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[Music] hello this is Wayne rivers at the Family Business Institute as always thank you for tuning in please go to youtube and subscribe to our channel so you don't miss any of our blogs we would like to have your comments below and if you have any ideas about future blog topics things that interest you or plague you in your family business please let us know and we'll do a future blog and try to maybe get some of those questions answered so this week I want to talk about a fact I think intelligence is overrated and ultimately try to answer the question what do your successors in your family business need so I I was reading last week and I saw this statistic I think it was in some meme on you know on social media somewhere so I immediately discounted it thinking it had to be foolish but I checked it out and it comes from the Carnegie Institute and they said that 85% of your financial success has to do with your skills in what they refer to as human engineering so that's emotional intelligence empathy with other people and there was one other thing I forget what I was but look it up yourself Carnegie Institute 85% of your financial success is due to your people skills in so many words well I was intrigued with that and I have some other support information to back that up but know that keep in mind the caveat here they were talking specifically about your financial success but I'm willing to bet that if other studies are out there that your people skills contribute to your success in all other walks of life - is probably not just your financial success I think this was the focus of the study but I'm willing to bet that that statistic is probably true your emotional intelligence contributes to your effectiveness in so many areas of life so when it comes to succession the research the family business research on succession seems to always focus on professional development technical skills and certifications and designations and things like that and and and it doesn't focus enough on personal development and people skills it's it there's just too much effort and emphasis on the technical aspect of our businesses and not nearly enough on the people aspects of our businesses so when it comes to this next generation successors we don't have good evaluation metrics the metric that family businesses use the most and you've heard me lament this before his hours work because you can see somebody rolled in the door at 7:00 and they left at 7:00 p.m. and golly Moses that person put in 12 hours so he or she must be fanatically committed to the success of the business well maybe they're just for workers maybe they're inefficient maybe they spend all their time on the phone or answering emails or something you know work hours is a really flawed metric for whether people are good at committed to successful in your family businesses or not the other thing that the technical emphasis disregards almost is is a support network most young people you know you're 20 and 30 year olds in your family business today family or non family executives for that matter don't have much of a support network out of work they don't have any peers or they have very few peers with whom they can talk and share ideas and issues and challenges and try to find solutions and things like that so there again focus on the technical crowds out the people aspect so let's talk about what your successors actually need well there's this thing around Daniel Goldwyn came up with a long time ago called EQ emotional intelligence contrasting EQ with IQ intelligence intelligence you know problem solving intelligence EQ is emotional intelligence it's understanding people empathizing with people sensing their needs understanding your own needs and being self-aware and that's the second thing that your successors need is they need to work on themselves they need self development they need to have constant constructive feedback through 360-degree instruments or executive coaching or things like that they need feedback on themselves and how they can improve is not just technocratic they need a peer network they need people they can talk to and share with challenges opportunities ideas innovations all those things you know you can rely on them I suppose as being younger to certainly bring you things from time to time but wouldn't that learning curve B shortened considerably if they also had a peer network that they could tap into to bring them ideas so they could bring them back to the senior leaders in the family business they need training on communication primarily on listening listening would be the number one thing they also need training on another aspect of communication which is vital in business if you think about it and nobody ever talks about this they need some training on negotiation you know everything in business from deciding whether or not to give an employee arrays to negotiating with a customer there's so many things in a family business even inter family conversations especially if they result in disagreement require some element of negotiation so that's an important piece of the training and then one of my favorite pet peeves I know you've heard me talk about this for your successors need training and managerial finance not compliance finance not putting the right number in the right box on a silly tax return not making sure the balance sheet balances you ought to have people to do that for you but managerial finance which numbers are really important in my business what metrics do I need to really look at and focus on what key performance indicators kpi's do I need to be looking at in my business to know that we're on the right track or the wrong track so you know the idea basically put the public accounting industry has sprung up and it's all about trying to save taxes at the end of the quarter or the end of the tax year and what I'm saying is the training there is misplaced when it comes to your successors who will run your business in the future they need managerial finance training not compliance accounting training so ultimately what your successors need to learn is to think like business men and business women it's it's not so much that their task doers or technicians in your business or they're really good at IT those things are fine but for the people that are really going to run your business in the future that are going to drive your future success they need to be leaders and the way they get to be leaders has a lot more to do with who they are as people than what they can do as technicians we'd love to have your comments thanks very much this is Wayne rivers at the Family Business Institute [Music] you
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