Leadership as the Next Generation. How to Make Yourself be Heard.
Photo by Jehyun Sung
The next generation is in a leadership position often without realising it. Usually, this is not a formal position of any sort. And many NextGens have a hard time leading from the position they have. Making themselves be heard by the people around them. This is the case for any organisation, but particularly important in business families. The next generation often has much more to bring to the table than the NowGen sees. And often more than the NextGen themselves realises. How can the next generation become leaders in their families? What can the family gain from this? What can the NextGen gain from it? Do you even want to lead? If you do, where and how would you like to lead?
Next Generation Overview
Before we talk about leadership it is essential to define different generations. And to look at the typical situation the next generation finds itself in. As well as the situation the NowGen often faces and how this plays out in terms of leadership dilemmas.
How are the generations defined?
I prefer to look at the definition of the generations in terms of control. So, the next generation is the generation that is next in line to take control of the family assets. This can be a business, a family office, or other assets. This can be slightly different in a trust structure, as often the family has no formal control over the trust. Especially, a few generations after the establishment of a trust. So, in a trust structure, it would be the next generation of beneficiaries. In this sense, the NowGen is the generation that is in charge right now. The PastGen (past generation) is the generation which has relinquished control. Many families or branches do not have a PastGen as the NowGen keeps control until they die. The RisingGen (rising generation) is typically the generation that is rising to take over after the NextGen. In most cases, this will be the NextGen's children and the NowGen's grandchildren. Due to our lifespans, it has become increasingly common for families to have three to four generations still alive. This may complicate matters.
The situation of the next generation
The next generation can find themselves in all kinds of different situations within the family. From being given power very early, to being given power rather late. From acquiring power suddenly to acquiring power gradually. From wanting to take over, to not wanting to take over. From having a close relationship with their parents to not having a relationship with them. Their grandparents had lived and educated them to their grandparents having died early. Then the family’s asset structures can be vastly different. The size of the family also. Some 6th Generation business families are much larger than some 30th Generation business families. Why is this so? It again depends on how the family has approached succession and inheritance over generations. As we can see, the composition of a NextGen’s situation can differ greatly.
In order to look at NextGens from a leadership perspective, we focus on the commonalities. First of all, as a NextGen you are not on top of the food chain, at least not in the family. There are instances where the NextGen leads a business for the family without being an owner. Usually, as a NextGen, you find yourself in the middle somewhere. You will have other NextGens beside you. You will have the RisingGen below you. You will have the NowGen and the PastGen above you. These are in terms of age and with age often comes authority. For the sake of this article, we look at families where there is something to inherit and take control of. So that is another commonality. Most NextGens grow up in the shadow of their ancestors. The wealth has come from somewhere and usually, this has been done through great achievements. NextGens can struggle to find their path. As the title suggests, we will focus on establishing yourself as a leader and making yourself heard. If your family is already listening to you and you have some say as a NextGen, you will still find some value here. But the focus lies on those who are having a hard time. As this is the case for most families, we shall say that the relationship between the NextGen and the NowGen is not optimal. In most business families the parents were not as present in the upbringing of their children, as would have been ideal. This complicates matters emotionally. Many NextGens are stuck in an existential Vacuum (as defined by Viktor Frankl), they are lost and feel no purpose. An abundance of resources and a scarcity of love and affection may create these lost souls. While this might not be you, it might be your siblings or cousins. This is important for you to understand.
The next step is to broadly define a common goal for all NextGens that are striving to make themselves heard: You have beliefs, ideas, wishes, needs and principles that you want to communicate and make sure are satisfied. And you are trying to find your path. You would like to achieve this without breaking the family and should the family be broken you are interested in doing your part to facilitate healing.
The situation of the other generations
To make sure you can approach leadership in your family well, it is paramount that you understand the perspectives of the other generations. Sometimes even of the other members of your generation. Most often you will have a conflict with the generation above you, the NowGen. Try to get to know them well. This is often difficult especially when your relationship is not great. However, it can give you great insights. There are often generational cycles, and the problems you are experiencing were experienced by the generations before you. The NowGen often sacrificed a lot (even if it doesn’t seem that way) to move the family legacy forward. Some do a good job at it and some a bad. Nevertheless, letting go of control is hard for them. In many instances, their identity is linked to the family legacy. In their mind, they are the family legacy, and the family legacy is them. So, they are very concerned about what happens if they relinquish control. You will need to find a new task for them to smoothen transitions and work on this early. Believe me, firing someone from the NowGen after you take ownership is not pretty.
