Leadership Assessment

Leadership Assessment

“For many family businesses, leadership assessment is not a common practice. Because of that shortcoming, many family businesses never reach their true potential,” according to leading family business expert Don Schwerzler “Leadership assessment in a family business requires “tough-minded” entrepreneurship – people who understand that the best way to build family wealth is to build the business, better and faster!”

Schwerzler has been studying and advising family business owners for more than 40 years and he is the founder of the Family Business Institute headquartered in Atlanta GA.

Growing and running a family business consumes a lot of energy because the family business entrepreneur often has to wear many hats – sometimes too many hats!

Over time it is sometimes easier for a family business to pass an opportunity rather than exploit the opportunity – simply because the leadership is over-stretched or simply burned-out.

Another wrinkle in the equation is that many family businesses are "analytically impaired" - they are not able to properly exploit the true potential of their business.

Leadership assessment also comes into play as part of the succession management process. Often the major issues for the family business owner is have a family member(s) continue to manage the business – transitioning the family business ownership from one generation to the next.

But what if that is not the best option?

What if selling the business is the best option in terms of building the wealth of the family?

Author Tom Deans addresses that contrarian view in his book Every Family Business.

Why do the Merger and Acquisition firms aggressively seek out family businesses?

Simply stated, family-owned businesses are often seen as underperforming – not realizing the true potential of the business.

When family businesses need recapitalization, the financial advisors first look at market opportunities and then make a leadership assessment.

How likely is the resident management team to succeed in growing the business in size and profitability?

Consequently, part of the “deal” is to bring in fresh management talent – top executives who have access to resources and who are highly motivated to make the business more successful, quickly.

When a family business owner seeks our help to reinvigorate his/her management team, one of our family business experts is Gary Payne – an executive recruiter who has a solid reputation for finding “rainmakers” for family businesses.

Finding top talent for a family business is not a skill set that most executive recruiting firms have and they end up trying to stuff round pegs into square holes. For a family business, that can be a catastrophic mistake.

“The key is in understanding family business and family business dynamics,” notes Schwerzler.

How does the executive search for top talent work for a family business?

Payne presents an executive White Paper that helps to explain the process that has proven so successful.

Succession Planning – Leadership Assessment

In many Family Owned Businesses, there comes a time when the current leadership structure has to change. This could be for many reasons:

Perhaps the current family leader is at retirement age and there is no family member ready or willing to take over.

Sometimes, the family business needs to bring in outside leadership in order to increase organizational equity and value.

If the current family owner is the face of the business, it might be necessary to affect a smooth leadership transition to increase organizational value for the future.

Making the decision to bring in a non-family CEO is often an emotional one for the family, but not always.

In order to manage these emotions, it is critical that the long term family vision for the business be agreed to and documented fully by all involved family members or the Family Board, if one exists.

This future vision is critical to develop as the search for new leadership begins. Whoever is chosen as the final candidate must be comfortable that they are moving into an opportunity where the long term vision and goals of the business are consistent across the family unit.They have to understand the unique culture of the business and what is expected both short and long term.

In our experience, the skills, attributes and abilities of the executive are rarely the cause of failure of a new leader into a succession plan opportunity. Almost always, the reason is tied to “fit”.

For example, misalignment of values is often a reason for failure; the style of leadership of the next executive is significantly different than the current Family Leader or CEO; behaviors that are valued in general by the family are not in alignment with those of the new leader, etc.

In order to ensure that a match that works and lasts long term occurs, the following basic process should be followed:

Needs Assessment – Make No Assumptions. Done properly, this step sets the stage for a successful search. We ask questions that many don’t think of: Culture, Values, Mission, Valued Behaviors, Political environment, leadership attributes, the opportunity now and in the future, specific expectations, the works! During this phase, it is critically important to ensure that there is a clear understanding of the exact type of person that should be identified; whether the person is a visionary, strategic thinker, problem solver, industry expert, etc.

Develop Search Strategy (Road Map) – Develop a comprehensive search strategy in concert with the current family business leadership staff and then keep them informed throughout the entire process.

Develop Position description – The Position Description is the least complicated part of the process. This is what you usually read in a search specification. A necessity for sure; this alone however is inadequate as a comprehensive search specification.

Develop company positioning – Recognize that all family-owned companies have a brand. The company positioning should include the most salient and current elements of the company’s story, mission and objectives. Cutting and pasting verbiage from the company’s website is rarely adequate in this regard. Develop opportunity positioning – Establish a clear and compelling statement. Be crystal clear here. Often, to find the right person, we have to extract needles from haystacks. There must be a story to tell and a compelling argument that would cause a reasonable human being to be interested in the opportunity.

Develop expectations – Focus on the doing, not just the having. A focus on four or five key specifics and time tables can do wonders to narrow the laser when zeroing in on the very best candidates for your specific leadership Role.

