From the editor: Help your NextGens reach their potential
While business founders have the foresight and drive to take a good idea and turn it into a profitable enterprise, history abounds with stories of successors who took the original vision and grew it to market domination. Frank Perdue, a G2, turned Perdue Farms into a household name. J.W. (Bill) Marriott Jr., also a founder’s son, led Marriott International to worldwide growth as a publicly traded, family-controlled company.
Just as important, particularly in the third generation and beyond, are NextGen family leaders who unite a diverse group of cousins around their shared history and values, keeping the extended family invested in the business for the long term. These family leaders often don’t work in the business but are a driving force behind the scenes.
What can parents do to help their children develop as future leaders and stewards of the family or the business? Here are some suggestions:
- Give them the family business education they need. Even if they want careers outside the family company, they must become informed and engaged shareholders. Make sure they know how the family business makes money and the basics of the marketplace in which it operates. Teach them how to understand a balance sheet. Explain why fiscal responsibility is important. Begin with age-appropriate lessons when your kids are young so you don’t have to play catch-up (or unwind unhealthy habits) later.
- Listen to them and respect their views. Yes, you once changed their diapers, but that was a long time ago. As they become educated, take jobs outside the family firm and make friends who also come from business families, they’ll be exposed to new ideas that may help your enterprise.
- Help them get to know their cousins. They’re not just relatives; they’re also business partners (or will be partners in the future). The stronger the personal connections, the more likely they will want to stay together as investors.
- Show them there are multiple paths to leadership. As the family grows, there will be many roles to play. Someone whose career aspirations lie outside the family business might make an exceptional family director. Someone with solid organizational skills can be the chief organizer of the family reunion.
- Accept that they will do things differently. The successor generation should not be their parents’ clones. A business that has grown will need a different type of leader to manage its new challenges. In a later-generation family, decisions that were once made by an authoritarian patriarch or matriarch will have to be made democratically.
- Be transparent. Your unwillingness to share information about plans for CEO succession or how stock will be transferred will lead to confusion and, perhaps, conflict after you’re gone.
NextGens must have the freedom to choose their own paths. At the same time, they must be well informed about the legacy they will inherit. And they must feel empowered to transform the enterprise into one their generation can unite behind.