Remember that the RisingGen might just be going through similar things to you. If there is no RisingGen yet, think about what you can do better in their upbringing, once they are there. As a NextGen you have a responsibility to the RisingGen. We often believe children won’t notice things. Think back to your childhood and ask yourself how much you actually noticed. Yes, more than you would think. And just as much as you wish to find your own path, so does the RisingGen.
A great illustration of different perspectives is the cone in a cube Dilemma. Depending on what side of the cube you peek into it, you will see different shapes. One person will see a triangle while another will see a circle. Without communication and without indulging other perspectives we will not be able to see the whole problem. This is something you need to keep in mind as a NextGen. You have your own perspective on things and so will others.
Depending on how the succession went, if the PastGen is still alive, they might lack purpose in their remaining life. Sometimes they can be passionate about educating the NextGen and the RisingGen. It is paramount to find a new task for the PastGen. The grey eminence can do a lot of good for the family and the business activities. But sadly, they can do just as much damage. Past employees, business partners etc. often still look up to the PastGen. If the PastGen is not on board they will notice and if the PastGens does not support the NowGen and NextGen in their endeavours, others will wonder. They have and deserve a certain amount of respect, but not infinitely. Getting the balance right is important.
The difficulty in families is, that they are highly complex. Depending on what each family member has experienced, the number of family members and the business activities, to where the family is located. There is no fit-all toolbox. As a NextGen you need to go on a journey to grasp your family’s intricacies if you wish to hold a leadership position with meaning.
Leadership essentials
What are the essentials of leadership? A lot has been written about leadership and we have stories of exceptional leadership throughout human history. Leadership can be distilled down to some best practices. However, there is no magic solution. Each person will be more comfortable with a different style. Each person has their strengths and weaknesses to take into account when approaching leadership. We have set a common understanding of the generations and their situations, so let’s dive into leadership in general terms.
Defining leadership is difficult. There are many different definitions out there and experts in the field of leadership research are not agreed on the topic. However, zooming out we can say that leaders manage the Why of a group and managers manage the What of a group. While the team decides the How. Leaders do not necessarily need authority to have followers, although in general, it is very helpful to have authority. Leaders can lead through influence. While authority is usually given to us, we can work on our level of influence ourselves. As there are many different definitions of leadership, there are also theories about it and opinions on leadership styles. This is a debate on its own. This is why I will stick with two theories that have helped me greatly. I wish I had come across them earlier in my life and it would have saved me a lot of hardship. Thus, I hope to save you that trouble.
Meta Leadership
Meta Leadership was developed by the National Preparedness Leadership Initiative (I recommend reading the book “You are it” by the directors). It is a framework for leading. Originally it was developed to be used in complex crisis situations. However, it can be applied in any organisation to facilitate leadership. This also applies to a business family. Below you can see a diagram describing the framework.
At the centre of the framework is the leader. It is important to know yourself in order to be an effective leader. We will go more into this later. As a leader, especially a NextGen, you will usually find yourself in the middle of an organization. And you will be in the midst of a situation. Not only do you need to know yourself well, but you also need to understand the situation. We looked into the situation as a NextGen above and will look more into it further down.
What is essential in the framework is that you have four directions in which you apply your leadership skills. Up, Down, Across and Beyond. The most common skill we attribute to a leader is to lead down to your followers. This can be employees, RisingGen, younger siblings or people in your community. The other three are often overlooked. Usually, you will have superiors that you need to lead up to. They will listen to your advice and form decisions based on this. Often, you are the expert on something, and the leader will do well to listen to your advice. The same applies to you, just as you need to lead up it is important to let people below you, lead up to you. Listening is the key here. Leading Across means you will need to lead people of equal position to yourself. Typically, in an organisation, say you lead a department, those would be other department heads. In a family those are other NextGens; it can be people in the management of the family company; it can be the CEO of your family office. It depends on how authority is defined within your family. The last one is to lead Beyond - beyond the borders of your organization and your family. Here we talk about people outside the family, e.g. your family lawyer or tax advisor, project partners or competitors, organizations from your community or NextGens from other families.
Adaptive Leadership
Adaptive Leadership is a style, where you adapt your leadership method according to the situation and the people you are trying to lead. Similar to Meta Leadership, what is useful here, is that it is applicable in complex situations. It is a style that takes account of another person’s position and character, and the situation they and you are in. The strategies and tactics that a leader should apply are highly dependent on the situation they are facing. Certain strategies and tactics work in specific situations and sometimes with specific people. Some leaders are one-trick ponies, where they are great in certain situations, and not in others. In a family the situation is complex and as stewards of wealth, the family is connected to the change that is going on around them. For a family to be able to survive political, economic or social turmoil, they need to adapt. As NextGen this is important for you to learn. As a bonus, you can apply the methodology to your own family and become a force for positive change from within.
