Next Generation In A Family Business Matters

When it comes to the next generation in a family business there are plenty of challenges, often from day one as they are born into a business that is part of their family. All too often we hear stories from next generation members that life growing up was ‘different’ to their peers who had parents that worked in jobs and despite conversations about work taking place at home, they were not omnipresent.

Some next gens see the lifestyle as a positive as the family firm has been part of their own DNA from the start, others find it hard to understand and fall out of love with the family firm as a result, often pursuing careers outside of the family firm. Some find the prospect of following in the footsteps of those before them an intimidating one.

For some next gen, joining the family firm is part of their destiny, something they want to do, and whether they join direct from school or university, or pursue a career outside of the family firm first before joining, the day ultimately comes when they join and have to deal with all that this entails.

Research from The Quest for Legitimacy, led by Dr. Jamie Weiner has found that the experience of growing up in a prominent family, irrespective of whether the decision is to join the family business or not, can be an isolating one.

As a next gen joining the family firm, possibly with the family name included in the business name, there can be an element of imposter syndrome right from the start:

• Am I worthy of a role in the family business?

• How do I live up to the achievements of my ancestors?

• What do the rest of the family really think about me in the family business?

• Did I get a role simply because of who I am?

• Do I have the right skills to actually do the job?

• How do I manage my role in the business and the fact that I am a family member?

There are plenty of challenges on day one and for many, ongoing challenges as a next generation family member as they grow further into the role. Whilst it is difficult to generalise, each individual seeks legitimacy, respect and appreciation for what they do along the way.

• How do I become the best at the role?

• What skills do I need to learn?

• How do I take on management and leadership roles?

• How do I become a good ambassador for the family firm?

• Am I a contender to lead the business in the future?

• How do I become a responsible shareholder?

• How do I make my own unique contribution to the world?

There are plenty of opportunities to upskill and learn the qualities that are needed to fulfil roles in the family firm but for the next generation it is not always easy. For many, they want to get on with the job and earn the respect of the team by doing the job well, some may want to progress to the top but others may well be happy with a career in the family firm without becoming the leader.

What is apparent however is the need for family to talk, to share the needs of the business, personal plans and desires and to be able to fit individual aspirations within the bigger picture of the family business, where it is today and where it is going, and the roles available now and in the future.

Russ Haworth, Co-Director of The Quest for Legitimacy says, “In addition to the typical conversations around preparing the next generation, recognition is also needed of the importance for them to be able to develop their own sense of self, their own agency and the ability to add their own unique contribution to the world, irrespective of whether this is within or outside of the family business.”

Conversations enable any pre-conceived assumptions to be put aside, people can be honest about their intentions and what they are looking for from their career, and the business decisions that need to be made around leadership and future leadership can be explored more openly too.

Often, the next generation remain silent on key issues out of respect for their elders but this can ultimately cause problems and all family firms are encouraged to have a framework and structure that enables conversations to be held, on a family level, a business level and a family business level.

Down the line, there may well be a leadership succession to a family member and conversations and planning enable a greater chance of success. Honest conversations again become important as the older generation need to stand down effectively, recognising when the time is right to do so, possibly into an ambassadorial role and to leave the next generation to make their mark.

Good governance also helps to produce the framework to enable the next generation to know what they are doing, what is expected of them and to provide support in their new role.

Russ adds that “acknowledging that we are all on our own quest for legitimacy will also play a valuable role in successful transitions, this includes the senior generation.”

Being the next generation in a successful family business can be a challenge and it is important that measures are sought to offer input and support – peer groups, networks and learning forums are a great place to start to ensure that the often quoted ‘it is lonely at the top’ does not become incumbent on the next generation too.

Dr Weiner has been researching the experience of growing up in a prominent family for five years and the research has uncovered that there is path we follow in attaining legitimacy and agency, this has been captured in his new book, The Quest for Legitimacy; How Children from Prominent Families Discover Their Unique Place in the World.

This uses stories from the lived experiences of those that have navigated the path to highlight the four, non-linear phases of The Quest and the importance of not just focussing on how to prepare the next gen for a role in the business, but broadening this conversation.

There are plenty of multi-generational family firms that have successfully passed down to the next generation which shows that it can be done, but it is not always easy and time and effort needs to be spent creating the right environment, support mechanisms, roles and responsibilities to make it as easy as it can be.

Nobody ever said it was going to be easy, but there are ways to help smooth the journey too. Being a next generation family member is a journey, for some a rite of passage from birth, but there are also some key milestones (or memories too):

• The first day in the office

• The first management role

• The first board meeting

• The first family council meeting

• The first day as the CEO

The good news is that plenty of fellow next generation family members are open and willing to share their insights and the more collaboration and conversation, the more myths that can be ‘de-bunked’ and more resources and tools created to help future next generation members on their journey too.

As a next generation family member, family is there whatever, but the challenge remains, gaining respect for what you do as a family member and becoming the best possible version of yourself in the business too.

This starts with an internal feeling of legitimacy and the process for attaining this can help you to explore and answer one important question, is a role in the family business really for me?