Family enterprises of all sizes are facing new challenges and opportunities in leveraging the strengths of the incoming generation.Creating strong next-gen teams is a highly worthwhile investment of time and energy to support the continuity of both the family and business.  The investment of time in planning and budgeting of resources for shareholder development can produce significant returns in unity and harmony for future generations.

Long-lasting relationships are vital to the success of any multigenerational family business. It is important for the next generation of leadership to know each other, not just as business partners or coworkers, but also as family members. Appreciating the unique challenges of multi-generational families is vital in harnessing future opportunities.

Some of the most common factors that influence next-gen team building are:

• Differing world and cultural views defined by each generation that influence the family dynamics and relationships.
• Families that are divided into branches focusing on differences versus the concept of “one-family” centered on the things they share in common.
• A spread of ages within one generation. Often generational cohorts are not as homogenous as we may treat them and can have decades of difference in ages in just one generation.
• Varied levels of wealth according to work history, career choices, ownership stakes, and family branch history.
• A sense of dedication to responsible stewardship of the family enterprise(s). This may manifest itself in meeting attendance, participation, and overall engagement.

A fundamental way of building relationships is by having some element of vulnerability amongst the group. Vulnerability means the capability to be honest, forthright, and emotionally available in the relationship.

Some ways to safely open family members include sharing “learning by failure” stories, things in your life that you regret, and gratitude letters in which family members share what they appreciate about one another.

In a family business , trust is a shared assurance of the team members’ individual abilities, strengths and reliability. It is a vital component of family businesses and is both a precursor and result of next-gen team building.

People build relationships through shared experiences. This is true for profound experiences that bring families together, and through continuous smaller interactions that produce familiarity. These activities can be fun, meaningful, and educational like going bowling together, creative problem solving, personality testing, challenge exercises. Initiatives that are challenging and require problem-solving such as the popular escape rooms have also produced great experiences for family businesses.

 

Familiarity

Familiarity is based on shared experience and the aspects that people have in common. As families grow and spread out geographically, building a sense of familiarity and comfort around one another becomes even more important. Familiarity in this context helps people understand the multiple roles and perspectives of being family members, owners and managers. Check-ins such as: “What is new in your life since the last time we met?” or fun games such as Two Truths and a Lie can help more distant family members build familiarity.

Education

For a group of next-generation leaders to be successful as a team, there needs to be a fundamental level of family business knowledge and education. To build this foundation, there must be an understanding around several subjects to productively participate in an ownership group including:

• Family and business history
• Business 101 covering basic financial and business skill sets such as reading a balance sheet
• Skills in decision making, communication and conflict resolution
• Understanding the family’s governance structure (family constitution, code of conduct, employment policy)
• What it means to be a family business owner including responsibilities and expectations

In our client work, we have found the most successful of family businesses find a way to incorporate family business-based education and learning specific and appropriate for each generation. This can spark teambuilding within each age group.

Bringing It All Together

We should note that these elements operate in a circular, iterative fashion. Each must be included and work in conjunction to build a successful team of next-generation leaders. When families invest in these elements, we see them building on one another in a positive cycle.

 

 

(All factual and statistical information presented in this blog has been obtained from an extract of an article from the familybusiness.org ) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt

At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on familybusinessact@gov.mt.