Director of Spectrum Dyes & Chemical Pvt Ltd and angel investor Akshat Chaudhary, discusses the importance of mentoring the next generation to become effective and evolved family business custodians.
Author and inspirational speaker Simon Sinek said: “Leadership is not about being in charge. Leadership is about taking care of those in your charge.”
Being in a family business for more than a decade, I have learned quite a few things about leadership roles. One thing that always stayed with me is that change is driven from within the organisation - it is an inward, outward journey.
In any family-owned business, the former generation generally wants the latter one to do even better. What that means is to be in a position where better strategies are developed, business avenues are streamlined, and thriving leadership is sustained.
For all this to happen, a leader - or a group of leaders - needs to be appointed. While this is necessary, there are some things that leaders should take into consideration while choosing the stewards of tomorrow.
- Don't just look for a person with similar attributes to the person who is running the show right now. While that might serve the purpose, it will not encompass the skills that are needed ten or 20 years from now.
- More than knowledge of business, the next generation truly requires a true sense of responsibility and leadership.
Upright stewardship curates the organisation's mission
Let's look at the mission of two titans of the industry:
- NIKE: To bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete.
- TESLA: To accelerate the world's transition to sustainable energy.
With freely available information, consumers and customers will not buy from companies that do not stand for the right values and purpose. Creating a strong culture of stewardship within an organisation is, therefore, a win-win strategy because it is good for individual employees, the company and the world at large.
So how should families approach this?
The best way to approach a transition or plan a succession is to not think about what is needed today but about what will be needed in ten years. It isn't easy to gauge for obvious reasons, you want the next crop of leaders to have even more talents and skills than the current leadership team.
Moving beyond conventional leadership
Competition is cut-throat, economic times are difficult, and organisations need leaders who can deliver results for shareholders and ensure a sustainable future for the business.
In such a scenario, a new post-heroic approach to leadership is needed, where executives empower, inspire and strengthen the leadership of others. This will enable the executives of the future to build strong, sustainable organisations that are held in trust for future generations – in sharp contrast to a conventional command and control leadership style focused on reducing costs and creating profit.
These changing times call for a radical departure from the leadership styles of the past.
If you are someone who stays in touch with the news, you would know what is common between British Petroleum (BP), Volkswagen (VW), Wells Fargo and Boeing.
If you think they are all companies that have endured over time, you would be right.
VW, the youngest of them, started in the 1930s. But as you have surely also guessed by now, these names are listed together here because of their respective recent scandals – the BP Deepwater Horizon oil spill, the VW emissions scandal, the Wells Fargo accounting fraud and the Boeing 737 Max design disaster.
The point I'm trying to make is that all of this, if you trace its roots, has to do with leadership skills.
I’m not implying that the respective organisations possess bad leaders. But the values they are driven by are misplaced. Early on, I understood that core values are not created but discovered.
What is needed for organisations and society at large are leaders who rededicate themselves to care and the principles of stewardship - a form of leadership that focuses on others, the community, and society at large.
How is stewardship any different?
This is how Steward Leadership is different: a steward leader cares for team members, the organisation and society as a whole. Their actions are done in the interest of the growth of not just the organisation's mission, vision and values. Leading through example, steward leaders attract talent who hold the same values.
So how does one become a great steward leader?
There are three steps - two foundational and one ongoing:
1. The four core compasses of stewardship's purpose are - Long-term view, ownership mentality, creative resilience and interdependence.
2. Based on these values, develop moral clarity about your stewardship purpose – the better future you want to create for yourself and others.
3. Together, stewardship values and purpose form one's core compass. Deriving limitless energy and courage from your strong belief in your core compass, relentlessly pursue your purpose while living your values at all times.
These steps enable steward leaders to create happiness, resilience, and fulfilment for themselves, as well as building enduring success for their organisations.
How good stewards train new stewards of tomorrow
If you have seen Star Wars, you must remember the Jedi Council - how they chose apprentices, teaching them the ways of the force and keeping civilization safe from impending evil.
Something vaguely similar has to happen in leadership roles for companies to sustain and create value at large.
This begins with leading by example and investing in activities that incubate the ideas of being a steward in the next generation. But role modelling alone won't work - leaders must also design internal systems and processes that recognise and reward behaviours in line with the compass and penalise or eliminate the ones that go against it.
The three most important processes to get this right are recruiting, performance management and rewards.
Let the next generation find their own path and way of contributing
Usually, when the next generation enters the family business, they want to make quick changes in the company's approach. They are often under pressure to prove themselves as the new authority, this bias in mind can lead to catastrophe.
For the next generation to step up as stewards, they must be driven intrinsically to serve the world at large while serving the organisation within. Their path and way of contribution should not be burdened on them; a steward should choose their own path and way of contribution.
The path of the steward leader is both challenging and rewarding
It is, at the same time, both deeply personal and outwardly expressive. Those who embrace the way of the steward leader not only find peace stemming from having a clear direction that comes from counterbalancing transcendence and investment, but they also leave an indelible mark on the lives of their employees, friends, families and communities.