s a tight alignment of values. On the contrary, corporate cultures that don’t value people – those that are riddled with dysfunction and murky leadership – make it devilishly difficult to both attract and hang on to talent.
In fact, the investment in creating a positive workplace culture is much lower than the cost of losing experienced and highly qualified folks.
Recently, I was talking to somebody about open plan offices. These floorplans that are used as a way of controlling costs have been shown to have a long-term negative impact on both morale and productivity. And yet we keep filling our workplaces with tiny cubes with no privacy as a way of being more efficient. It doesn’t make any sense economically to keep shoving more people in tiny boxes that they hate. Nevertheless, we keep doing it.
Culture works the same way.
When a business has a very unhealthy culture with unhealthy managers who create toxic workplaces, there is an incredibly high cost –much more so than the square footage price. Not only do these unhealthy cultures drive away the best talent, they don’t attract and retain the talent that we compete on.
To build and maintain a healthy, highly-engaged workplace, employers must engage their current talent to boost collaboration and overall work satisfaction.
Your current employees are the best recruiters you have. If they’re unhappy, if they’re disengaged, if they feel undervalued or don’t have the tools they need, then they’re going to share all that information with potential hires. And they’re certainly not going to introduce you to the best and brightest people they know.
The truth is that most organizations don’t manage or even think much about their culture, although we all have one. Imagine the difference it would make getting really clear on what that culture should look like, then shaping that culture through values and creating a company where people thrive.
People want to feel valued.
They want a fulfilling career path. Pay is not a long-term motivator. There is little worse for your bottom line than a super disengaged and unhappy employee who sticks around for a paycheck.
Engaged employees are more collaborative and productive. They help people see the connection between their everyday work and the larger purpose of the organization. In return, the least we can do is provide a rewarding experience and positive culture.
Think about where the world is going. Things are moving faster. The future is more uncertain and more complex. Businesses are coming under ever-increasing pressure with demographic shifts, new commercial initiatives, and growing competition. This complex and fast changing environment is straining the skills and abilities of business leaders to meet such demands. And leadership development has not kept up.
Organizations are a lot like people; they are always a work in progress. Like people, they are impacted by change. And like people, they must adapt to that change to be survive and thrive. As one of my clients loves to say, you don’t have to be bad to be better. There is always work to be done around improvement in our organizations and in our own personal leadership.
So how can organizations benefit from Values Based Leadership (VBL)?
Often in organizations there’s a misalignment between their mission (why they exist), their vision (what they’re trying to accomplish), and their strategy (how they will achieve their mission and vision). Sometimes organizations even lack those critical pieces.
But even when organizations are incredibly clear on achieving their mission and vision, they’re often unclear on what the culture should be. As a result, they have a challenging time managing the company culture in a way that makes sense to their employees. This creates a misalignment between what’s going on from both a people and strategy standpoint.
It takes significant leadership horsepower to effectively build and sustain the culture, execute on strategy, and ultimately achieve the mission and vision. Leaders must always be developing themselves and helping their people to develop as leaders as well. Investing in people’s ability to lead in a rapidly changing world is only getting more challenging.
Finally, many organizations have misalignment between their processes and their desired culture. For example, how a company hires and fires, how they pay people, how they incent people, how they set expectations, how they communicate – even the physical office spaces – all of these things must align with the culture a company is trying to create, the strategic vision of the company, and the behaviors modeled by leadership. When these key elements are missing, eventually it begins to chip away at the bottom line.
Why is alignment so important?
At InnerWill, our VBL work is often centered on creating organizational alignment. We exist to help companies–across all sectors–build the culture they want, achieve their strategic vision, and live into their mission by helping them develop the leadership horsepower they need.
We’re in the people business – which means that ultimately, we’re in the alignment business. When organizations are more aligned, they simply function better. People are more engaged, they perform better, and they create better results. When the organizations they are working for just make sense, as opposed to misaligned gears that grind all the time, people can actually see the mission in action and understand how to live into it.
It’s critical to remember that creating alignment takes time and commitment. Culture work is heavy, long-term lifting. You can’t create a culture overnight, nor can you fix one. But when you have clarity around what you’re trying to create, when you’re specific around your values, and when you lead in ways that deliver on that, then the culture starts to align.
An investment in effective VBL development means your people will become re-energized and begin to build the necessary competencies to successfully lead the organization into the future.
Is my organization ready for VBL?
Leadership development has been around for centuries. From the founding of the YMCA as a response to unhealthy social conditions arising from the unintended consequences of the Industrial Revolution, to Milton Hershey’s transformative impact on building the town of Hershey, PA., to the ground breaking values work that Jim Kouzes and Barry Posner led in the 1980s. This work continues today; company culture is now imbedded into how we define a successful business. Peter Drucker may have put it best, culture eats strategy for breakfast.
InnerWill’s work is an outgrowth of all of this. And there’s a lot of work to be done. Organizations that are serious about their strategy and the outcomes they’re trying to achieve must also address the culture issue. If they don’t, the results can be devastating.
Go back to the ethical failings of the early 2000s – how much time, energy, and money was destroyed when Enron imploded? Fast forward to today, from rigging emissions tests, to thousands of fraudulent bank accounts, to government scandals, there is no shortage of leadership failures in organizations. A company making news for its innovative products and sky-rocketing revenues can quickly become a headline about an ethical scandal and a resigning CEO. It’s a dotted line back to leadership at the top and the company culture.
What’s the true cost of having a bad leader who is ineffective at performance management, who is unable to give or receive feedback, who can’t navigate conflict, and who doesn’t create a sense of trust and shared focus for his team?
Think about the cost of losing a customer. Maybe she had a terrible experience with a customer service rep. Now imagine that all 50 customer service reps work for the same manager, and that manager’s ability to lead has everything to do with his team’s performance and the customer experience.
The true cost is more complicated than simple dollars and cents, because leadership is a force multiplier. If a team leader is malfunctioning and not performing where he or she needs to be than a company is either losing money or opportunity. The impact of organizational leadership is far reaching.
When you think about an investment in VBL, ask yourself:
• What’s the leadership horsepower in your organization? Are your young leaders ready to step up? Would you turn your business over to them tomorrow? Does your successor have the skills necessary to lead not just today but tomorrow?
• Think about your key talent. If they left tomorrow, would you rehire them?
• And finally, can you afford not to make the investment?
Did you answer no to any of these questions? If so, don’t worry. You still have time to lay the foundation, continue to improve, or even rebuild your leadership strategy by investing in VBL today. In fact, the development of leaders throughout an organization may be the biggest contributor to its long-term success. Because in this volatile and fast-moving world, VBL is a stalwart constant.