Spaces for Future Leaders: 3 Keys to Next Generation Engagement
12th January 2017
Family businesses, with their intrinsic values, long-term outlook and commitment to people and communities are natural champions of long-lasting legacy, both within and outside the family firm.
Family business owners naturally look to the future. Their greatest aim is to pass on to future generations a stronger business than they inherited. This is why they are often referred to as stewards of responsible capitalism.
Why engaging the next generation?
One of the most important premises for family business success across generations is knowing when and how to engage younger family members.
But involving the next generation can be challenging because, as the saying goes, no two families are the same. Family structures are deeply entwined with business ones and managing both aspects, aligning the needs of the family and the firm, is no easy task.
Whilst there is no universal golden rule on how to successfully engage the next generation, there are some important practices that can help family firms in involving young family members, so that they can become committed, educated and responsible owners. These practices emerged from a recent study by the IFB Research Foundation, which sheds new light into next generation engagement in UK family business.
Spaces to learn
Many next generation members express the need to be provided with spaces to learn, develop and form plans for the future. Ultimately, learning space needs to provide time and opportunities for next gens to mature and develop a path at their own pace.
Whilst your children may want to learn about the business, time away can be beneficial for them to pursue their own interests. Some families refer to it as ‘breathing space’, a time for next gens to think about what their involvement might mean, whilst being free from family expectations.
This space is key to ensure that when engagement happens, it is in the right way and at the right time, to the benefit of the individuals involved and the business itself.
Spaces to develop responsible owners
Next gens care about the family firm and they often feel a responsibility towards it. However, research revealed that many families tend to overlook ownership education, focusing mainly on the managerial aspects of succession.
Knowledge and understanding of governance structures and ownership responsibilities, alongside business management, is crucial to ensure next generation involvement and, subsequently, a smoother succession.
On top of space to learn about technical aspects of the business, next gens must be given the opportunity to have open and honest conversations about their thoughts, uncertainties and potential changes of plans. This requires a certain level of flexibility on the current generation’s part.
Spaces for ideas
Next gens have a lot of creative ideas which, if given space, can positively contribute to innovation. Box: As a next gen, how important are the reasons for engaging?
However, new data highlighted a discrepancy between next and current generation, with younger members feeling they contribute ideas and contacts to a far greater extent than it is often perceived by the current generation.
If ignored, contributions from the next generation can lead to frustration and disengagement, which is detrimental for the future of the business.
On the other hand, giving space to the entrepreneurial spirit of the youngest can stimulate their interest and involvement in the business, as well as the performance of the firm itself.
These and many more findings, available in the report, provide important insights that can help families in the difficult process of engaging their next generations.
On a final and reassuring note, and contrary to widely held perceptions, 89.2% next gens revealed that they want to learn and engage because they care about the family business. This is very encouraging for the future of family businesses.
If you would like to know more about next generation engagement, contact us at firstname.lastname@example.org.