We can make the family business attractive to the next generation. But we need to listen to them and not force a future in the business on them.
It's a fact. Few family businesses make it to the 5th generation. And not surprisingly, it's the generational change that is critical to the future of the business.
Not all family businesses are best kept in the family. But if you're running a family business and you want to make sure the next generation and the business have a fair chance at a shared future, there are some specific things you can do:
✅ Make time for your children so that the family business isn't remembered as an evil time-waster, but perhaps as a place where they could visit and possibly even have fun.
✅ Tell your children about the company, what it contributes and what it means to your family and others.
✅ Give your children an extracurricular or student job in the company so they get to know it and its values from the inside and develop a sense of belonging.
And when they get a little older:
✅ Don't give young people the feeling that they have to join the company for you or their ancestors. This can create a heavy sense of duty, which is not necessarily a good incentive to get involved in a business.
✅ Never assume that succession is a formality, because it can be a surprisingly difficult process where everyone, both collectively and individually, needs to come to a decision about their future roles.
✅ Listen to the next generation and value their input, even if you don't always agree. If you want them to find their feet and take the business forward safely, you need to trust them and show that you do.
Your children may find that they would rather do something else than continue or own the business.
But by giving them the opportunity to come to that realization themselves, you've ensured that you're not the one pushing them away from a future in the family business.
You are actually doing something else by inviting the next generation in long before you let go of the reins.
You are creating a situation that can make it clear to everyone, including the next generation, whether the next generation is suitable to continue the business or whether everyone would probably be happier with different roles.
What are your experiences with generational change?
Read also about salaries as a source of conflict in the family business.