Family businesses are unique—they carry the weight of legacy, values, and tradition, while also balancing the need for innovation and adaptation in a rapidly changing world. One of the greatest challenges and responsibilities for family business leaders is preparing the next generation to lead, steward, and grow the enterprise. Developing the rising generation is not only about securing the future of the business, but also about fostering purpose and unity within the family itself.
Why Developing the Next Generation Matters
Without intentional development, family businesses risk stagnation, leadership gaps, and even family conflict. Studies show that the survival of family businesses diminishes as they pass through the generations. Proactively preparing the rising generation equips them with the skills, confidence, and shared vision needed to overcome these odds. It also strengthens family bonds and ensures that the core values and mission of the business endure.
Five Key Activities to Develop the Rising Generation in Your Family Business
1. Early Exposure to the Business
Involve younger family members in your business from an early age, even in small ways. This could mean bringing them to company events, assigning age-appropriate tasks during summers, or encouraging job shadowing opportunities. Early exposure helps demystify the business, builds a sense of belonging, and seeds curiosity about the company’s operations.
2. Formal Education and Training
Support continued education related to the business, whether it’s in management, finance, technology, or your company’s industry. You could also consider creating a family education fund for college, specialized training, or leadership workshops. Providing access to external learning opportunities ensures the rising generation has both the knowledge and credentials to contribute meaningfully.
Peer groups focused on next generation for family businesses can also be a great way to gain perspective and begin developing a network of support.
3. Structured Mentorship Programs
Pair younger family members with experienced mentors, both within and outside the family. Structured mentorship allows for knowledge transfer, honest conversations about challenges, and personal development. Encourage regular check-ins, goal setting, and feedback, creating a safe space for growth and learning.
Executive coaching is another meaningful way to develop leadership skills and help rising generation family members navigate through periods of change and growth.
4. Involvement in Strategic Decision-Making
Invite the next generation to participate in board meetings, strategic retreats, or family business councils. Give them a voice in important conversations about the company’s direction, values, and succession planning.
At their core, family councils provide education about the business and promote family connections. Active involvement fosters a sense of responsibility, helps them understand the complexities of leadership, and gives them real-world experience in decision-making.
Many family businesses also reserve observer seats for the rising generation to participate in portions of formal board meetings.
5. Encouraging Entrepreneurial Initiatives
Support the rising generation’s own entrepreneurial projects, even if they are outside your core business. This could mean providing seed funding, mentorship, or simply a sounding board for new ideas. Encouraging innovation not only builds leadership skills but also allows the family business to stay agile and relevant by learning from these ventures.
Multi-generational family businesses often have a family investment company that is a store of value for excess working capital from the business. These entities can be used to help support family initiatives through loans or capital investments.
Start Developing the Next Generation Today
Developing the rising generation in your family business is a long-term investment that pays dividends in continuity, resilience, and shared purpose. By intentionally exposing younger family members to the business, supporting their education, providing mentorship, involving them in decision-making, and encouraging entrepreneurial spirit, your family can ensure its legacy is not only preserved but strengthened for generations to come.
Ready to put these strategies into action? Start by evaluating where your family business stands today and identifying opportunities to better prepare the next generation. Check out our Family-Owned Business Services or contact us today to begin building a roadmap for your family’s future.