Identified need:

The founder/owner of a successful, family-owned automotive manufacturing company was considering retirement. His son and stepson were on the management team. The founder/owner had a perception of the strengths and weaknesses of each, but wanted an objective assessment of their leadership potential before concluding on his retirement and succession plans. BCG was hired to determine the leadership potential of each son, and provide counsel during this delicate transition planning process.

Recommendations:

We developed a plan to coordinate a comprehensive assessment of each son. Phase One was an objective psychological assessment. Phase Two was a 360-degree survey, a process to collect feedback from multiple perspectives on a variety of leadership competencies. It was agreed at the beginning of the engagement that each son would "own" his respective assessment findings, and determine the actual test results that he would share with his father/boss. However, it was also agreed that implications and recommendations for development would be openly communicated. This is commonly arranged in order to lessen any initial anxiety of participating in a thorough assessment of this nature.

Action:

Each son participated in the comprehensive psychological assessment, and received results in a personal feedback session and written report. Areas covered included mental abilities (problem solving), interests (i.e. selling, managing, working with numbers), and personality (i.e. energy, leadership, thoughtfulness, sociability).

Each son also took The Denison Leadership Survey (a 360-degree instrument that links leadership development and organizational culture to tangible bottom-line performance measures). The specific areas measured included:

· Adaptability - Creating Change, Customer Focus, Organizational Learning
· Mission - Strategic Direction & Intent, Goals & Objectives, Vision
· Consistency - Core Values, Agreement, Coordination & Integration
· Involvement - Empowerment, Team Orientation, Capability Development

The 360-degree process compares an individual's self-perception with that of his co-workers (boss, peers, direct reports) using confidential surveys. In this unique situation, the boss was each son's father, and each son completed a survey on the other as a peer.

Results:

The results of the comprehensive assessment validated the founder/owner's initial perceptions of each son's strengths and weaknesses. It also contributed significant information on their leadership potential. The founder's son scored particularly high on areas of customer focus and core values, but low in areas of gaining involvement of others and strategy development and implementation. He was viewed as working extremely well with customers and making decisions with a strong sense of integrity. The stepson's personality was that of an introvert, preferring to work independently on administrative assignments and special projects. His interpersonal skills were not as strong, frequently resulting in strained relationships. As anticipated, the sons eventually shared all results with their boss/father. BCG created a developmental plan for each son in their anticipated future roles

BCG worked with the founder/owner to make several critical decisions regarding himself, sons, and the organization. A senior executive was recruited to join the management team. This person was brought in to provide the necessary infrastructure, policies and procedures lacking up to that point. He was also there to mentor the son to eventually take over as President. An opportunity for the stepson was found in a subsidiary company. Unfortunately, his behavior had led to relationships that were detrimental to an effective management team.

During the assessment phase of the project, it was learned that the organization would benefit from developing a strategic plan. BCG recommended and facilitated a planning process with the son as team leader of the planning team. In this manner, the son could take the lead in establishing himself as the leader of the new direction of the company. Stock ownership started to be shared with the son and stepson as a way for the founder/owner to begin his transition into retirement.

Special note:

Family businesses always create unique dynamics. Therefore, it is critical to be cognizant of three development dimensions that make up a family business:

· Ownership - controlling owner, sibling partnership, cousin consortium
· Family - young business family, entering the business, working together, passing the baton
· Business - start-up, expansion/formalization, maturity

In the above example, the ownership was with the controlling owner. While he had dreams of passing ownership to a sibling partnership, the results of the leadership assessment altered these plans. From the family dimension, the business was in the "passing the baton" stage, although a senior executive needed to be recruited in order to support/mentor the son. Lastly, the business had reached maturity, necessitating a strategic plan in order to revitalize the strategy for future success. Understanding these developmental dimensions is critical in working successfully with a family business.

BCG Services:

Similar dynamics are found in all small businesses, but they are particularly complex when family is involved. BCG has vast experience in assisting family businesses and small businesses in leadership/management development, transition planning and other critical and strategic planning areas. Balancing objective data with the dreams and aspirations of leaders can be extremely delicate - part art and part science. BCG can assist in walking this tricky tight rope. During the assessment phase of the project, it was learned that the organization would benefit from developing a strategic plan. BCG recommended and facilitated a planning process with the son as team leader of the planning team. In this manner, the son could take the lead in establishing himself as the leader of the new direction of the company. Stock ownership started to be shared with the son and stepson as a way for the founder/owner to begin his transition into retirement.