March 2001

Family-owned businesses represent over 90% of the businesses in the United States today. The multi-generational success of the family business is of the utmost importance to the economy of our country, not only for the profits which they generate but also for the employment which they create. If our family businesses are to succeed into the next generation, they will need to be led by the most capable person, regardless of gender.

My passion for family members who work together in a family-owned business recently led me to conduct extensive related research. I studied the effects of succession planning on the career of the daughter in such a business. Is the theory of primogeniture, whereby the mantle of ownership is automatically passed on to the eldest son, still thriving in our fast-moving, technologically based society? Is it time to replace the old platitude, “Son, someday all of this will be yours” with a more egalitarian, non-gender based system?

Analysis of the study corresponds with what I see in today’s working world. When the daughter is currently working in the business on a day to day basis, there is a positive effect on her inclusion in the corporate succession plan. However, only 50% of the daughters interviewed perceived their fathers to be open to daughter succession. Of those daughters who believed their fathers to be open, 30% of their fathers were pre-retirement (between the ages of 52-65) and 70% were beyond a typical retirement age (between 66-80 years old). In the latter instances, with fathers beyond typical retirement age, it is highly likely that their openness reflects a pragmatic reality or a perceived lack of other options.

From these findings it would appear that primogeniture still persists in family businesses today.

The ease with which the daughters of business owners agreed to be interviewed and the extreme level of openness and honesty led me to believe that these women were waiting for someone to ask about their side of the story. These daughters had an average of 16.2 years of education and had been employed by their family businesses for an average of 10 years. They reported strong interpersonal and leadership skills. Reflecting the entrepreneurial qualities of their fathers, they felt themselves to be creative and visionary. Their integrity and ethical behavior were important to them in following in their father’s footsteps. These daughters were anxious to take a management position within the company to protect and grow the family assets.

If this were a description of a business owner’s son, or any male for that matter, would he not be considered a very strong candidate for management succession? Yet, according to the study, only 50% of the daughters perceived that their fathers would consider them as a possible successor to his position. I believe that we have a moral obligation to consider and groom the most capable candidates for management positions, regardless of gender.

As strong as the tradition of male succession may be, I do not believe that we are practicing good business judgment nor are we acting ethically when we continue to focus our attention on sons, who may never be as qualified as their sisters to lead our businesses. Some sons may not be as educated, capable, ambitious or loyal as the daughters who stand in their shadows. In addition to doing an injustice to the sons, we are robbing the daughters of their right to our support in helping them grow to the fullest of their capabilities.

For many decades our image of a CEO has been that of a male. Thus, ambitious career-oriented women have tried to mimic male behaviors. The time has come for business leaders to acknowledge that a different style of leading is not necessarily a less effective way of leading. A woman’s natural collaborative, team approach could be what is needed to turn any organization into a high performance organization. Her sensitivity could be a catalyst in building extraordinary employee loyalty.

Currently, research shows that only 4.7% of family businesses are headed by a female CEO. However, those same businesses predict that 25.4% of their firms may be headed by a woman in the future. A shift of more than 20% suggests that a large number of women may be very unsuspecting and ill groomed for such a radical change in their future careers. These women will need all of the encouragement and support that we can possibly give them. The lack of experienced mentors and strong female role models may make this transition particularly painful and frustrating. I believe that we, the leaders, have the responsibility to create a business culture that pays attention to the whole person, regardless of gender, and assist them in reaching their highest capabilities.