Family business leadership transition: How an adaptation of executive coaching may help
Charmine EJ Härtel
Department of Management, Faculty of Business and Economics, Monash University, Caulfield East VIC
Gil Bozer
Department of Management, Monash University, Caulfield VIC
Leon Levin
Department of Management, Monash University, Caulfield VIC
PP: 378 - 391
Abstract
Within the traditional business organizational climate in which an executive coach operates, the identity of 'the coached' (coachee) can be quite clearly differentiated from the business identity. This is not the case within the world of family business, where the incumbent family business leader, the successor, the business and the family culture, are interwoven.
This unique feature of family business means that, for executive coaching to be effective within the family business environment, a radically different approach to that used in traditional business environments must be adopted - namely, the consideration of what generally are thought of as noneconomic variables.
This article represents a first attempt to effectively address the key and unique variables executive coaches need to know to work within the family business environment.
Keywords
family business, family firms, executive coaching, succession management, succession planning, succession failure, succession decisions, family enterprises, family-controlled firms, leadership
Article Text
Family business is the foundation stone upon which most, if not all, evolving economies are based (Gómez-Mejía et al 2007; Hunter & Wilson 2007). Indeed, more than two of every three organizations are family owned and/or managed (Barnett & Kellermanns 2006; Lee 2006). What is alarming is that this segment of the economy is facing an impending crisis, and little has been done to assist family business owners to successfully resolve this looming threat.
Family business survivability depends upon a successful transfer of leadership as owners retire. As many current family business owners are baby boomers, many are or are about to retire (Barnett 1999), giving rise to a potential succession crisis en masse. Ip and Jacobs (2006) underscore the threat to survivability - which leadership transition presents for family businesses - that only 5-15% of European family businesses reach the third generation, and 30% of closures can be attributed to transfer failures. The size and severity of the issue leave no doubt that there is need for a technique to support incumbent family business leaders successfully to traverse the unique challenges associated with succession planning in a family business. Here, we suggest an adaptation of the executive coaching framework as a means to achieve this aim.
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