In 2014, Ana Botín took over the Banco Santander leadership after the sudden death of her father, Emílio. Although some critics felt that this process was nepotism, there is ample and shared evidence of Ana's skill. To this aura of competence will have contributed the way his father behaved: Dom Emílio has always been particularly demanding with his daughter (even having once fired her "at the request" of unfamiliar managers in the context of a merger project between Santander and another bank).
In talent management, as elsewhere in his role as leader of the global institution which he developed with undeniable success between 1986 and 2014, the former Botín family elder seemed to believe that the secret of success lies in the careful integration of the family element into the business conduct.
It dates from a well-known article published in the McKinsey Quarterly in 1988, where the consultant's authors stated that companies are obliged to view human resources management as a war of talent, where top managers seek answers to questions such as "why would a great manager want to join my company? " or "how can I hold this picture for more than just a couple of years?"
More than a quarter of a century after the publication of the article, talent management remains a relevant topic, as it can be seen from the result of a recent KPMG survey, where 418 multinational company leaders assume that the talent dispute will be one of its biggest topics of focus in the near future.
If the subject matter is relevant - for more or less obvious reasons - to any organization that wants to succeed, it becomes indispensable for a family business where to these obvious reasons comes a set of particular considerations.
Family talent management is one of the pillars (along with the consolidation of family assets and the strengthening of family unity) that lays the sustainability of the family business over the generations: when the family seeks to develop its members so that they can be industrious, accomplished, and contributing individuals - whichever way they choose - it is investing in its future because these people understand better its role in the system we call "family business" (a broader concept than family business) and will more easily find their way of contributing to the family's mission and goals.
When not properly framed the family element can be an obstacle to managing unfamiliar talent in the company: on the one hand, the specter of nepotism (real or imagined) is one of the main reasons for distrust for professional managers considering to join the boards of a family business; on the other hand, it is often family reasons that make family decision-makers uncomfortable with the prospect of seeking talent outside the family outline (will that person be trustworthy?).
Talent management has a direct and decisive influence on one of the most critical processes for family business survival - succession: after all, choosing the person (s) who will replace the current business leader should ideally go through the combination of talents in the several circles (family, owners, and management) and from different origins (family and unfamiliar).
When we talk about governance in the family business context, we should think about classic corporate governance - a set of goals, structures, policies, and activities that allow management to frame the business, ensuring that the company is doing well (in addition to doing well) - Good appears here not so much as a moral concept, but as synonymous with what we may call the ultimate goal of a company: to create shareholder value in a context of sustainability and respect for stakeholders) - but above all what we call the family government. The family government often attributed to the so-called family council, aims to:
help the family set the direction and achieve the mission;
support the family in maintaining determination and unity;
consolidate bonds between family members, business and other relevant activities;
maintain family discipline concerning the business and other relevant activities;
develop loyally, informed, capable and contributing owners and family members (while at the same time valuing the added value provided by unfamiliar people at several levels).
Good family governance can leverage talent management on all three fronts previously mentioned:
at family talent level, for example, through (a) structured investment in the education and development of family members in general and (b) the design and implementation of employment and remuneration policies for family members specifically involved in the business;
at the unfamiliar talent level, for example (a) leading the family to recognize the advantages of having professional skill sets that complement the family's capabilities, and (b) the mitigating effect on possible perceptions of nepotism that may occur, can be achieved through the employment policies for family members mentioned above;
at the succession level, in particular by leading the family to view the issue as a process rather than an event and to structure this process with the support of qualified independent persons (for example through the support of non-executive directors, who often provide decisive help).
These good practices are just some of the broader tools available to those who want to manage talent in their family business and have a family governance system.
Talent management should earn special attention in family businesses as the subject matter has some particularities in the context of these organizations. Investing in family governance is an essential step in overcoming the challenge and ensuring the sustainability of the family business over the generations.
As I never tire of repeating, in family businesses the key is to make the most of the family element by creating competitive advantages that family-free businesses can hardly replicate.