Importance of Executive Coaching in Family Managed Businesses

India has the third-highest number of family-owned businesses, and these businesses are the major contributors to the growth of the Indian economy. Each family business is unique and comes with its own strength and challenges. Since the family businesses operate with multiple stakeholders, it is important to have effective leadership to successfully drive the business to the next generation.

While the family leaders manage the complex business structure, they take very less or no support for them to effectively manage the business. Executive Coaching is getting popular in the corporate world, but the benefits are often less understood in family-managed businesses. Working with the range of family business leaders closely, I find that the following are some of the major benefits of Executive Coaching, specific to the family business segment.

1.Having a Sounding Board: When it comes to leadership in the family business, it is not just about the one leader at the top, but it is also about the other family leaders. Each member would have different levels of skills, involvement, responsibilities, and challenges. Having someone to talk through their thoughts and actions and validating them, gives a lot more clarity to manage their functions and behaviors in the business.

2. Better Communication and Building Trust: Today’s family businesses may have leaders across generations working together towards business growth and creating a legacy. The coaching helps to create an open mindset to listen to each other and handle disagreements and criticism positively. When the leaders contribute to the discussion equally, they become more effective at making mutual decisions.

3. Managing Differences: Since coaching is built on trust and openness, the family leaders share their concerns and find a way to professionally handle them. Coaching helps them in identifying and handling the difference with the right stakeholders at the early stage and get them resolved through healthy discussions, avoids major conflicts at the later stage. This also helps to increase the trust between each other, which is the fundamental element in building a successful family business.

4. Better Interpersonal Relationship: The family business involves roles from family members and non-family professionals. The coaching conversations help the leaders to look at the situation not only from their point of view but understand others' perspectives. This helps them to align more quickly, be willing to come to each other for help, and staying together during uncertainties, and contribute effectively.

5. Succession Planning: The business transition to NextGen is a critical stage in any business family. It is not only important to groom the NextGen Leader but also to support the person moving out, which is effectively handled through coaching. The NextGen Leader is encouraged to explore new ideas without discarding their business fundamentals and is able to create a collaborative approach to handle the changes sensitively.