Developing the Next Generation of Leaders

By Jonathan Habbershon, High Center research associate

Phil Clemens, Chairman & CEO, Clemens Family Corporation
spoke to High Center members on May 10

Why train a next generation of leaders?  That was the question presented by Phillip Clemens, the Chairman and CEO of the Clemens Family Corporation and the keynote speaker at the May 10^th event for members of the S. Dale High Center for Family Business at Elizabethtown College.  Clemens began with a sobering truth that all business owners need to remember: “None of us has a guarantee of how long we’ll be around.”  Being prepared is the only way to ensure that when tragedy strikes your business and your family, both will rise from the ashes to find success. 

The value of solid leadership

Phil described the importance of solid leadership within the family.  The existing generation needs to develop leaders in the next generation.  Many businesses name a successor but don’t give much thought to the person’s ability to lead.  Developing adequate leadership can allow a succession to go smoothly and equip the successor with necessary skills to maintain the family business.  Through the course of leadership development for the next generation, a successor will hopefully become apparent to all and thus can have “buy in” from other family members.  The “buy in” from the rest of the family can support and encourage the successor spurring them towards success within the family and the business.

The timing of transitions

a slide from Phil's presentation

After the next generation’s development was discussed, Phil turned to the current generation of family leaders.  He emphasized the importance of timing with the transitions.  Family business owners can stay too long or not long enough -- both are a hindrance to the growth of the business.  When family members openly dialogue about what the current generation of leadership wants for their life and the business, these conversations help to avoid this problem.  The incoming generation can learn what the current generation’s wishes are for the business, their retirement and the future generation’s involvement.  No family members should ever assume anything about the succession plan.  When family members make assumptions about who will take over, when, how, and what will become of the business, they soon realize that someone else had a different idea than they did and friction turns into fighting.  Open communication is the only way to avoid the issue of assumptions and the possible fighting that could ensue.

Both generations involved in the handoff

The current generation has to establish what a smooth transition would look like for succession.  According to Phil families essentially have one good shot at a transition. After that any attempts will be uncomfortable and could possibly cause more problems for the family or the business than if proper preparations were made at the outset.  Honest and open conversation allows for all expectations to be understood and heard by all family members.  True investment in the next generation of leaders will help ensure that a transition is being made smoothly and to the right candidate.  The future of the family business rests with the next generation;  it is critical for the current generation to be thinking about how to make a smooth handoff. 

'Hurrah for spectrum of leadership transition issues addressed!'

Phil Clemens, Tony Martin, Matt Diller, and Dana Chryst

Our Leadership Transition panel shared a range of experiences and perspectives during our breakfast seminar on January 20.   "Hurrah for spectrum of issue provided," said one evaluator. "This provided a variety of 'real thoughts' to identify with and test," another said.

During the course of the two-and-a-half hour presentation, many stories and anecdotes were shared--and as another commenter said, no two stories were the same. Here are just four observances of our panelists:



Tony Martin
Martin's Famous Pastry Shoppe, Inc.

 "[When you work in family business], there will always by those who feel that family members got the job because they have the right last name. I feel I must work harder and better because of my last name."

--Tony Martin

Dana Chryst
The Jay Group

"Relative to family members working in the business, the key is treating everyone consistently. If a family member has a performance issue, they should be treated the same as anyone else."

--Dana Chryst

Matt Diller
Pre-cast Concrete Systems

"How do you get young people to want to be in the business and be empowered? My parents never told me to come back. I knew they wanted me to, but they allowed me freedom to go away. Don't force your children into the family business."

--Matt Diller

Phil Clemens
Hatfield Quality Meats

"What do you want your legacy to be? If you don't let the next generation take over and make this a legacy business, it dies with you."



--Phil Clemens

The complete presentation will be available on The Network of Family Business website soon. 



Leadership transitions--What could be more vital to a family business to manage well?

Leadership Transitions Panelists: Phil Clemens, Tony Martin, Dana Chryst, and Matt Diller

A diverse family business panel featuring family business principals Phil Clemens, Tony Martin, Dana Chryst, and Matthew Diller will discuss leadership and their views on leadership transitions during the S. Dale High Center's next breakfast seminar on Thursday, January 20, 2011, from 8:15 to 11 a.m.

Leadership transitions in family businesses are potentially volatile events. Typically, there tends to be a serious failure to plan adequately for leadership transitions in family businesses.

Consider these daunting statistics related to family businesses compiled by Key Resources:

• 88% of family owned businesses plan to stay in the family
• 47% expect leadership to change within 5 years
• 42% have not yet chosen successors (of the CEOs 61 years and older, 55% haven't yet chosen a successor)  
• 13% of the family members said the CEO would never retire; 34% said they were not aware of the successors intentions
• 20% have not yet completed estate planning

Is there any process more important than transitioning a company from one senior leader to another?

Because each principal represents a different viewpoint and level of responsibility within their family businesses, the panelists will offer wide-ranging experiences and varied expectations and results regarding leadership transitions in their companies.You'll hear from several generations during the "Leadership Transitions" panel--senior executives, rising executives, and next generation executives.

Moderated by S. Dale High Center Executive Director Mike McGrann, the panelists will be asked about some of the processes and best practices they have employed or are employing to ensure successful leadership transitions, and how their family businesses prepared employees and customers, other family members, and themselves for transitioning senior and executive leadership.

A videotape of this event will be available shortly after January 20th through The Network of Family Businesses website. If you live in Central Pennsylvania, and would like more information on this event, call the S. Dale High Center at 717-361-1275.