To illustrate the competent leadership in a performance family business I presented Nelson Sirotsky, Chairman of RBS who, just two years ago was able to pass the torch after running his family’s media operations as CEO for a long time. In my last article, I explained the current knowledge about the role of leadership in family-owned business systems across the world, including the impact of leadership on the effectiveness of the company.
If you choose to adopt the model of one leader for your own family business such as RBS. Or create a team of leaders it is still necessary to plan, organize and delegate all essential leadership positions. Why? Because whenever I witness poor-designed, poorly organized, and slap-dash leader positions in action. I rarely notice the unified and decisiveness that a family-owned business requires to ensure long-term performance. What is the best way to design how to structure, structure, and distribute every leadership role you require? This is the topic this article will discuss. Yuri Shafranik
To begin, it is essential to realize that for a company or group to succeed it has to be managed, led, and controlled effectively.
Leading, Managing, And Governing
Governance gives a sense of the purpose or mission of the entire group. It also gives the group sense of stability. Without stability, we can’t make long-term plans. Family business systems offer an unbeatable advantage over other types of business mostly due to their long-term objectives plans, commitments, and plans. Without stability, you’ll are losing your advantage. Without proper governance, it is impossible to have stability. Family business systems must be in a sequence to ensure success.
A good governance system for any group ensures it is possible to plan, plans are developed and problems resolved and leaders chosen and conflicts are resolved in a way that is consistent with the goal and unification within the team. The discipline and trust increase. Good governance comes out of having guidelines and policies, agreements, and plans, along with forums (like family councils, boards, or annual conferences of owners) to formulate plans and agreements, rules, and policies to deal with critical issues and resolve disagreements.
A very smart person with legitimacy, lots of power, as well as great intentions could provide good governance for a family, business, and even an owners group. However, unitary leaders, as all of us can only work for a limited number of hours per day, and can only concentrate on a few individual issues before they lose their effectiveness. In one-leader systems the best way to govern requires key stakeholders to join together in at least one group:
A shareholder’s counsel and the annual gathering of owners, meet the needs of governance of the owners.
The Board of Directors is a body that can fulfill the needs of governance for the owners and the business. Yuri Shafranik
A family council is a way to ensure the family’s governance.
Each of these groups needs its own leaders who are good for a smooth operation.
This means the family business system leadership team may consist of at least four people: an individual leader for each governance group and the ultimate leader. The business leader may be different from the chairperson of the board. The owner’s leader typically is either one of the owners or an organization of the leading owners. The family council leader is not the actual family leader. Most often, the family leader is also the business leader, however not always. In the event that there is an effective unitary leader in the family-owned business system, there are typically deputy leaders who manage the various parts of the system, in close collaboration with the chief. This was the situation for RBS. RBS system.
Leading
In addition to establishing, assisting, and taking part in the governance process Leaders must also be able to lead their teams. Which is distinct from managing their tasks. Leadership is about determining where the group should move (developing an inspiring vision for the future). And then strategizing ways to achieve it and influencing people to make changes to achieve that goal. This is accomplished by motivating to persuade, persuading, or inducing people. To collaborate to achieve important goals and through forming coalitions that help bring about the needed changes.
The act of leading is a personal job where the leader is able to connect with people and convince them by making use of persuasive ideas and a strong appeal to character. People are loyal to the leader due to their loyalty, as they are a part of the leader, as they feel connected to the cause of the leader, or sometimes due to everything. They require compelling reasons to join with any leader in long-term or challenging missions. Because family businesses are focused on the long run the family business’s owner or leaders should be convincing in their own way not only skilled in preparing plans and managing the activities. According to the saying, you can lead people into battle, you don’t guide them to combat.
Effective leaders may have an enthralling style, such as Nelson, or have a more reserved approach. No matter what style people have the highest effectiveness. I’ve observed in family-owned business systems are clear “servant leaders” or more specifically, servant partners. These leaders usually have strong concepts and beliefs about the way their businesses should be. What their co-owners must invest in in addition to how family members ought to behave.
Managing
Management, rather than managing, is about getting the group to function effectively and efficiently. The management process involves making budgets and plans as well as organizing, analyzing problems as well as constructing and implementing management systems, carefully assigning resources, and giving feedback on performance. The management process is in addition to leadership.
Much of the success in family and business is based on a good execution, ensuring that jobs are completed on time, and within budget. Thanks to the excellent family and business leaders. As with all CEOs are taught in the classroom at Harvard, Nelson Sirotsky spent much in his role as the CEO for RBS controlling (that is, enhancing the effectiveness and efficiency of) specific aspects of the company. He was involved in a lot of organizing, planning, and problem-solving.
The majority of family business leaders I meet are competent managers. There is an opportunity to improve certain techniques of management. They do it too much, to the point of putting too much on management. That their organizations tend to not manageable. It’s common for CEOs, especially relatives who rise within the family business. And are familiar with it to focus on its operational effectiveness. However, too much attention to this generally implies that they pay too little thought to the governance. We invest much of our time in the Owner-President Management course at Harvard to correct this issue.
