Most studies that investigate sustainability across the wine industry and related support industries focus on the “triple-bottom-line.” None directly consider company succession planning as a sustainability driver. What skills will leaders of successive generations need? Two qualitative field research methodologies are used for this investigation: (1) content analyses of published wine business case studies and (2) focus groups with wine business leaders. Leaders continuously develop skills and capabilities. Transactional and transformational leadership converges when it came to leading the business: (1) supporting the next generation, (2) emotional intelligence, (3) industry knowledge, and (4) active listening, also known as superior communication skills. A 2x2 matrix modeling optimal vs. sub-optimal leadership styles, propositions for further research, case vignettes, and implications for practitioners are presented.
TopIntroduction
Many successful entrepreneurs build businesses to sufficiently scale towards an exit, e.g., via a sale to another company, a private equity or venture capital firm, or initial public offering. Others build their businesses to stand the test of time, that is, to be sustainable throughout the generations that will follow. In both instances, what entrepreneurs have in common is to “begin with the end in mind,” that is, determine which outcome constitute success. Most recent studies that investigate sustainability across the wine industry and related support industries focus on the “triple-bottom-line,” that is, people, planet, and profits, while none directly consider company succession planning as a sustainability driver (Golicic et al., 2015).
Winery owners, managers, and winemakers that came of age in the 1970s are retiring in the third decade of the 21st century. How a family can sustain ownership is more relevant than ever. Anywhere on the planet where family farming is a major contributor to economic and social well-being, the future of that region will be contingent upon planning for an inter-generational transfer to the next of kin (Andrews, 2019). Sonoma County Winegrowers in Northern California, according to its executive director, Karissa Kruse, is promoting sustainability to its membership in terms of labor practices, land stewardship, and planning for future generations (Andrews, 2019). With respect to planning for future generations, the need is great while awareness lags: in Rob McMillan’s State of the US Wine Industry 2022 report, the words “success” or “successful” or “succeeded” appear 24 times, but the word “succession” does not appear.
Research Questions
Is leadership part and parcel of any sustainability strategy, or in other words, is leadership succession potentially the “fourth bottom line”? If so, what skills do leaders of successive generations need once the Baby Boom generation (born from 1945-1964) retires? Should leadership training be incorporated into the succession planning process?
Prior Research
Leadership is ultimately rooted in the ability of a leader to think critically, instill such practices in others, and engage an entire organization in strategy-making and innovative behaviors (Wilkins & Carolin, 2013, p. 257). Transactional leadership is characterized by contingent reward and management-by-exception. Transformational leadership, on the other hand, is characterized by idealized influence, inspirational motivation, intellectual stimulation, and individual consideration.
Transactional leaders exchange tangible rewards for the work and loyalty of followers, whereas transformational leaders engage with followers, focus on high order intrinsic needs, and raise consciousness about the significance of specific outcomes, not to mention propose new ways in which those outcomes might be achieved (Mokhber et al., 2015). Taken together, transformational, and transactional leadership styles are positively correlated to innovations that can sustain an organization over time (Sethibe & Stehyn, 2017).