By Charlotte Lamp
Picture yourself as a child on the Fourth of July, holding an unlit sparkler with great anticipation. Once lit, the sparks flew everywhere and all too quickly died out. That is, they died out until you figured out that you could keep the sparks flying by lighting another stick before the first one died, and then another and another. Creating sustainable sparklers became a game of collaboration with siblings, cousins and friends.
Similarly, sustainable family businesses require sustainable families. Such families work to ensure that all the family owners—not just those who are employed in the family company—have strong emotional bonds to the family legacy. However, igniting the sparkler of someone standing next to you is far easier than fanning the flame that bonds the next generation to the family business.
What is the problem? Our "Next Gens," those 15- to 29-year-old family members, are busy growing from teenagers through their college years to young adults. These maturing family members lead hectic lives—going to school, participating in outside activities, leaving home for college, establishing careers and starting their own families. For many of them, the extended family and its enterprise consist of people and entities who are very far away, either geographically or emotionally. To get their attention requires creating a compelling physical presence that leads them to bond with each other and with the family business. Sparking the interest of the next generation as owners of the family business and developing emotional ties can be achieved through celebration, communication and cultivation.
Publicly honoring the achievements of your Next Gens at an annual business meeting is one way to connect these young adults to one another and to the family business. In many families, Next Gens are invited to the annual business meeting after they turn 15. How do you welcome them? How do you celebrate this milestone in their lives? In our family, those who have turned 15 in the previous year receive a plaque indicating they are now considered full voting members of our family assembly. At the beginning of our annual meeting, the CEO introduces each teen to those gathered: employees, directors and family. After receiving a plaque, each new family assembly member is introduced to his or her family-director mentor and to his or her family council representative.
Another business family has created what they call a "coming of age" ceremony. The teens involved meet with their grandparents, who give them a history of the company and talk about both company and family values. The grandparents work with each of the coming-of-agers to develop a speech to be presented later in the evening. The evening event is a black-tie affair that all the family attends. The coming-of-agers get picked up in a limousine and travel together to the dinner. When they arrive, everybody starts clapping. After a social hour and dinner, each teen gives a talk about a family or company value that he or she selected. The young person discusses why this value is important to him or her. The evening ends with a lot of hugging and clapping and tears and pride.
Turning 15 and joining the family assembly is only the first of many milestones to celebrate. How does your business family recognize high school, college and graduate school graduations? Some families create milestone posters to hang on the walls at their annual business and family meeting. For the older Next Gens, there are often the family-centered celebrations, notably marriages and births. Do you publicly acknowledge the recent married-ins? These young adults, new to the family, deserve a public welcome. Some families welcome married-in members with a special toast at the social hour before the annual meeting dinner. This tradition is also a good way to welcome newborns and acknowledge their parents, or to announce new family entrepreneurs and their businesses. Celebrating such family member milestones adds to family cohesion because it helps to spark pride in family members' accomplishments.
Open, honest communication is a basic dimension of cohesiveness in any organization, be it a family or a business. Put family and business together, and clear, two-way communication is of utmost importance. Further, such two-way communication definitely must include the Next Gens. When our third-generation CEO first asked for volunteers for a task force on a family employment policy (which eventually morphed into our family council a few years later), he had college students and 20-somethings raise their hands along with their elders. Wisely, albeit at first with some concern, he included them. Even more wisely, he listened to them. Their sparklers were lit and are still flaming. Later, he reflected back on his experience: "I have to tell you, my expectations were so much lower when we put that group together. I thought that the younger ones would probably be more passive and try and understand what was going on, and learn. But I was wrong. They were immediate participants, and very constructive ones. I had no idea they had that kind of capability and the courage to step into this deal."
Over the past 15 years, these younger family members have encouraged and fostered our extensive business family communication tools. Besides the more traditional tool set of snail mail, email and newsletters, we have a secure family website, a private family Facebook page, Twitter use for responses during our annual meeting, and Skype and FaceTime conference calls. This process has truly been a case of our Next Gens raising their parents, aunts and uncles. By being included, by being listened to and by being affirmed, these younger family members have matured into responsible owners.
Here is a communication challenge: Draw a chart depicting your business and family communication network. Who communicates with whom? How? Are your Next Gens included? Are their voices heard? Are their idea sparks igniting others? Vibrant, lively, two-way communication contributes to interested and responsible ownership. Such communication is an important dimension of cultivation.
Lighting a spark is easy, but tending the flame requires due diligence. What do our Next Gens need to maintain their interest in our family enterprises? How do we cultivate owners who are stewards as well as investors? Recently, our family council was deliberating this question regarding those in high school. We give them a family-director mentor for their high school years, but how do we maintain their interest during the annual business meetings? Someone suggested, "Ask them!" We did; they spoke. Actually, they formed a teen council and came up with their answer: They wanted to continue to listen to business updates, but—because our family business is engaged in forestry—they also wanted to spend more time in the woods. They decided to help our forestry team and wildlife biologists with the preparations for this year's adult field trip.
Our experience is similar to that of another business family who sit their teens on the family foundation board. Working with an older mentor, they do the work of any foundation board. Such involvement enables them to develop leadership skills and helps cultivate their sense of stewardship. It also provides experiential learning about investments, grant writing and the use of family values in decision making.
Valid teen experiences associated with the family business foster further interest in any internship program your family business may have for college-aged students. Something to note: A number of businesses do not pay college interns because they feel that the experience they gain and the college credit they earn constitute ample compensation. Other families take a different path. We, for one, pay our interns what we would pay anyone who does similar work. As one of our past CEOs stated, "Investing in your investors is a wise business decision." Internships groom college students not only for their careers, but also for entry into the job market. In our family business, our interns work with our human resources department by filling out applications, going through a formal interview process and receiving coaching along the way. Once the work is finished, each intern presents his or her experience to the family at the next annual meeting.
These high school and college programs are successful ways to spark interest in the family business from the 20-somethings. However, the question becomes: How do we maintain that spark in our young adults, our post-grad family members? Will they eventually return to work in the business? Will they want to retain their inherited investment in the family legacy?
To make sure these young adults come to the annual business meeting, schedule the meeting at a time when they can attend, most likely a weekend so they do not miss work. To further encourage attendance, pay their expenses, even if you do not do this for all family members.
What do your young adults need to know? Ask them! Form a post-graduate family forum. Such a forum could be an ad hoc committee of the family council. Provide breakout sessions at the annual meeting that focus on their concerns. Topics that professional advisers can address include wealth management, financial planning and family business ownership, and prenuptial agreements. Other ideas include how to set up family finances, how to buy a car and how to buy a home. The goal of such sessions is to prevent an entitlement mentality by cultivating a culture of responsible ownership that stewards the family legacy.
One way to fan the flame of responsible ownership is to encourage and support your young entrepreneurs. Such support can come from a family bank or family foundation. We use the company started by one young family entrepreneur to print T-shirts and other logo items given as gifts at our annual meeting. To continue interest in the family business after internships, we encourage participation on the family council. Attendance at national or regional family business workshops and seminars that provide a focus on Next Gens is a valuable way to cultivate their interest.
Celebration. Communication. Cultivation. All three of these strategies are required to ignite a lasting spark in our 15- to 29-year-olds. To develop into owners with deep appreciation for and pride in the family business, Next Gen family members must have meaningful encounters with one another and with all components of the family enterprise. Elders pass on the legacy, but it is up to the Next Gens to continue and grow it.
Charlotte Lamp, Ph.D., a family owner of Port Blakely Companies, is the principal of Rockwood Consulting LLC.
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