Why emotional intelligence is the key to intergenerational succession
Intergenerational succession represents a significant challenge to family business. Though a common problem, misalignment between generations needs to be addressed for businesses to thrive into the future. Emotional intelligence could well be the key to bridging the gap. We take a look at how mentorship – and increasingly mindfulness – are helping family businesses to cross the chasm.

By Francois Botha
Published on Simple November 26, 2020

There have always been significant challenges associated with inter-generational succession, with the majority of family businesses not being able to succeed into the next generation. The challenge has escalated in recent times due to the growing mindset differential between the older, experienced community of business owners, who hold decades of institutional knowledge, and the new, up and coming pipeline of young leaders.

Research indicates that up to 75 percent of potential next-generation successors are not wanting to join the family business, a statistic that points to the fact that the next generation is not being adequately engaged, embraced, and understood. This is a challenge that is not just relevant to succession but indicates a general misalignment between generations that needs to be addressed for businesses to thrive into the future.

It is therefore not surprising that emotional intelligence is becoming an increasingly important engagement tool in its ability to recognize our own and others’ emotions and discern between certain emotions. Individuals are able to shape behaviour once armed with this knowledge and create the optimal conditions for group consensus.

Emotional intelligence is essential to strengthening interpersonal skills and is a toolbox people use to conduct business, negotiate difficult situations, and interact with friends, family, colleagues, and strangers on a daily basis. Self-awareness, self-management, social awareness and relationship management represent the four key traits of emotional intelligence – we explore how this can be achieved through mentorship programs and mindfulness practice.

There have always been significant challenges associated with inter-generational succession, with the majority of family businesses not being able to succeed into the next generation. The challenge has escalated in recent times due to the growing mindset differential between the older, experienced community of business owners, who hold decades of institutional knowledge, and the new, up and coming pipeline of young leaders.

Research indicates that up to 75 percent of potential next-generation successors are not wanting to join the family business, a statistic that points to the fact that the next generation is not being adequately engaged, embraced, and understood. This is a challenge that is not just relevant to succession but indicates a general misalignment between generations that needs to be addressed for businesses to thrive into the future.

It is therefore not surprising that emotional intelligence is becoming an increasingly important engagement tool in its ability to recognize our own and others’ emotions and discern between certain emotions. Individuals are able to shape behaviour once armed with this knowledge and create the optimal conditions for group consensus.

Emotional intelligence is essential to strengthening interpersonal skills and is a toolbox people use to conduct business, negotiate difficult situations, and interact with friends, family, colleagues, and strangers on a daily basis. Self-awareness, self-management, social awareness and relationship management represent the four key traits of emotional intelligence – we explore how this can be achieved through mentorship programs and mindfulness practice.

Mentorship as a vehicle for emotional intelligence

Mentorship is an important vehicle for practicing emotional intelligence between generations, and operationalising these insights through action. Through understanding the principles, priorities and motivations of the next generation and providing them with the necessary opportunities and exposure to grow and develop, business leaders are able to cross the chasm.

Often, the first form of mentorship that next-generation leaders experience is the most informal, but probably the most powerful: The dinner-table conversations of their parents that they hear and later take part in. The importance of this role-modelling, when it comes to shaping the values, principles and general business approach of future leaders, should not be underestimated and has a profound impact on the next generation, especially if an inclusive approach is taken towards them as they mature.

Though knowledge transfer is at the core of mentoring relationships, the direction is not one way. Mentoring allows mentors to simultaneously learn from mentees, and implement these learnings in their data to day life.

Within the business context, a mentor plays the role of influencing both the professional and personal growth of a mentee, often meaning that a more senior individual will take the responsibility of mentoring a less experienced junior. The duties involved will generally include sponsoring developmental initiatives, embedding the principles of effective leadership, motivating, inspiring, and supporting personal mastery and self-awareness.

