Why the Rising Generation Needs Its Own Dreams

Why the Rising Generation Needs Its Own Dreams

The next generations needs aspirations and passions beyond the family business. For many families the company provides, income, employment, stability and connectedness, but leaves little room for an individual’s aspirations. David Harland – Managing Director FINH

Multigenerational family businesses start as the dream of the founder. The dream takes many parts: the freedom of self-employment; the financial security that comes from hard work; eventually, the joy and pride in bringing children into the business. However, Jay Hughes, one of the world’s leading experts on the preservation of family capital, suggests that the founder’s dream can become a “black hole” that sucks in and swallows the dreams and aspirations of everyone nearby. When spouses and children become stewards of the founder’s dream, it can be very easy to lose sight of what they, themselves, want out of life.

This lack of self-determination for members of the rising generation can diminish their interest in the business or build entitlement. When future generations don’t have the freedom to find their own way or make their own mark on the family’s legacy, they can become resentful and angry. One might ask: what else could they want besides financial security, a good job, and a prepared place in the world? Well, they might want a lot more.

Much of our work as family business advisors is taken up by the knotty problem of preserving our families’ intellectual, financial, human, and other capital so that it endures long after the founding generation has left the scene. Everything we do, whether it be instituting formal governance structures, developing succession plans, or bringing in sources of outside investment capital, is all done to ensure the safety, security, and long-term health of the family. We have found that one of the leading causes of failed generational transitions is the loss of a family’s human and social capital. Simply put, if the second or third generation of a family doesn’t buy into the dream, the family ceases to flourish.

Hughes makes a somewhat controversial proposition in his new book, The Voice of the Rising Generation: by helping the members of the rising generation find their own path in life, business leaders may risk pushing them away from the business. However, by prodding them – by action or inaction – into a place in the family business, they may be assuring future failure by leaving the firm in the hands of unprepared, unmotivated, resentful heirs who don’t want to be there.

Hughes uses the Odyssey to frame this epic issue. Odysseus’ son Telemachus languished at home for the decades his father was away, never allowed to grow to manhood and find his own dreams. Members of the rising generation must go on their own adventure to discover and bring to life their own dreams. Founders and current business leaders can help their potential successors define and create their own dreams. Here are some suggestions:

Keep the pressure off your family by allowing young members to choose their own career path. Support them in their endeavours outside the business and set expectations for those who want a place within the business. Research shows that one of the success markers of a multigenerational family business is that they require family members to gain experience outside the business. Encouraging young members of the family to seek experience outside the family business is also key. By gaining real-world experience outside the safety of the family fold, future leaders develop critical skills and build an identity for themselves that’s not completely associated with the family business. The business also gains by having qualified managers with industry experience at the helm.

Find mentors

Mentors play an important role in the development of the rising generation. Founders and current business leaders can be too wrapped up in business needs or their own hopes to be good candidates. Mentors, whether they be friends, colleagues, or other relatives can nurture that all-important human capital and offer potential heirs the wholehearted support they need to discover their own dreams.

Don’t be a tyrant

Future leaders want a say in the future of the business and it can be a struggle to balance your vision for the business with their expectations. If you find yourself frequently crossing swords with family members over strategic or operational issues, you may need a safe space in which to discuss your different visions. If you feel your successors aren’t ready to take leadership roles, set expectations for their future growth within the business.

In the end, much of what I’ve written here can be boiled down to two points:

  1. Ask your loved ones what they want and;
  2. be prepared to let go of your own dreams enough to encourage them to pursue theirs.

Want to discuss your family business confidentially? Contact FINH on 07 3229 7333

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