Family-owned businesses are employers of millions of individuals globally, generators of sizable streams of tax revenue, and financial and social anchors for many communities.
Families seeking ownership continuity find ways of engaging the emerging generation who are often very busy with getting an education, new jobs and living a full life. Experience shows that there are various exciting and effective ways that families engage their rising generations.
A few suggested ways of engaging the next gen family members are as follows with no hard or fast rules:
- Direct Engagement in the Family Business – Summer Jobs and Internships
- Enterprising families often encourage secondary school aged family members to work summer jobs in the family business to gain a general understanding about the business.
Another learning-focused work opportunity is where family members learn about various parts of the family business by shadowing one or more executives. These experiences are time-limited and generally culminate with the young shadower providing feedback to the owner or family on what was learned and whether they would be interested in pursuing a career in the firm.
Structured, Activity-Based Education
When a family business has a large number of rising generation family members, they may create specific learning activities designed to expose the next generation to the business and simultaneously build their teamwork. Both family and non-family executives can provide support for this kind of activity. We have seen a number of different approaches to this, including:
- Dissect the vetting of a new business opportunity or investment.
- Develop a marketing or social media plan for a product or service now provided by the company
- Conduct a key competitor analysis and make a presentation to the executive team or a shareholder group.
- Create a set of scenarios for how the business will look 20 years from now.
General Business Exposure
We know of family businesses where the senior generation realizes that it is important for the rising generation group to begin working on teamwork, long before they become active shareholders. A few interesting approaches include but are not limited to:
- Start a next generation investment club with seeded money, overseen by those interested in the concept. The goal here is to learn about investing, and the club will need rules so teamwork results from working through the rules of the game and ongoing investment review and decision making;
- Create a limited investment pool that next generation family members can tap into for new business creation. This would require significant clarification of rules for application, methods of review and oversight, accountabilities, and defined relationship between funder and receivers.
We often hear elder family business leaders express concern that their children or grandchildren do not understand the importance of the family enterprise to the family or society at large. They wish everyone had greater passion for the enterprise and all it takes to make it more successful. In truth, you cannot love something that you do not know well. We hope that some of the above ideas will help your family business and the new generation achieve the right motivation and passion for the family business, thus further guaranteeing its continuation and success.
( *All Statistical information presented in this blog has been obtained from an extract of an article from the Family Business Consulting Group based in Chicago)
At the Family Business Office we can offer you assistance in dealing with family business issues through incentives supporting advisory and mediation services. Contact us today on [email protected] or visit our website at https://www.familybusiness.org.mt/ for further information.