During the transition of family-owned businesses to the next generations, the issue of whether the upcoming generation should acquire experience outside the family company before coming on board becomes more relevant.
We asked our Global Family Business Think Tank Panel if they thought that it is important for the next generation to gain experience outside of the family business before embarking on a career within it.
Is It Important For The Next Gen To Gain Experience Outside Of The Family Firm?
Yes - 86%
No - 10%
Don't Know - 4%
Obtaining outside experience can prove to be a strategic decision for various reasons, influencing the future of family enterprises on a global scale. Again, our panel strongly believe that it is important for the next generation to gain experience outside of the family business before embarking on a career within it.
THE THOUGHTS OF OUR ‘THINK TANK’ REPRESENTATIVES:
“The competencies to be successful as a next generation member can be learned in multiple ways, not just working outside. Personally, I think that requiring the next generation to work outside without a precise plan of what the experience needs can be very negative for a family.”
Isabel Botero
George E. & Mary Lee Fischer Chair in Family Entrepreneurship, University of Louisville
“This is so important as gaining experience outside of the family firm helps them gain broader experience and networks and to grow outside of the family spotlight.”
Kedge Martin
CEO, KM Advisory
"This depends a bit on the type of business the family operates and what the aspirations of the family are. Some businesses will need to innovate their way of doing things substantially if they are to remain competitive in the digital age, and in many case the next gen may have to gather insight and experience themselves through outside experience. In other types of businesses it may not be as necessary and the next gen may actually learn more from building their experience and legitimacy by climbing the ranks within the family business.”
Jasper Brinkerink
Lecturer in Entrepreneurship & Innovation, University of Edinburgh
“Experience outside of the family business gives the next generation confidence. It allows them to bring new and fresh ideas to the table and ensures they receive respect from their colleagues.”
Kirsten Taylor-Martin
National Head of Family Business Consulting, Grant Thornton Australia
“I see many benefits that heirs can gain from working in non-family businesses early in their careers. They will learn to face challenges in a less protected environment, understand hierarchy, performance evaluation, career progression, self-knowledge and self-confidence.”
Rogerio Fae Rodrigues
Family Business Consultant, UNE Consultoria
“It is important for the business to know that the family member has credibility, just as it is for the family member to know that they have earned their credibility (elsewhere).”
Tom White
Chairman, Haws Corporation
“I think, these days, the importance of this can be overplayed. Today, there are many ways the next generation can accelerate their development, including accessing mentoring and/or joining virtual boards or collaborative organisations. These new ways can expose the next generation to experiences outside the family firm whilst simultaneously building their knowledge, relationships and credibility within the business.”
David Twiddle
Managing Partner, TWYD & Co
“Research shows that resilient family firms look outwards, always horizon scanning so it is vital that the next generation sees what is going on elsewhere, learns from it and then decides how to use it back at the family firm. Of course, that may be a challenge for the older generation!”
Rachel Mallett
Partner, Brown and Mallett Agriculture, PhD Student, Harper Adams University
“The research is literally 50/50 on this and one family’s best prescription is another family’s poison. It is more important to clarify entry and exit ramps for the family enterprise early than have one way to do this that may disincentivize individuality. An unintended consequence of outside employment is that the next generation may not come back to the family’s ‘unsexy’ business.”
Natalie McVeigh
Managing Director, Eisner Amper
“First for me, the key to success is success as a family to become a generative family or a family of affinity and how can that happen if the rising generation don’t have the opportunity to individuate and go on their own hero’s journey? The same applies to working in the family office – go and work somewhere else first. The human capital is more important than the financial capital. If you have someone who has only ever worked in the family business then there is too high a risk that such a person cannot accept their own vulnerabilities, can’t accept their own shortcomings and shadow, and can’t grow as a person.”
Christian Stewart
Independent Family Advisor, Family Legacy Asia
"Gaining experience outside the business before embarking on a career within it can provide priceless perspective, new ideas, feedback and opportunities to learn whilst not being under the proverbial ‘microscope’ in the family business.”
Nick Di Loreto
Partner, BanyanGlobal
These results were part of the 2024 Global Family Business Think Tank Report that was published in Autumn 2024.
A copy of the final report is available to download below and is free to Family Business United members and digital subscribers (simply log in to access). If you are not yet a member or digital subscriber and wish to obtain access to the report, you can find out more about becoming a member of Family Business United here or take out a digital subscription to access all areas and content available on the platform including this report here
Download the Global Family Business Think Tank Report, Autumn 2024 here
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