Succession planning is a key challenge for many family firms and as such the next generation may have a key role to play in this next stage in the evolution of the family firm. Take a look at my latest article that I wrote for PwC that looks at some of the things that the next generation in a family business should consider as they contemplate a career in the family firm.
1. Get outside experience first
These days, it is less expected that next gens will go straight into the family business after school, like many of their parents did. The older generation are actively encouraging them to get outside experience first, and I think that’s a very good idea. It means you can make a more informed decision before joining and then come to the family firm with valuable skills. It will help manage the assumption that you’re only there because of your family name.
2. ‘Try before you buy’
When you’re at university, and in your first jobs, try to keep your links with the family business. Keep in the loop about how it’s developing, and the trends and issues it’s dealing with. Gain experience in the holidays. Find ways to ‘connect without committing’ – in other words, get some experience of what it’s like to work there, the culture, and the sort of role you might aspire to eventually. Internships in college vacations are a great example.
3. Only take a role you’re suited for
The last thing a next gen needs is any suggestion that it’s ‘jobs for the boys’ (or girls, for that matter). Make sure there’s a transparent recruitment process, and a clear job to fulfil. And the role should always be something the business needs, not something dreamed up just to get you involved. Make sure your role is clear from the start and is well understood in the business.
4. Be aware of your own behaviour
You need to understand that you’ll be under scrutiny from your fellow employees – it may not be fair, but it’s a fact, and you’ll just have to manage it. For example, they won’t invite you for a drink if they want to moan about the boss, and some will try to befriend you purely for their own ends. And it’s tough juggling all those different hats – employee, owner, heir apparent. So be aware of how people perceive you but, don’t let it hold you back. Develop your own ‘brand’ and work ethic.
5. Don’t put pressure on yourself
Just because you’re a family member it doesn’t mean you have to progress to the top and make it onto the board, any more than if you were working in another type of business. Ambition is great, but the bigger and more complex the business gets, the more challenging this aspiration can become. Don’t let the family name create unrealistic expectations (either yours or anyone else’s).
6. Insist on a proper appraisal
Too many next gens I’ve worked with have never had a proper appraisal in their family firm, though arguably there’s even more need for it in their case. How can you grow and develop if you don’t receive honest, balanced feedback? I’ve seen many family bosses who give their children mainly negative criticism – either out of fear of favouritism, or because they assume they already know the positive things, when in fact they’ve never actually articulated them.
7. Handle change with care
Some of the next gens I’ve worked with just want to emulate their parents; others aspire to make big changes. But if you’re in the latter camp, you’ll need to manage that sensitively. Family firms pride themselves on their quick decision-making, but there will be personal factors in play if you want to change something your parents spent their lives building. Even relatively small changes – like bringing in new systems – need to be approached with tact, and a strong business case. Different generations often have very different risk profiles depending on the stage of their careers and their lives and this often causes a lot of tension.
8. Communicate, communicate, communicate
Obvious, I know, but the challenges of balancing the personal and the professional make it even more important to be able to talk openly and honestly about business issues. Succession is the most obvious one – many of the older generation just don’t want to think about this, either because they’re not ready to let go, or because it entails making choices between their children. But these issues need debating and they need planning for, and the longer you leave it, the harder it will become.
9. Make sure succession is a process, not an event
Succession needs to be planned a long time ahead. That gives you, your family and the rest of the business time to adjust and prepare for the transition. It’s an important period where you can make sure you have the skills you need, and plug any gaps with a proper development programme.
10. Enjoy it!
If the conditions are right, working in your own family business can be the most amazing opportunity. You can be part of something you really care about, become a guardian of it, and perhaps, one day pass it on to your own kids. It doesn’t get much better than that.