This Houston tech leader explains the challenges and opportunities that succession planning includes. Photo via Getty Images

Family-owned businesses have unique challenges when it comes to succession. The biggest obstacle is that family members leading the organizations think they know their own children or heirs’ capabilities better than they actually do. The current slate of executives can see the most obvious strengths to some degree, but they often miss the entirety of each family member’s gifts. They may also fail to see what work gives each heir the most passion and job fulfillment.

The second challenge is the emotional connection to family members, which can make hiring or promoting decisions stressful. This can also lead to difficulty with honesty when it comes to family members. On the other hand, some business owners are too tough on the next generation taking over. In either case, finding the right balance between effective work relationships and objective decision-making can be difficult. Then there is the challenge of openness, willingness and objectivity to make the tough calls. One example of this is if the internal family talent has gaps, the executives need to be willing to recruit or promote key talent to fill the gaps to be the most effective team. When a family-owned business refuses this, this can be detrimental and create a problematic future. Like it or not, while family businesses can be exceptionally rewarding, they are still businesses at their core and must adapt effectively to be competitive or to survive future challenges.

Lastly, there is a competitive factor when it comes to succession in family-owned businesses. Most family members that are engaged in the business and in a leadership capacity tend to be highly competitive by nature. Adding to the sibling rivalry that they have faced throughout their life. So, with succession, how does the family keep these competitive forces in check while being aligned in a positive way?

The best way to overcome these challenges is to understand each person's leadership character traits and risks for ineffective behaviors or derailment. Additionally, learning about someone’s drivers, reward needs, or intrinsic motivation can help paint the big picture. When using these objective measures, the family leadership team can get an accurate reading of the talent of each family member as well as get a clear look at the leadership bench strength. There are validated assessment tools that can help business owners understand these characteristics such as in-depth character, risk and motivational measures geared toward leadership development, training and executive coaching.

For example, Jennifer was the CEO of a large residential and commercial real estate company. She was exemplary in the business, built strong relationships and was a go-getter in sales and marketing. Throughout her tenure, she hired top talent and had a natural executive presence. Her husband, George, was the CFO who had the typical high level, brilliant financial smarts and measured everything to the nth degree. Their family-owned business soared to become number one in the region competing with national franchises. As time went on, they planned to transition the business to their two sons. They saw John, one of their sons, as the heir for the CEO position because he excelled in fostering relationships and operations. Therefore, they also assumed he would just pick up on the marketing and sales that Jennifer was great at. This left the other son, Ray, as the new CFO because he was financially brilliant.

However, what Jennifer and George missed was that there were holes and gaps in each of the sons’ skill sets that didn’t quite align with the positions they were to succeed. With a thorough assessment through the CDR 3-D Suite and individual coaching and discussions, the mismatch became evident In fact, one of the sons said he would leave the company if forced to do the parent’s job role. The other son had similar comments. After investing in these helpful tools they re-created the executive roles to “fit” the sons’ profiles and needs. This required adding another key executive to lead marketing and sales for John since he excelled in operations leadership, financial management and relationship building. Ray took on some financial responsibilities but his primary role was business development. He focused on big ideas and business growth. A deep dive into his characteristics and drivers demonstrated how If he were to work with numbers routinely, he would be miserable which in turn would affect the business as a whole.

The lesson learned is that executives cannot necessarily force their children or family into the same boxes or job descriptions they have held. Sometimes, there needs to be a shift or redesign of the job description and scope of responsibility to best fit the incoming executives. The next generation will share some of the same strengths, but will also have different skills and weaknesses. Many will likely be motivated by different aspects of the work and if business owners are not able to identify these inherent capabilities and needs, succession can be unsuccessful.

In terms of conflict or tippy-toeing around difficult conversations, using data can help family-owned business executives and their family members get a clear and objective understanding of their respective talents and needs. The initial work goes a long way and keeps discussions productive and on track. Good data supports productive decisions so that everyone is in a win-win position. When approaching succession this way, generations will be placed in roles that best fit their personality and what they want to be doing. Without this type of data, it is easy to misalign roles which causes problematic performance and conflict and fosters a stressful work environment. When leaders are stressed, inherent risk factor behaviors manifest regularly, which damages performance and relationships. Bottom line, identifying these characteristics before planning succession and using objective assessments provide the data and the blueprint for family-owned businesses to design successful executive teams.

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Nancy Parsons is the president and CEO at CDR Companies.

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Houston robotics co. unveils new robot that can handle extreme temperatures

Hot New Robot

Houston- and Boston-based Square Robot Inc.'s newest tank inspection robot is commercially available and certified to operate at extreme temperatures.