Candidate Sourcing – Dig and dig deep. Conduct fresh, original, and targeted research for each assignment including in-depth direct sourcing strategy. It is important here to utilize a vibrant, dynamic approach to sourcing candidates rather than depending on a stale Rolodex or simply people who the family may know.

Initial candidate contact and Candidate development – Work the list in its entirety, uncover and explore every possible lead.

Collection & Evaluation of Candidate profiles – Here we pro-actively identify and approach individuals whose experience, credentials, skills and accomplishments are appropriate for the position. We procure resumes and accumulate the largest possible pool before the evaluation process begins. Subsequently, we utilize a numeric scoring system and telephone interviews to narrow the field to a suitable group of semifinalists.

Presentation of Twenty Day Market Report – All communications systems are fully customizable based on individual client needs and desires. Information such as brand identity, competitive intelligence, marketplace reputation and other information in which clients may have interest can be included in the report.

Candidate Assessment – This is a critical stage in the Search process. We must utilize an assessment tool designed to assess FIT for a specific family business organization with the specific Position. This instrument is extremely useful in assessing a candidate’s thinking & writing style, responsiveness, ability to lead in situations specific to the client, values, career objectives, strengths and weaknesses. This instrument is a key element in ensuring acceptance of offers extended; it also causes candidates to self-select out of the process if they don’t feel up to the task.

Evaluation of Candidate Assessment - results and formulation of semi-finalists

Conduct 360° Reference Audits – 360 Degree Reference Audits should always be conducted in advance of the presentation of candidates. The Search Team must speak candidly to two superiors, two peers and two subordinates for 25 minutes each on average. These audits are not conducted as a formality or afterthought; but rather as a critically important part of discovery in order to fine tune the elements of fit. It is known that six references at different levels allow us to see patterns in a particular candidate’s propensities, strengths and weaknesses. Clients see names, titles and relationship information of references as well as full reference disclosure. Output is not tied directly to individual contributors.

Presentation of finalist candidate presentation packets – Presentation packets typically contain significant detail on the candidate and are extremely comprehensive in nature. Clients see candidate profiles, executive summaries, comprehensive interview transcripts, global background checks and 360° Reference Audits.

Conduct Interviews with Family-Owned Business Stakeholders – Each decision maker involved in the client interviews receives a full candidate presentation packet on each candidate in advance of the actual face-to-face. This provides a tremendous tool for the interviewer to ensure they are addressing all the critical needs of the organization.

Finalize offer – If the Family has retained a Search Firm, they would typically make the offer and secure a verbal acceptance before the formal offer letter is delivered. Once the final offer is accepted, follow up is done during regular intervals with both the Family Stakeholders and the new CEO or Business Leader to ensure future problems and issues are managed appropriately.

As you can see, the process to ensure the right fit is detailed, time consuming and involves a significant number of factors that go into determining future success.

Industry experience, background, culture fit, sensitivity to family issues, etc. are all critical factors to ensure the Family Stakeholders get the right value from their new CEO or non-family leader.

Authors Note: Payne graduated from the University of Texas with a degree in Finance and began his career in the oil and gas industry. Later he was recruited to be Chairman and CEO of a manufacturing business. After doubling the size of the operation he sold his share in the business and now he helps develop and grow entrepreneurial business venture in the US and abroad.

Gary Payne Interview

If you are a family business owner interested in improving the results of your management team, a good place to start is by taking our Leadership Assessment Survey. The assessment is based on the research conducted by our internationally recognized expert on Leadership and Organization, Dr. Ken Mackenzie.

According to Professor Mackenzie, there are 29 Leadership Practices that impact the success of an organization. To take the survey, click Leadership Assessment Survey If you have questions about leadership and governance in your family business, you can pose your questions using the ASK THE EXPERT form.


Do you have questions about your Family Business?
Don't have the answers - don't know who to ask?
It's FREE to

Contact the


Reply within 48 hours.


Chaos Busters - The Management Guide

Identifies 160 Key Business Questions

  • 160 Key Business Questions will stimulate creativity and innovation for your entire management team!

  • 160 Key Business Questions are the keys to unlock the hidden potential of your organization!

  • 160 Key Business Questions will save you time and make your work more effective!

  • 160 Key Business Questions is a Multi-purpose tool with unlimited applications!


How Well Organized is YOUR Organization?

Your Business Will Succeed...


You have The Roadmap for Success

That's What

The Practitioner's Guide for Organizing an Organization
Is All About

  • PGOO shows how to identify the most pressing problems to solve
  • PGOO introduces the ODS-OL (Organizational Diagnostic Survey –Online) - an electronic assessment tool that is highly effective, easy to use, systematic and data-based
  • PGOO explains how to produce a better-organized organization

Family Business Experts Understands
Family Values
and Business Systems

Return from Leadership Assessment to
Change Management Theories Page