Nurturing the Next Generation in a Family Business

Identify and Develop a Successful Entrepreneur

What makes a leader entrepreneurial? Many family business leaders, especially founders of family business, are eager to find an equally entrepreneurial leader in their family to become their successor. The paradox is that being “handed” an established business may not inherently lend itself to sparking entrepreneurial behavior.

A profound connection to the family business can, however, spur entrepreneurial behavior if managed well. So, what qualities should family businesses cultivate in the next generation of leaders?

Consider these eight characteristics of successful entrepreneurial behavior as you identify and develop leaders. Notice that any characteristic taken to the extreme can create problems.

Does someone in your family have the spark of an entrepreneur? Seeing their potential and creating an appropriate environment for their balanced development will help you nurture them.

Entrepreneurial leaders are:

Innovators

The status quo isn’t good enough. Entrepreneurs always strive for the competitive advantage.

To the extreme: Too much innovation leads to constant tinkering and a lack of follow-through. Leaders lacking this quality are simply caretakers of the business.

Visionaries

Having a clear vision and the ability to inspire others to share it is a hallmark of the successful entrepreneur.

To the extreme: Vision must be balanced with pragmatism and accomplishment or leaders can be stuck in the dreamer stage. Without vision, leaders become like a deer in the headlights when the unexpected happens.

Risk-takers

Entrepreneurs take calculated risks that may seem unreasonable to outsiders. They perceive risks as lower because they are betting on themselves and the teams they have built – i.e., they are “the house.”

To the extreme: Too high a risk tolerance creates recklessness, while too little willingness to take risks can produce second-guessers who can stall any process.

Questioning authority

Entrepreneurs are distinguished by qualities like asking forgiveness rather than permission and not listening to the experts who say “it can’t be done.”

To the extreme: Questioning authority too much can turn leaders into pirates who sink the boat. Too little authority can cause them to miss the boat.

Inquisitive

Entrepreneurial leaders understand that knowledge is power and are always striving to learn more to stay ahead of the competition.

To the extreme: Being too inquisitive can cause a leader to become stuck in the role of a permanent researcher who lives in the theoretical state. Lack of curiosity is often accompanied by rigidity, or know-it-all postures.

Passionate

Successful entrepreneurs are immersed in their product or service and develop strong connections to their industry.

To the extreme: Too much passion can create fanatics who are out of touch with reality. Too little of it can cause a lack of enthusiasm or emotional investment.

Vigilant

The true entrepreneur gets things done and makes sure they are done right. More than attention to detail and a strong work ethic, they take responsibility.

To the extreme: Being too vigilant can produce a micro-manager who does not create an efficient workplace. A lack of vigilance creates a disengaged or absentee owner.

Value creators

Entrepreneurs are driven to make a difference – to the industry, the community, their family or the state-of-the-art. It’s about more than money, and this is what distinguishes the entrepreneur from the speculator or opportunist.

To the extreme: A leader who is too invested can become a gambler who risks too much in the name of growth. One who is not invested in creating value can be a simply a hobbyist or dabbler in the business.

These eight characteristics, when properly balanced, are hallmarks of entrepreneurial leadership. They are qualities that boards and senior stakeholders should consider as they nurture future leaders. Careful assessment and development of these characteristics in the earlier stages of the next generation’s career can help to foster success.

Continuity can help you plan and prepare for succession.

Download our ‘Entrepreneurial Matrix: A Coaching Model for the Next Generation Leaders’.

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