The new robot, known as the SR-3HT, can operate from 14°F to 131°F, representing a broader temperature range than previous models in the company's portfolio. According to the company, its previous temperature range reached 32°F to 104°F.

The new robot has received the NEC/CEC Class I Division 2 (C1D2) certification from FM Approvals, allowing it to operate safely in hazardous locations and to perform on-stream inspections of aboveground storage tanks containing products stored at elevated temperatures.

“Our engineering team developed the SR-3HT in response to significant client demand in both the U.S. and international markets. We frequently encounter higher temperatures due to both elevated process temperatures and high ambient temperatures, especially in the hotter regions of the world, such as the Middle East," David Lamont, CEO of Square Robot, said in a news release. "The SR-3HT employs both active and passive cooling technology, greatly expanding our operating envelope. A great job done (again) by our engineers delivering world-leading technology in record time.”

The company's SR-3 submersible robot and Side Launcher received certifications earlier this year. They became commercially available in 2023, after completing initial milestone testing in partnership with ExxonMobil, according to Square Robot.

The company closed a $13 million series B round in December, which it said it would put toward international expansion in Europe and the Middle East.

Square Robot launched its Houston office in 2019. Its autonomous, submersible robots are used for storage tank inspections and eliminate the need for humans to enter dangerous and toxic environments.

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This article originally appeared on EnergyCapitalHTX.com.

Houston's Ion District to expand with new research and tech space, The Arc

coming soon

Houston's Ion District is set to expand with the addition of a nearly 200,000-square-foot research and technology facility, The Arc at the Ion District.

Rice Real Estate Company and Lincoln Property Company are expected to break ground on the state-of-the-art facility in Q2 2026 with a completion target set for Q1 2028, according to a news release.

Rice University, the new facility's lead tenant, will occupy almost 30,000 square feet of office and lab space in The Arc, which will share a plaza with the Ion and is intended to "extend the district’s success as a hub for innovative ideas and collaboration." Rice research at The Arc will focus on energy, artificial intelligence, data science, robotics and computational engineering, according to the release.

“The Arc will offer Rice the opportunity to deepen its commitment to fostering world-changing innovation by bringing our leading minds and breakthrough discoveries into direct engagement with Houston’s thriving entrepreneurial ecosystem,” Rice President Reginald DesRoches said in the release. “Working side by side with industry experts and actual end users at the Ion District uniquely positions our faculty and students to form partnerships and collaborations that might not be possible elsewhere.”

Developers of the project are targeting LEED Gold certification by incorporating smart building automation and energy-saving features into The Arc's design. Tenants will have the opportunity to lease flexible floor plans ranging from 28,000 to 31,000 square feet with 15-foot-high ceilings. The property will also feature a gym, an amenity lounge, conference and meeting spaces, outdoor plazas, underground parking and on-site retail and dining.

Preleasing has begun for organizations interested in joining Rice in the building.

“The Arc at the Ion District will be more than a building—it will be a catalyst for the partnerships, innovations and discoveries that will define Houston’s future in science and technology,” Ken Jett, president of Rice Real Estate Company, added in the release. “By expanding our urban innovation ecosystem, The Arc will attract leading organizations and talent to Houston, further strengthening our city’s position as a hub for scientific and entrepreneurial progress.”

Intel Corp. and Rice University sign research access agreement

innovation access

Rice University’s Office of Technology Transfer has signed a subscription agreement with California-based Intel Corp., giving the global company access to Rice’s research portfolio and the opportunity to license select patented innovations.

“By partnering with Intel, we are creating opportunities for our research to make a tangible impact in the technology sector,” Patricia Stepp, assistant vice president for technology transfer, said in a news release.

Intel will pay Rice an annual subscription fee to secure the option to evaluate specified Rice-patented technologies, according to the agreement. If Intel chooses to exercise its option rights, it can obtain a license for each selected technology at a fee.

Rice has been a hub for innovation and technology with initiatives like the Rice Biotech Launch Pad, an accelerator focused on expediting the translation of the university’s health and medical technology; RBL LLC, a biotech venture studio in the Texas Medical Center’s Helix Park dedicated to commercializing lifesaving medical technologies from the Launch Pad; and Rice Nexus, an AI-focused "innovation factory" at the Ion.

The university has also inked partnerships with other tech giants in recent months. Rice's OpenStax, a provider of affordable instructional technologies and one of the world’s largest publishers of open educational resources, partnered with Microsoft this summer. Google Public Sector has also teamed up with Rice to launch the Rice AI Venture Accelerator, or RAVA.

“This agreement exemplifies Rice University’s dedication to fostering innovation and accelerating the commercialization of groundbreaking research,” Stepp added in the news release.