Business Mentoring for Your Kids
Apply now to be an Entrepreneur 360™ company. Let us tell the world your success story. Get Started »
"Father knows best" doesn't always work when it comes to mentoring the heir apparent to a family business. Sometimes the parent-child relationship is too close, too stormy or too subjective for a learning environment to flourish. Still, the successor has to learn the business. One alternative to parent-as-tutor is the use of nonfamily managers to act as mentors to the up-and-coming leader or leaders. Nonfamily managers offer a distinct advantage in that they can be objective and more businesslike in preparing the junior generation for succession.
"If a family business decides to use nonfamily managers as mentors, they have to develop a well-defined, well-structured mentoring plan," says Ed Hoover, co-founder and president of LSi Resource for Family Business Management, an Oakbrook Terrace, Illinois, family-business consulting firm. Otherwise, the whole process becomes enmeshed in personalities or entangled by family feuds.
When formulating a plan for nonfamily manager mentoring, the following issues should be addressed:
- Who should mentor? In companies with several skilled senior managers, one or a number of them could lead mentoring efforts. Most of the time, the senior family member initiates the process after obtaining approval from the successor and other, pertinent family members.
At Monsen Engineering Co., an air conditioning design, installation and service company in Fairfield, New Jersey, the impetus to mentor Eric Monsen, son of president Dick Monsen, came from the chief operating officer and the chief financial officer. Both senior managers had attended a seminar on family business succession and left concerned that without a strategy to prepare then 29-year-old Eric to lead the company his grandfather had started in 1948, the company's future was in doubt.
"I was ripe for their suggestion," says Dick Monsen, who, at 59, was beginning to think about retirement. They set up a committee that included Eric and Dick Monsen, the two executives and an outside executive coach, and dubbed it the Merlin Group (after the magician who, according to Round Table legend, helped Arthur become king). The two senior managers handle most of the internal, day-to-day mentoring; the outside coach helps Eric develop his leadership skills.
Selecting an interim leader to act as the mentor is another option. Parents ready to retire might opt to hire an interim president when they take leave of daily responsibilities, if their successors are not quite ready to take the helm. In this case, part of the new president's job is to mentor the heir apparent so he or she is ready to take over in a given number of years. For example, Shel Schultz knew when he assumed the presidency of Scranton Gillette Communications, a business-to-business magazine publisher in Des Plaines, Illinois, that one of his prime tasks was to broaden the experiences of previous president Halbert Gillette's two sons, Ed and Hal, so that in time Schultz could step down and they could step in.
- What should mentors know? Before a nonfamily manager assumes a mentoring role, he or she should be clear about the latitude of his or her decision-making responsibilities, advises Harvey Meier, a family-business consultant in Spokane, Washington. Among the issues to be addressed: Can the manager discipline the successor or decide the successor's compensation and job duties?
Once the parameters of the mentor's authority are established, Meier says the family has to assure that they will support the manager and that the job will be worthwhile, either through written guaranties of job security or additional financial compensation.
- What shouldn't mentors do? On occasion, mentors--even those with verbal assurances from the family that they are supported in their precarious roles--feel that their positions, security, informational edge or personal relationships are threatened by the successor. They might try to sabotage the mentoring process by delaying it, not including the successor in meetings or withholding important information. Any action that seems like a stalling tactic should be openly addressed so it is not repeated.
At the core of a mentoring plan is an assessment of the successor's capabilities: intellectual, educational, communication, and leadership strengths and weaknesses, as well as his or her skills and interests. Once that assessment is made and discussed, the successor, senior family leader and mentor or mentors can develop a plan to improve weaknesses and capitalize on strengths.
That's what the Merlin Group is doing with Eric Monsen, who is enthusiastic about the idea. The committee determined Eric's lack of engineering skills wasn't important as long as he has good technical people around him, but strengthening his already obvious leadership skills is necessary for the company's continued success.
Evaluating the successor's capabilities is just the start. When the mentoring plan is in effect, there has to be sufficient teaching, training and monitoring of its assignments and goals. "Specific goals--what successors must do, what must be accomplished before they move to the next step--are necessary if the younger generation is to move through the plan," says Hoover.
The plan should be of limited duration, anywhere from five to 10 years, Hoover contends. At the end of the successor's mentoring, barring any unforeseen problems, leadership is transferred from the existing leader to the new one. And retiring business owners can sleep a little sounder knowing they've done all they can to keep the business in good hands.
LSi Resource for Family Business Management, 1 S. 280 Summit Ave., Ct. C, Oakbrook Terrace, IL 60181-3948, (630) 495-7600
Harvey Meier, 9 S. Washington, #505, Spokane, WA 99201, (509) 458-3210
Monsen Engineering Co., 6 Daniel Rd. E., Fairfield, NJ 07004, (973) 227-1880
Scranton Gillette Communications, 380 E. Northwest Hwy., Des Plaines, IL 60016, (847) 391-1022
Patricia Schiff Estess writes family business histories and is the author of two books, Managing Alternative Work Arrangements (Crisp Publications) and Money Advice for Your Successful Remarriage (Betterway Press).