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The External CEO in a Family Business
Bringing in an external CEO to a family business presents unique challenges, but it also opens new doors for business growth and professionalization. In the Peruvian business context, this practice is becoming increasingly common.
This move must be strategic and highly professional. According to Diego Cubas, CEO of Peru and President of Latin America at Cornerstone, “four out of five family businesses experience conflicts when integrating an external CEO, for a variety of reasons.”
According to the talent management specialist, bringing an external leader into a family business can present challenges such as:
1. Resistance to change. “Members of the owning family may resist relinquishing control and accepting the decisions of an external leader, which hinders the implementation of new strategies and processes,” says Cubas.
2. Cultural differences. The culture and values of the family business may clash with those of the external CEO, especially when the new executive lacks prior experience as a general manager in a family business or lacks genuine empathy, creating difficulties in integration and aligning objectives.
Relationships
A CEO needs to establish strong relationships with all stakeholders involved; they must identify who the influencers and decision-makers are within the value chain.
The inability to build and maintain these relationships can lead to failure.
