National Development Manager, Family Dynamics

In this update:

  • There are some unique parallels between the principles of road construction and the leadership development process for a family business
  • It pays to be intentional about the preparation of next- generation leaders and take the long-term view
  • There are four ways you can prepare the ground with ample road base to help give the next generation a foundation for success

A number of years ago, two men were driving on a cold winter day in Western Canada. One of the men asked the other man who owned a road construction company, "How is it that the roads here in this part of the country hold up so well with the frigid cold of winter and the extreme heat of summer?" The man expected a scientific solution for a special asphalt or concrete mixture. "The secret lies in the depth of the road material,"1 answered the construction company owner.

As the cold of winter and the heat of summer come and go, it is the depth of the road base that lets the material expand and contract without cracking or damaging the driving surface. As you consider this story and its relevance, you might discover several unique parallels between the principles of road construction and the leadership development process of a next-generation family business leader. Obviously, not all roads remain intact as in the story above. Many become riddled with cracks and potholes following a cold, wet winter or a summer of extreme heat. Like roads that are properly constructed, the "materials" needed to properly prepare a successor are varied, and need to be applied consistently and with great depth. How then do we explain the variances that occur in the process of building roads — and building leaders?

Minimum standard or optimal standard?

When paving a road, the depth of the road base is often determined by a minimum standard rather than an optimal standard. Within the construction industry, many leadership development plans take place under the guise of minimum standards, but the construction industry is not alone in this challenge.

In a leadership succession study completed with families that own banks in the Midwest, most said they believed the next generation of leaders would come from an internal source. However, less than one-fourth of the organizations surveyed had formalized leadership development programs that would produce such leaders. Thus, most survey respondents had chosen a minimum-standard approach. The hope or expectation that leaders will simply materialize when needed is not an optimal standard that one should rely on for consistent, long-term success. Not being intentional about the preparation of next-generation leaders is near-sighted and lends itself to lasting negative consequences.

Many industries likely fall into this minimum-standard category with regards to developing the next-generation of business leaders. What should be the standard? Do you view your business succession plan as a minimum standard or optimal standard? Which standard does your plan of action need?

Short-term constraints or long-term functionality?

In road construction, the depth of the road base is often determined by short-term cost constraints rather than the quality and long-term functionality of the road project. In business, too often we find short-term cost constraints are given greater importance than the long-term value of having capable, qualified leaders for the next generation of the company. Many family businesses take their time to prepare the ground, use plenty of road base, and then "pave the road" for the next generation by considering the long-term view.

Parking lot or runway approach?

The necessary depth of the materials used in road construction is determined by expected traffic loads, street classifications, and existing soil types. When you think about leadership development and succession planning, are you building minimum-standard parking lots or are you building sturdy runways for high-powered machines? The value of your business and the prospects for its continuity determine the type of foundation you put in  place. With most family businesses that seek to foster healthy, long-term growth, it is extremely important to prepare the ground with ample road base to help give the next generation a foundation for success.

Here are four examples of how your organization might accomplish this:

  1. Encourage the next generation to find an area of the business which they feel passionately about learning and working.
  2. Allow the next generation to have experiences and opportunities to succeed or fail, both inside and outside of the business.
  3. Provide the next generation a documented career path and with mentors who can help them develop the unique skills they will need to succeed in your industry.
  4. Give next-generation leaders ample time to grow and develop their own identity in the company before elevating them to a top position in the organization.

Each of these ideas figuratively serves as a unique element in the "road base" for the next generation. Remember, not all projects require the same specifications, but if you value your company and expect high performance and growth, you should not prepare the next generation as you would a temporary parking lot. While the investment of time, energy, and focus may seem expensive in the short-term, if done properly the strength created may pay dividends over the long-term.

"The secret lies in the depth of the road materials." Prepare the soil through education and discovery of interests and talents, apply plenty of road base-type experiences, and then observe and evaluate a well- prepared next generation as they seek to find success on the road to business continuity and growth.

1 Source: Monson, Thomas S. (2006 November). How Firm a Foundation. Ensign, pp. 62, 67-68.