Preparing the Next Generation of Leadership: Eight Critical Skills That Signal Readiness

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One of the most daunting decisions business owners face as they contemplate transition and succession is choosing the best candidate to lead their company forward. You may now be facing this challenge yourself … or certainly will at some point in the future.

Getting ready for succession from both perspectives — yours and the next generation’s — can be complicated. Very often, two dynamics exist: on one side, the younger generation feels ready and wants the freedom to make daily business decisions. From your vantage, however, you may be ambivalent about their readiness for the responsibility they will inherit.

Delaying is Not the Answer

It’s easy to put off mentoring and preparing those next in line for leadership, particularly given the other daily demands you face. You may also think that delaying action to formally engage the next generation in leadership development can emotionally protect them or, perhaps, satisfy your own desire for control and daily involvement. However, leading a business includes the responsibility of leading the next generation into a successful succession. When done well, and with the right candidates, new leaders emerge.   

Eight Skills That Show Your Next-Gen Is Ready  

There is a significant difference between knowing how to do one’s job and knowing how to lead. With more than thirty years of combined experience across business and sport, our team has found that the most successful leaders consistently demonstrate eight critical skills. Creating opportunities for the next generation to develop these leadership skills is an investment in both their future success and the ongoing legacy of your business.

When your next-in-lines exhibit these traits, you’ll know they’re ready: 1) Resilience, 2) Knowing When to Ask for Help, 3) Leading Through Confidence and Compassion, 4) Communicating, 5) Building Healthy Team Dynamics, 6) Allowing Others to Lead, 7) Operationalizing Core Values and 8) Stepping Out of the Weeds. We explain each below.

1. Resilience

Resilience is often more dynamic than simply maintaining a positive attitude. Although optimism is beneficial, true resilience encompasses the emotional, mental, physical and often spiritual ability to center oneself and overcome life’s obstacles. Great leaders possess the capacity to remain grounded and self-aware during trials and tribulations, choosing to move forward with confidence and strength. This internal process cultivates a deep sense of self-belief and the motivation to continually improve.

Fortunately, resilience can be taught and learned. It requires intentional reflection, support and encouragement from mentors who model composure and adaptability. As the next generation faces unknown challenges in an ever-evolving business landscape, resilience will serve as the foundation for their leadership. The ability to rebound from setbacks, navigate uncertainty and stay committed during times of ambiguity will define a leader’s effectiveness in both calm and crisis

2. Knowing When to Ask for Help

The strongest and most successful people I have ever known are those who willingly ask for help and guidance. They understand their own boundaries and recognize the value of diverse skill sets in achieving ambitious goals. Rather than try to do it all alone, successful leaders build collaborative teams and seek input from advisors and colleagues.

This ability is strategic and wise — not a reflection of weakness or incompetence. It requires humility, self-awareness and trust in others. Mentoring future leaders to identify what skills they need, and who can provide them, enhances outcomes and strengthens the organization. Developing this instinct is also about teaching future leaders that leadership is not about ego, but rather about effectiveness. Great leaders know when to lead from the front and when to draw upon the expertise of others.

3. Leading Through Confidence, Compassion and Integrity Versus Eliciting Fear

This may seem obvious, but leadership deeply affects relationships. There is always an inherent imbalance of power and control in relationships such as parent/child, coach/athlete or boss/employee. Effective leaders recognize this imbalance and intentionally bring stability, predictability, consistency and empathy to the relationship.

Fear-based leadership — whether intentional or not — creates tension and erodes performance. Employees may be committed to pleasing leadership out of fear of retribution, leading to distraction, burnout and disengagement. The next generation must learn to lead by example, connect through empathy and inspire with integrity. These traits foster loyalty, innovation and sustainable performance.

The emotional intelligence to understand how power dynamics affect workplace behavior is essential. A compassionate leader is not a soft leader — but one who understands how to motivate through respect rather than fear, through relationship-building rather than hierarchy.

4. Communicating (Effectively and Sincerely)

Communication is foundational to leadership — yet many never learn how to do it well. Schools rarely teach it, and generational communication styles are often ineffective or dysfunctional. Aggressive, passive or passive-aggressive communication styles undermine trust and hinder progress.