Here are some of the main principles of adaptive leadership:
Organizational Justice
As a leader, it is your responsibility to stand up for justice. Make sure everyone is being heard and that people are being treated fairly. This is challenging to adhere to as a NextGen. You are not at the very top of the food chain, however, you can still try to lead from a position of justice. This may sometimes mean standing up to the NowGen. This can be challenging but is important. This could mean that you need to stand up for someone from the RisingGen. Or sometimes even for someone from the NowGen. This you can also enforce by adopting a mindset of ownership for yourself. Own your own mistakes. Lead from a position of responsibility. Often in families, people like to play the blame game. Do not engage in it and see what wonders it might do.
Emotional Intelligence
To be able to lead in challenging environments you will need to be able to manage your emotions. No, this does not mean that you become an emotionless statue. Emotions are good, the magic happens when you learn to understand your own emotions. Once this happens you will be able to understand other people’s emotions better. This essentially means you have become empathetic. Understanding different perspectives. Empathy is not the same as sympathy. Understanding another person’s situation and emotions does not mean, you agree with them. Agreeing would be sympathy. This is one of the most important points when it comes to leading different people. Once you have honed your emotional intelligence, you will be able to work better with different individuals. You will know how to nudge them in the right direction. You will also know when to give up on somebody and focus on where you can have an impact. Some people need more praise than others. People thrive in different environments and on different kinds of acknowledgement.
Development
Adaptive leadership requires continuous learning. Part of this is reflecting upon your own actions. Often when trying to lead in a complex situation with different people, you will have to try different avenues. Without reflection, you will not be able to see that a certain tactic is not working. Not only reflection is key, but continuous learning. The skills needed to succeed in an ever more complex world, are ever so changing. By setting an example of continuous improvement and reflection, you can also influence other family members to do the same. Think about which skills will help you to achieve what you are trying to do. Do you have a hard time having a civilized conversation with the NowGen? Then take a course on managing conversations. Do you need to know more about the industry your family business is in? Then get a book about it. Does your family own art and you do not know about it? Talk to some art experts. These are just some examples you might face, as I have.
Character
Adapting to the situation around you, requires you to stand strong. You should develop a strong set of values that you adhere to. Which values to adhere to is entirely up to you. What code of honour do you want to live by? One of my favourite exercises to find your ethics is: Close your eyes and imagine your funeral. Now imagine different people attending. What do you wish they would be saying about you? Friends, family, colleagues, community members etc. Write these things down and you will have started your book of principles to live by. As a tip from Viktor Frankl: Make sure to try and order your principles in order of importance. This way you are well-equipped for cases where you need to choose one principle over the other. These situations happen more often than we think. Especially when dealing with family.
Know yourself
In order to lead, you need to start by knowing yourself. What are your strengths and what are your weaknesses? What should you tackle yourself and what should you delegate? To build rapport with key employees in your family business and other members of the family, you will need to have some success. The first step there is to avoid the areas you are lacking in. If you end up with a task for the family, that you simply suck in, get help. Being a leader is about knowing your own shortcomings. At the end of the day, it is about the task being done well and the goal getting accomplished. Who did it, does not matter. Try to actively take on challenges in your areas of strength.
Knowing yourself can take years and is an ever-ongoing process. And a painful one at that. Are you introverted or more extroverted? Do you enjoy science or other topics? What are you good at versus what do you enjoy doing? They do not always align. In my opinion, the most important part is to be curious. Curious about yourself. About your past and your future. Do not dwell on the past or constantly live in the future. Understand your past and set goals for the future. Execution is in the here and now. There are all kinds of tests you can do to help you. Talent tests, character tests, proclivity tests etc. I have completed many different personality and talent tests. The one I found the most helpful however was the GC Index. Essentially it measures how much energy you currently have for certain tasks in an organizational setting. Personally, this helped me with knowing what kind of tasks I should take on myself and which to delegate or outright refuse to take on. Leveraging your strengths and thus leading effectively will increase your credibility as a leader. It is essentially about reducing your blind spots and increasing your awareness.
The Blindspot Matrix
Decision-making as a leader
Decision-making is a critical skill if you want to be a leader. This is not necessarily about you making every decision, but also about knowing when to leave a decision to others. This comes back to leading up and down. Sometimes you will be in a decision-making position even as a NextGen. A typical example these days is when it comes to technology and digitalization. The NowGen often does not understand this well enough. And will ask the NextGen or even the RisingGen to help them understand these new developments and essentially decide. Try to practice your decision-making at every opportunity you get. When there are decisions to be made in the family, even when you do not have a say in them, note down what you would do. And then see how others decide and how the decision that was ultimately taken plays out. You can learn a lot this way. This is similar to a mock stock portfolio but with more real-life practicality.
