In the past 20 years of practice, I have witnessed a sea-change in attitudes toward women assuming leadership of their family business.
In the 30 years before that (I have been a consulting psychologist for 52 years), while I would occasionally encounter women who were successors, nowadays it has become commonplace to see daughters, nieces and female non-family members who are not only interested in assuming the reins of the business, but also just as qualified or even more qualified than their male counterparts.
Here are just a few examples I have experienced:
- Three brothers and a sister (the sister being the youngest) inherited an automotive dealership with multiple locations.
- At one family office, the heirs apparent consisted of sisters and brothers, and one sister was designated by the patriarch as the future leader.
- Two brothers and a sister assumed the ownership of a real estate development company that includes drywall, kitchen cabinet and commercial property divisions.
- One company with interests in housing, commercial development, property management and civil engineering had 12 possible successors, equally divided among men and women.
- Several businesses had only female succession candidates, among them a professional services company, a shopping centre development firm and a real estate development firm.
In some of these cases, the daughters were as young as 30. In some of these families, the daughters or cousins get along; in others, they do not. In some situations, the daughters have children, or are planning to have families; in others, not. In some examples, daughters have relevant skills and/or training; in others, not. In some families, the patriarchs/matriarchs are controlling; others are more flexible and open-minded. In some circumstances, the female successors have stay-at-home husbands, while in others they are dual-career couples.
In other words, the dynamics vary, but frankly they are not much different than for male successors. Yet, women face some unique challenges.
Perhaps the most common is that they are still expected to fulfill traditional family roles while managing business responsibilities. These women must manage their time while balancing family obligations, personal time and business demands.
While more women today are leading multinational businesses and sitting on boards of major corporations, in family business they still face skepticism about their leadership abilities, especially in traditionally male-dominated industries. It is not uncommon for incumbent leaders to expect women to take on less strategic or lower-profile roles such as leading HR, legal services or marketing.
Some founders prefer men to lead, even if the woman is more capable or experienced. In these circumstances, women are often under the microscope and have to work harder to establish credibility and prove their qualifications.
Long-standing family disagreements also can play a crucial role. Maintaining family harmony while enforcing business decisions can be complicated, and women are often expected not to “stoke the flames.” Patriarchs/matriarchs might assume that a daughter or niece is too “soft,” thereby putting the business at risk.
Older generations also may resist modern business practices or leadership styles that women bring to the table. These women are often challenged to bridge generational divides while driving innovation and change.
Forging a solution
As an expert in transitioning family businesses to the next generation, how do I go about helping daughters, nieces and their parents bring about a successful transition?
First and foremost, we must determine whether the daughter or niece is fully committed to assuming leadership and that she genuinely and fervently wants to do it—and isn’t doing it to avoid disappointing the parents.
Another essential ingredient to success is ensuring that the daughter is capable and comfortable expressing her opinions, needs and decisions assertively, particularly to figures of authority, be they parents, lenders, suppliers, business partners and other family members. Reconciling being a respectful son or daughter with being a successful leader is a challenge, yet women tend to be more tentative when disagreeing with a father or uncle, and, sometimes, stereotypically, they can become aggressive if the incumbent is a mother.
Coaching the incumbent is equally important. Many parents believe themselves to be exceptional teachers, yet they tend to emphasize “telling” or “instructing” instead of allowing the succession candidate to participate, observe, ask questions, consider scenarios and understand the options that went through the incumbent’s mind before landing on a decision. I call this process a “mind-meld,” and over time an effective mind-meld manifests itself as the successor asking a question or making a decision even before the incumbent does (“you stole the words right out of my mouth”).
Another key success factor is overcoming gender-based biases. Among the big ones:
- “She must be a poor mother.”
- “How much time/energy does she have to be a good wife?”
- “She must make more money than her husband.”
- “What does she know about negotiating with a banker?”
- “She hasn’t got the chutzpah to let that executive go.”
The female successor needs to understand that these biases say zero about her competency, and while she may take a bit more time and energy to establish herself, these attitudes do not define her. She must absolutely motor on to ensure the success of the business and family. Trying to “prove herself,” while admirable, is often a waste of time; doing what needs to be done will serve her best in the long run.
The female successor might also need to come to terms with others’ attempts to impose feelings of guilt by implying she is bad, selfish or wrong to want to pursue a career and a happy home life.
If the candidate is married or in a partnered relationship, having a supportive mate is essential to her success. She must engage in serious, open and meaningful two-way conversations with her partner regarding what it means for her to take on the business leadership role. Without such dialogue, either the business or marriage will suffer.
A founder’s ideal approach to the candidate
Each of these suggestions presupposes that the daughter/niece/cousin has the requisite skills, knowledge and attributes to lead the business. But a potential candidate, whether a son or daughter, does not need to have all three, at least not at the outset. I’ve seen numerous instances where a daughter who is smart, motivated and interpersonally effective can, over time—and with the right mentoring, work experiences and coaching—readily become a highly effective business leader. Not unlike other personal development experiences, transitioning into a business leadership role is a marathon and not a sprint, and the motivation must be there.
The incumbent needs to recognize the importance of assuming the role of teacher, letting the “student” gradually assume more responsibility. The incumbent also should not expect perfection, should invest in building a team around the soon-to-be leader, should allow themselves to be challenged with new ideas and approaches and, most of all, be supportive. The next gen doesn’t need to learn via “the school of hard knocks” to be effective and successful.
I recognize that the magic sauce of successful business transition requires more ingredients than I have covered here. And, while I’m not an expert in wealth transfer, wealth preservation, insurance matters, trusts and cross-border issues, I can guarantee that none of these structures are as important as dealing with the family dynamics described here.
I have seen too many businesses go south or be sold unnecessarily, too many families be disrupted or frankly destroyed, by failing to deal with these first principles. At the same time, a successful transition can be a beautiful thing when there is recognition of the importance of managing the human dimension of transition and change.
In this case, we are talking about the role of daughters as future leaders, which deserves special attention given the increasingly expansive role of women in society, in the business and in the home.
Dr. Gerald (Gerry) Pulvermacher, Ph.D., C.Psych., is an organization psychologist who has been in practice since September of 1972. He is a dual citizen of the U.S. and Canada, is married and has two daughters and five grandchildren. His clients at Gerald Pulvermacher & Associates (GPA) are located throughout North America and can be found in many industries. Gerry does not believe in retirement, so he hasn’t transitioned his own business; he has, however, transitioned himself on several occasions. Apart from transitioning from clinical to organization psychology in the late 1970s, he has been the managing partner of his consulting and clinical practices (PSS Consulting and Pulvermacher, Stevens & Shack), he owns or co-owned a summer day camp for children, a restaurant and real estate, been a senior partner and Global Service Line director for Deloitte Consulting, president of a Canadian change management firm and in the 1970s and early 80s developed the first group fear-of-flying programs. Gerry has also taught as part of the Queen’s University Executive MBA program and lectured at the University of Ottawa Family Business and Entrepreneurship Program. He plans to continue consulting indefinitely, helping family businesses, organizations, leaders within businesses and individuals grow and develop to be successful. Gerry does not see limits to growth and development. Contact him at gerald@gpulvermacherassociates.com.
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