By Sian Steele
Here are five key things the current generation managing a family enterprise can do to make sure the next generation has the best chance to succeed:
1. Plan ahead
The single most important success factor for succession is a good plan. That starts with detailed career and development planning for the next generation, so they can get a wide range of experiences and acquire the right skills. If possible, find ways for them to work outside your home market, as well as outside the family firm. This will help build their credibility if they do eventually decide to come back to the family business.
2. Make it an opportunity, not a burden
Many of the next generation are excited about the chance to work in the family firm and take it over one day. But make sure they don’t feel expectation as a burden, and have the chance to make a free choice about their own future.
3. Give them a chance to build something of their own.
54 percent of respondents to PriceWaterhouseCooper’s 2016 Family Business Survey talked about the possibility of setting up new entrepreneurial ventures to run alongside the main firm, and 47 percent of those questioned in the firm’s Great Expectations survey of next-generation members said they would like to do this. New entrepreneurial ventures can be a wonderful way to give the next generation their own area of responsibility, where they can learn, explore new ideas, and gain vital skills. And who knows – those new ventures could evolve into the future for your firm.
4. Understand where and when to let go
Almost all next-generation members (91 percent in our research) say they would welcome continued support from their parents when they take over, and many talk with feeling about the mentoring they’ve received, and the lessons they’ve learned. But there’s a fine balance between being there to help, and never letting go. It’s an understandable wrench to step back from a business you’ve run, and in many cases, built – 61 percent of next-generation members in the Great Expectations survey acknowledge this as a challenge in their own family. So spend time discussing the exact shape of your future role, and find yourself something else to do beyond the business, so you won’t constantly be tempted to “just show up.”
5. Address family governance
One positive role the current generation can play is in relation family governance. We all know how dangerous conflicts and misunderstandings can be in family firms, and 52 percent of next-generation members we surveyed said they were worried about the prospect of dealing with “family politics.” Members of the older generation are ideally placed to help manage this, both through their experience and the ‘gravitas’ of age. So if your family firm hasn’t yet come to grips with family governance, or could benefit from a proper family constitution or family council, perhaps you can take on that task yourself, so the next generation can concentrate on taking on the business.
Sian Steele is a Family Business Leader with PriceWaterhouseCooper in London. This is an excerpt from PwC’s Family Business Survey 2016 report, available at www.pwc.com/fambizsurvey2016.