Family matters.
Business too.

That close to 72% of the world’s businesses are family-owned says a lot about this very special kettle of fish. Promoter-entrepreneurs show savvy in surviving economic, political and other challenges. There are some, though, which they often find not so easy to navigate.

Many entrepreneurs prefer to run their businesses themselves. This is understandable; they have more at stake and carry significant risk on account of failure. After all, in the best cases, the buck comes from and stops with them. 

This often makes it difficult for them to allow professionals to take leadership roles or high-stake decisions. Succession planning, transferring leadership, developing institutionalised competence rather than exertion of personal control, and continual learning and self-reflection are often challenges that these otherwise gutsy people face. 

Many have track histories of successes and have earned the trust of their financial partners. But that particular legacy is not transferable; equity ownership and leadership acumen are not synonymous. Succession for scions isn’t simple; despite their education, they must possess what it takes to run a business and earn stakeholder trust. Mere experience of sitting on a Board does not confer board leadership skills.

Then there are hard realities too. A promoter I know was thrown (putting that very mildly) when one business decision his “professional” COO made (contrary to the promoter’s own opinion) cost the enterprise $15 million in two days. And this is not referring to the stock market.

If you’re an entrepreneur or an investor, think about building leadership capability in your company. You might start slow and small, but there’s no escaping it.

Would you like to share your thoughts?