Exploring leadership for private family businesses succession in Trinidad

Private Family Businesses (PFB) contribute significantly to gross domestic product and employment rates in many countries globally. However, only approximately 30% of such businesses are passed on to the second generation and approximately 10% to the third (Lambrecht 2005 and Family Business Institute 2016). This highlights the importance of understanding what common factors contribute to continuity and successful transition in PFB. This study aims to explore how successors perceive the leadership qualities required for continuity in their PFBs, and the perceptions of the family business succession process in the Caribbean nation of Trinidad.

A qualitative methodology was adopted using in-depth semi-structured interviews with open-ended questions. Interviews were conducted with eleven purposively selected PFB leaders across the island of Trinidad. Trinidad is the focus of this research and accounts for 95% of the population of both islands. Future research could be conducted on Tobago. Interviewees comprised first- and second-generation leaders with ten existing PFBs and one family business that no longer exists. The results show that none of the eleven leaders had formal succession plans as they generally believe succession planning was not a strategic requirement for family business continuity. Respondents largely indicated that succession could take place through a conversation between the parent/leader and the successor, as most second-generation leaders interviewed had experienced. The results also provided valuable insight into critical qualities deemed necessary for leaders to achieve continuity in their family businesses including capability, honesty, and integrity, which emerged from the data, and vision and effective communication, which were from the conceptual framework. Leaders believe that, with these qualities, including industry knowledge, a sound knowledge of all activities of their respective business, and the support of their parents/incumbent, continuity of the PFB is likely. The leader’s survival, with some measure of annual increased sales year over year, will lead to long-term success, thus having generation continuity.

This research extends current knowledge of how continuity in PFBs within the Caribbean may be achieved, identifying leadership qualities essential for success, by utilizing PFBs in Trinidad as the source of data. Future research should seek to investigate how PFB leaders interpret and measure success and continuity in their businesses.