Cultivating assertive communication in next-generation leaders is critical. Assertive communicators are impartial listeners who express themselves with clarity, respect and a sincere desire to connect with others. These qualities enhance workplace satisfaction, improve retention and promote a high-performance culture.

Moreover, communication is not just about talking — it’s about listening. Listening to understand, not just to respond. Listening for tone, silence, body language. Leadership communication involves building relationships, resolving conflict and creating psychological safety where every voice matters. Leaning on your company’s communication professionals or those who have exceptional writing and digital communication skills will serve you well.

5. Understanding and Building Healthy Team Dynamics

We often hear there is no “I” in team — but building a successful team requires more than good intentions. Effective leaders appreciate what it takes to foster collaboration, purpose and cohesion. The goal is to achieve flow: a state of performance where time seems to stand still, distractions fade and individuals perform at their peak.

Next-gen leaders must understand how each role and responsibility fits into the larger picture, ensuring every team member is aligned in purpose and function. They don’t need to be experts in team theory, but they must value it and support professionals who help integrate teamwork across departments. This builds trust, enhances results and strengthens the organizational culture.

Team building also requires leaders to see potential, to know how to place people in positions where they can succeed and to coach them through obstacles. Leaders who nurture team dynamics foster environments of learning, innovation and shared success.

6. Allowing Other Leaders to Lead

The success of many companies can be attributed to the passion and vision of their founders. These individuals have sacrificed deeply and built expertise that will be difficult to replicate. As a result, transferring leadership is emotionally complex.

However, founders and the next generation must recognize that moving forward may require different skill sets than those used to build the company. Effective successors are those who surround themselves with confident, capable leaders across disciplines. They support these leaders, trust their capabilities and allow them to execute.

Letting go is hard — but essential for growth. A legacy is sustained when leadership becomes a shared responsibility. It is an act of courage and faith to allow others to shine, to delegate authority and to build an ecosystem of leadership where the company does not rely on one person but thrives because of many.

7. Operationalizing Core Values into Daily Decisions

Even if owners have never stated them explicitly, every company operates with a set of core values. These values have shaped how the business serves clients, approaches decision-making and builds culture.

Next-gen leaders must learn what values were central to the company’s initial success. Whether they keep, revise or add to them, integrating these values into daily decision-making ensures consistency, cohesion and high performance. When values are actively lived, they build a culture that endures.

These core values become the moral compass of the organization — guiding behavior, informing policies and anchoring the company during times of change. Operationalizing values means putting them into practice in hiring, client service, budgeting and every other strategic decision.

8. Stepping Out of the Weeds and Thinking Strategically

Many leaders begin with a hands-on focus in their area of expertise. However, enduring success requires moving from operational leadership to strategic vision. It requires stepping back, trusting others and focusing on long-term growth.

Recognizing when to delegate and when to lead from a broader vantage point is essential. Sometimes this means building an advisory board or board of directors. At a minimum, next-gen leaders must understand the hat they’re wearing — tactical or strategic — and make decisions accordingly. This clarity of focus enables them to build a legacy that is resilient and future-ready.

Strategic leadership is about seeing the forest, not just the trees. It’s about identifying opportunities, scanning the competitive landscape and adapting with agility. It’s about knowing that vision without execution is merely a dream — but execution without vision leads nowhere.

Conclusion

What we know is that great leadership can be developed. While some individuals may have a natural aptitude, most grow into the role by observing, learning, practicing and effective mentoring. With guidance, insight and motivation, the next generation can surpass expectations.

Developing future leaders is not just a business necessity — it is a moral obligation and a powerful opportunity. With the right tools, the next generation can achieve remarkable outcomes and ensure the ongoing vitality of your privately held business.

More than a process, it is a legacy. And that legacy begins with intention, preparation and a willingness to invest in your leaders of tomorrow.

Contact Us

If you recognize you need help mentoring or developing these skills in your next generation, it might be time to take the next step forward. Surround yourself with advisors and professionals like those from our Center for Private Business Owners who have a deep understanding of your journey and how to help emerging leaders successfully transition.

For more information, please contact your PKF O’Connor Davies client service team or:

Cynthia Adams Harrison, Ed.D., LICSW
Managing Director
PKF O’Connor Davies Center for Private Business Owners
charrison@pkfod.com | 914.381.8900