Ten years is half a generation—a long enough time frame that a ten-year vision will help guide families through major transitions, but a short enough time frame that it still allows for planning and accountability.
A lot of families think about their vision in terms of a much longer or shorter horizon—100 years or 3 years, for example. If you’re trying to achieve a vision that’s 100 years away, who is going to hold you accountable? A shorter-term vision is also not very useful. You’re not going to get your family to do anything of significance in only a few years, because it’s too hard to make changes. A short-term vision won’t help you anticipate or plan for any big transitions or changes in leadership.
When you project where you’re going to be in 10 years, you need look at it through three lenses at the same time—what the business is going to be doing, what the family is going to be doing, and what the board is going to look like as it pertains to family director development.
If the business is going to double in size in the next 10 years, and your family will need to put a new family chairman in place or hire someone from the outside—those are really big transitions.
Big transitions will go more smoothly if you have a plan. How do you need to grow your family’s capabilities in order to be good stewards of a changing business 10 years from now? And how can you position your family to be good stewards of their own relationships as the family itself becomes more complex over time? How do you prepare family directors so that they can be active participants on the board of a much more complex business?
If the family, the board, and the business are likely to become more complex over time, the family needs to have the tools to understand that.
There are three elements to consider when creating a family vision: family, business and board. Each of these entities will be in a different place in 10 years. The business may be double in size, the family may have quite a few more active members, the board will have more complex duties and perhaps different members in order to provide guidance to a company and family of increased complexity.
I’ve found that a 10-year time frame is just right. It gives you enough scope to think about what’s happening both with the family, the business and the board.
With the family, you need to look at the generation currently in leadership, the generation that’s getting ready to rise into leadership roles, and the youngest generation. Where will each of these groups be in the next ten years? Some may be retired, some may be ready to come in to the business or family governance. Each of these groups will need a plan. In the case of retirement, succession planning is needed. In the case of aging in to the family council or family assembly, there will need to be a program in place in the next few years to get them ready for “active duty”. And then there is that middle group – those who need to prepare for succession. You will need to put in a leadership and development program for these individuals so that they can be prepared.
If your family’s youngest generation is between the ages of 5 and 13, you’re probably not even thinking about them right now. But in 10 years they’re almost all going to be eligible to be part of your family governance structure. You need to anticipate that transition now, and think about what needs to be in place to make it a smooth one.
Understanding where the business will be in 10 years allows the family to prepare family members to understand and be good stewards of that business. If the business is going to grow in complexity, the family needs to have a plan to grow in capabilities along with it. This statement in the family vision, will provide guidance to the family governance to implement a development and education program, for example. This may also provide new and exciting employment opportunities for the next generation. Ensuring that the next generation is exposed to these exciting opportunities could be a way of ensuring continued family employment in the business.
In 10 years, the board will likely be very different from what it is today. The business will be much more complex and the directors will be required to make a very different contribution, including family directors. As the business grows, so must the board. The family vision may include a statement about the performance and readiness for next generation family directors. This will then direct the family governance to implement a director readiness program.
The ten-year vision helps the family grow to be ready for what’s ahead, and to develop a deep bench of qualified leaders within the family. It sets the context for all the things that will happen over the next 10 years, and tells you what you need to plan for.