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8 Ideas To Strengthen Your Family-Owned Business
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Article 4: Groom The Next Generation
In the long run, the strength of your family firm rests on the strengths of the next generation.
Family members who choose to stake their careers in the family business should be given every opportunity to succeed, without coddling. Their fortunes should rise and fall in step with their capabilities.
But the family firm can do much to help prepare the up-and-comers. Provide training, just as you would for an outsider coming in as a new employee.
Mentor the younger generation to prepare them for management duties. Give them ample time to work within each of the firm’s areas of operations, from accounting and purchasing to sales, product development and manufacturing. They’ll learn to see the relationships between the success of the departments and the overall success of the company.
They’ll also build relationships with the people (both family and non-family) who work in those departments. And if the new generation proves adept, they’ll earn the respect of the rank-and-file employees—a huge benefit when they step into management positions.
Learning the ropes from the ground up also helps groom family members for participation in the larger issues of governance and strategic direction, issues that they’ll tackle later in their careers with the company.
Develop written policies for compensation, career paths and benefits that apply to all employees, including family members. These policies will help the younger generation see where their hard work can take them in the company.
Train younger family members in more than on-the-job skills. You also want to pass on the family-business values, such as community involvement and philanthropy. The typical American family firm donates $50,000 annually to philanthropic causes, mostly to local, educational and religious organizations, according to the 2003 MassMutual/Raymond Institute American Family Business Survey.
Just as important, don’t force family members to stay in the business if their passions take them in another direction. In fact, many family-business consultants recommend that family members actually work outside of the family business before joining the firm. The experience gives them fresh ideas and perspectives that they can bring back to the family business. It also lets them make mistakes without their elders looking over their shoulders.
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