75% of the next generation have big plans for taking the business forward
In a family-owned business, the line between family and business often becomes blurred. As a result, discussions on family issues often need as much time and attention as pressing business ones and can require a third-party moderator to facilitate. Mutual success has to be built on a mutual foundation, and that means coming to a consensus on your family’s shared vision, values and purpose—who you are and what your business stands for.
Natural hierarchies tend to emerge in families, especially in a business setting, and these are often based on age and experience. But now that the next generation is being primed to take over, it’s more important than ever for the current generation to listen seriously to the goals and aspirations of their successors.
As the Baby Boomers prepare to retire, it’s tempting to focus on the short-term and medium-term future. If you’re a business owner handing over the reins to your successor, you’re probably more concerned with what’s happening next month than in the next five or ten years. But it’s your long-term strategic plans that will really help to anchor your family business and provide the clarity and assurance the next generation needs.
It’s great if a family business can transition seamlessly from the current gen to the next gen, but if only 5% of them are surviving to a fourth generation, it’s a clear sign that leaders aren’t thinking far enough ahead. When you’re planning, don’t stop at your successors. To the best of your ability, you should build a framework for how business continuity can be passed on for generations to come.
In Canada, 63% of family businesses have their next gens learning on the job. 48% of family businesses in Canada plan to pass on management and/or ownership to the next generation, but 27% of those have not involved the next generation in preparations for these changes.
If you’re a member of the current generation, you can help the next generation prepare for leadership by involving them in leadership decision-making and letting them manage lower-stakes projects where they can prove themselves and learn from their mistakes. It also helps to have properly demarcated roles, clarity around strategy and well-defined lines of reporting.
The most important task is to create a sense of family unity and a culture of trust and respect. Next Gens need to know that you and your colleagues are priming them to succeed. In Canada, 88% of next generation business leaders say they’re looking forward to leaving their unique stamp.
Stepping into a leadership role is an exciting milestone. But even if the company was built or bought by your predecessors, you still have to earn your place at the top. Here are a few tips as you gear up for your new role.