1. Communicate on key issues
A panel discussion at the event focused on some of the challenges the next generation of family business leaders face. One issue was how the desire to introduce new ways of working could meet resistance from previous generations.
One next generation business leader shared how she tried to introduce a new identity to the growing business and acknowledged it could be a struggle, especially if the generation above have strong identities. Trying to forge a new way of working and leadership style can be hard across generations and requires good communication.
Reflecting on how the transition to a new generation can sometimes bring pressure for change, Catherine van Weenen said: “When the next generation takes over it’s a real moment of truth in the lifecycle of a family business.”
2. Focus on culture, values, and employee fit to manage change
The desire for change may be driven by the need for the next generation of leaders to impose their own identity on the business, but this is within the context of what are usually very strong cultures. All panellists agreed that family ownership creates a stronger sense of identity.
One family business leader described how a general understanding of direction and shared vision could be a real benefit. You might disagree along the way, she said, but your culture is still likely very strong. The challenge then is finding talent that’s the right fit for your culture.
3. Consider whether external support could add value
One of FBUK’s “Ones to Watch” described the value of external mentors. Catherine shared how mentoring can sometimes empower a leader to push themselves and excel in a range of areas. “An external mentor can help you to think differently and introduce new ideas. As leaders seek to evolve the business strategy and the next generation come in, the importance of a mentor can't be overstated.
“They can also help family businesses be more resilient at a time when there are continued market disruptions. When the next generation is evolving strategy that requires them to deliver change the whole family needs to buy into, it’s a challenge. The support of a mentor can be invaluable. Family businesses often have a unique set of challenges, in terms of how you place the needs of the family alongside the needs and interests of other key stakeholders. Again, mentoring and peer-to-peer support can be invaluable to guide the next generation through those changes.”
4. Revisit your governance guidelines
There are numerous ownership options open to family businesses. The most obvious and preferrable is succession, but this isn’t always appropriate or beneficial. As the business grows, and as some family members choose not to be involved in the day-to-day running of the business, there could be opportunity and value in bringing in experienced non-family executives to lead the management of the business.
There are more ownership options than you think – consider consulting a specialist to explore the possibilities. If the next generation doesn’t want to participate or doesn’t have the right skill set, it may be advantageous to bring in a non-family member who can import new skills and insights that the family might not have.
5. Legacy is important even before taking on the responsibility of leadership
When FBUK CEO Neil Davy introduced the six future leaders singled out by FBUK as “Ones to Watch”, he said one remarkable factor connecting them all was legacy, and what they might one day pass on to their descendants.
“Even though we're talking about future leaders, what comes through our six ‘Ones to Watch’ is an incredibly strong sense of responsibility towards the generation that will one day come after them, and who may not even be born yet. They see themselves as stewards and custodians of the business that they will one day pass on to others to inherit or lead.”
Catherine agreed: “We see a real opportunity for the next generation of leaders and family businesses to continue to grow and continue to play a huge part in driving the UK economy forward for the long-term.”
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