When you need to make a decision there are a few essential questions that you need to ask yourself:
Are we asking the right questions? And trying to solve the right problem? Often when a decision is being made, people are looking at the wrong problem to solve. Or they do not see the bigger problem ahead of them. Try to spend some time initially to find out what the issues really are. What are each person’s beliefs, interests and needs? Only when you have as many puzzle pieces as possible, will you be able to see clearly. Which goes hand in hand with the next set of questions.
What do we know? And what do we not know? What are we aware of? When looking at awareness and knowledge we can have problems that fall into one of four categories. This is illustrated by the diagram below. We map awareness on the left axis and knowledge on the right axis. This gives us known knowns, known unknowns, unknown knowns and unknown unknowns. It is important to know what we are aware of and what we understand. Often, we are aware of a problem but do not understand it (known unknowns). Some things are obvious as we are aware of them and understand them (known knowns). Then we understand a lot but are not aware we have the problem (unknown knowns). And finally, the tricky ones that often trigger a crisis are problems we are unaware of and do not understand (unknown unknowns).
Where is the gap? What do we have that others want? What do others have that we want? How can we give something to get something? The world is based on transactions. Some people like to give more and others like to take more. But on average you get what you give. Understand your own (or the families’) needs and then the needs of the other parties involved. Usually, there is a gap somewhere that can facilitate the right decision. This is often overlooked and just by asking the right questions, without imposing an answer, you can be a leader for the family.
Who is able to make the decision? Are the right people at the table? Especially in a business family, you might be in a situation where you would like to decide on something. However, you are not the person with the authority to do so. Sometimes no one at the table where the issue is being discussed is. It is very important to be aware of this. Not only will you hurt your credibility if you decide something you should not, but you also put the person who can decide in a difficult situation. Sometimes you might get away with it. Sometimes you might be put in your place by your CEO, by the NowGen or by whoever has the decision-making capabilities in the given situation.
Leadership mistakes
There are a bunch of mistakes you can make as a leader. I have made many and so has anyone who is in a leadership position. Before we head into the mistakes, remember you can learn and adapt. Making mistakes is fine. You live and learn. It is all about learning from a mistake. If you want to learn about general leadership mistakes, there is a ton of articles online. Just google. For the purpose of this article, we will focus on the family setting.
What are common mistakes you could be making as a NextGen?
Secrecy is a recipe for disaster. I have applied it and still sometimes do. I nearly always regret it. In some situations, it may be important to keep something secret. However, in most, it is a bad idea. Be transparent with what you are doing and what you decide. Members of the family will otherwise start painting their own pictures. And believe me, they will look very different to the truth. And they will not be helpful to you. Communication is key as a leader.
Thinking you are in full control, while you are not. This has happened to me in a few situations for the family. You are given a task as a NextGen. You believe that you are in charge of this particular matter. However, remember that there are people above you in the food chain. The family business or family office CEO, your parents, your grandparents, maybe your uncle or aunt, or your siblings. Be sure that when you take on a task, you are aware of where you stand. Misinterpreting the extent of your leadership position can cause massive problems.
Lacking humility is the next big one. This is especially easy to fall into when you assume your first leadership position. Being a leader does not mean you are all-knowing. Good leaders know what they know and what they do not. And you should know when to listen to someone and when not to.
Not setting your boundaries. This is a general topic for families. If you do not set your boundaries properly, you will end up being burnt out. You are a human and not a doormat. So do not behave like one. People pleasing is not the path to success. You need to have the necessary conflicts. Read more about conflict management and setting boundaries
Taking on work you should not. We discussed this earlier, but it is important to mention it once more. Make sure you assess carefully which work and responsibilities you take on. Are you the right person? Can you tackle the issue successfully and well?
Not speaking up. This is similar to setting your boundaries but goes a little further. It is important to speak up when unjust things happen. If you want to be a leader, you cannot stay quiet. You will regret it and I regret many instances, where I stayed quiet. If your father for example speaks badly about your sibling, you should stand up for them. Especially when they are not present in the room. This also concerns giving feedback. It is fine to give feedback to the generations around you. Refraining from it will only make the situation worse. Especially when you end up acting on things, without ever having communicated the issues first. People will mark you as unpredictable or moody. Believe me, it is not nice to have this reputation within the family. Learn to address difficult topics and stand up for what is just.