“One of the greatest values of mentors is the ability to see ahead what others cannot see and to help them navigate a course to their destination.”John C. Maxwell, Author of ‘The 21 Irrefutable Laws of Leadership’

Taking the next step often requires a lot of consideration, even when the path ahead is seemingly open.

The growth of mindfulness as a practice

Where mentorship is by now a well-established practice, mindfulness is just entering the lexicon of the business world more readily. Mentorship is a learning and development partnership, whereby a more experienced or knowledgeable person helps to guide a less experienced person. By contrast, mindfulness is a practice focussed on the discovery of knowledge and insight within oneself. Though it starts with the self, the effects of mindfulness are far-reaching – with self-awareness, the ability to recognize and work with difficult emotions, and the cultivation of empathy for others having a ripple effect through teams and companies. In recent years, many companies — from Google to General Mills — have started teaching mindfulness in the office. Research shows that meditation and mindfulness training more generally offer businesses a real ROI – with real returns over the long run.

“Studies show that mindfulness strengthens our immune systems, bolsters our concentrative powers, and rewires our brains. Just as lifting weights at the gym makes our muscles stronger, so too does practicing mindfulness make our minds stronger. And the most tried-and-true method of cultivating mindfulness is through meditation.”David Gelles, “Mindful Work: How Meditation Is Changing Business from the Inside Out

Emotional intelligence drives results

Findings from numerous research projects highlight the significant benefits that emotional intelligent practices have for businesses. Where the well-established practice of mentoring, which positively impacts the mentees, mentors, and organizations as a whole, early studies of mindfulness paint a similar picture.

Productivity

An analysis of forty-three studies confirm that mentored employees receive higher compensation, a greater number of promotions and feel more satisfied and committed as a result of a clearly defined professional trajectory and alignment of personal and professional values. Researchers studying the effects of workplace mindfulness programs found that this training led to greater vitality, enhanced focus, and higher levels of engagement in the task at hand. Moreover in a tight labor market, where many companies struggle to attract top talent, mindfulness programs give companies a competitive edge.

Engagement

A survey of 170 sales and marketing professionals found that mentored employees felt more positively about their organization and their senior leadership and felt more informed. Moreover, with the nature of industry and work continuously changing and with new disruptive technologies like A.I. looming, creativity and innovation are essential business assets. Researchers at Erasmus University in Rotterdam, Netherlands found that just a few minutes of mindfulness practice led to statistically significant increases in “divergent thinking”.

Retention

The workforce has become increasingly transitory, and unwanted turnover poses a threat to most businesses. Experts estimate that unwanted turnover can cost up to 200 percent of an employee’s annual salary. Mentoring has been found to reduce turnover intention as well as actual turnover. When over 5,000 newly hired sales representatives were surveyed, mentored employees reported significantly higher organizational commitment and lower intentions to leave their organization than did non-mentored respondents. Researchers have similarly found a significant relationship between mindfulness and higher levels of commitment among employees to their current employer. Numerous studies suggest that mindfulness practice helps employees reduce stress and build what just might be the most valuable capacity in the digital age: resilience.

Emotional Intelligence Benefits All

With the world of business evolving at a rapid rate to adapt to the fast-changing demands of a new generation of consumers, achieving the objectives of sustainability and intergenerational wealth preservation places a higher priority on understanding the next motivations of the next generation. Where mentorship facilitates this knowledge sharing through a structured engagement, a broad adoption of mindfulness can help all generations to identify and communicate their own goals whilst cultivating empathy for others.

Inspiring, assimilating and preparing the next generation for leadership roles is fundamental for any family business. Emotional intelligence will play a key role in achieving this, not only through motivating loyalty and retention, but by unlocking and unleashing the talent and value that resides in these aspiring leaders, for the benefit of the business and society as a whole.

About the Authors

Francois Botha

Simple Founder. Strategy Advisor

Francois believes that the next generation of family leaders need new, simple tools and trusted experts with a fresh outlook.

Connect with Francois Botha View Francois Botha Profile

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