Gossiping is also not a good idea. It is done extensively in some families. It is also done extensively in society. It never bodes well to gossip. It is not only cowardly to do so, but it will give a very bad impression about you as a person. What do you think about a person who gossips? Just answering that yourself will teach you more than I can write about it. Don’t do it. Be a person of integrity.
Taking credit for others’ work. This is something I have never understood, however, it happens a lot. A leader should never take credit when others did the work. Everyone familiar with the matter will know what you did. Also, something that can be really hard is to correct people when they give you credit. This has happened to me extensively. It is straining but so rewarding if you point out that it is not your achievement, but the team’s. Banish the word “I” as a leader and use “we”. Even if you believe it is your achievement alone. You probably did not do everything alone. And even if you did, others will not believe it so.
There is of course a bunch of mistakes you can make as a leader. There is more you can do wrong than you can do right. Being born into a legacy family will put you into a leadership position at a young age. If you want it or not. You are perceived as a role model by others around you. It is unfair to have this pressure, without choosing it. However, it is the situation you are born into, and you will have to deal with it in one way or another.
Business families intricacies
Let’s have a look at how to apply the things we covered to a business family and its intricacies. Navigating these well is paramount for you to fulfil your quest for legitimacy. We covered many of the business family specifics already. What follows is a wider look at topics that differ between a corporate and a business family enterprise.
The Family’s Legacy
The family’s legacy plays a very large part when it comes to NextGen leadership. Depending on the generation you are in, there have been generations before you who worked very hard to build what is there right now. They identify with the family’s legacy, which in turn makes it very hard to let go of control. For many families preserving the legacy is a focus. So much so that sometimes it is forgotten that a legacy is dynamic, and every generation builds on top of it. I have been in a situation where I did not care about the family’s legacy. It is easy to fall into this trap, especially when the legacy seems to be more important than you. You feel there is no space for you as an individual and you need to bend to what your forebearers did. How they behaved, how they thought, what they did and so on. However, it is not the right approach if you want to establish yourself as a leader in the family. You need to learn the family’s history. You need to understand the family’s network and relationships. You need to learn the secret sauce of the family, what is it that made the family successful?
Financial wealth is only part of a family’s legacy. There are several pillars to your family’s legacy and at the base of it, there are the family’s values and principles. And guiding all of this is the family’s purpose. In some families, this is not defined and brought to paper. So, it can be hard to navigate this. Try to understand and learn as much as you can. You do not need to agree with it, nor live it. It is enough to understand. The trick to the family legacy and your own path is, that you need to forge a place for individualism within collectivism. This sounds counterintuitive and it is not easy to pull off. There are things that drive you and things that pull you. You might differ greatly in character, skills and interests from the generations before you. These are often seen as weaknesses, but they can be the foundation for your leadership and for the change the family needs to continue being successful in the future. The NowGen and PastGen may not see it, and that is fine. Understand the legacy and show them the merits of change.
The Family’s Legacy: Financial Capital, Social Capital, Intellectual capital, Cultural Capital, Human Capital
Leadership in a business family
There are certain areas where you can build up your leadership capabilities. As a family member, you are part of several “circles”. This is referred to as the 3-circle model, which I like to increase by a 4th circle. You can establish yourself as a leader outside the family focusing on yourself individually. Either way, I encourage you to focus on yourself and to build up your leadership capabilities, no matter what the family thinks of you. There is a time and place for you to translate this into the family. You can do this by working in another company. You can learn leadership in your hobbies, for example in sports. You can establish yourself as a leader in your local community. Most families are intertwined with local communities, where they engage in philanthropy. Join a local club or a charity and practice there. Maybe you can convince the family to put you in charge of one of their charity projects. The harder parts are to establish yourself in the family business and the family. There is a much larger focus here than on the community and especially on yourself. In many families, it is not possible for you to join the family business. Either you campaign to change this, or you work on establishing a position on the supervisory board. Taking on a leadership position inside the family is not for the faint-hearted. You will need to show skills in managing conflict (link to other article), be able to understand everyone’s perspective and be an expert in the area that you want to lead in.
The 4-Circle Model of Family Business
In general, one important decision for you to make before you embark on your leadership journey is, do you want to work in the family business or on it. You have the world in front of you and can go in any direction you wish. You do not have to work in the family business to bring it forward. Every family member is a resource for the assets they own. There is a time and place when your expertise will be needed. As a NextGen your understanding and view of the world will be different and you will understand new trends better than the generations before you. Try to teach the older generations what is changing in the world. This may be just them asking you to “fix” their smartphone (usually it’s a simple matter). Even if those requests are tedious, it shows that you have knowledge in areas the NowGen or PastGen has not.
