Resources to Prepare the Next Generation of Your Family Business

Resources to prepare the next generation of your family business

When we work with family businesses to structure and execute their ownership transition to the next generation, we often get questions from the exiting generation about the resources that may be available for their children after they are gone.

There seems to be a consistent theme when we work on these transition projects. The next generation (G2) is often more formally educated than the previous generation (G1). As a result, G2 tends to take a more academic approach when confronting problems. In contrast, G1 tends to rely more on gut intuition when faced with similar problems. The older generation is more likely to simply make a decision and deal with the consequences as they arise while G2 seems to thoroughly analyze the situation before making the final call.

G1’s primary concern with G2 is their lack of experience. G2 simply does not have the same level of perspective because they have not yet logged in the years. Here are a few resources we have found helpful for G2 to supplement their knowledge and overcome the experience issue:

  • Next Generation/Peer Groups – Formal learning groups that meet on a regular basis can be a great way to gain insight from other family business owners. Certain groups may be generation-related, while others are geared toward specific roles within an organization, such as CEO or CFO groups.
  • Educational Seminars and Conferences – Another learning tool is participating in educational seminars and conferences. These can be more technical or soft-skill and geared towards specific industries, or they can be more general in nature. They often require less of a time commitment and in addition to providing meaningful information, they can be a great networking opportunity.
  • Use of an Advisory Board – Lastly, a really effective way to help G2 succeed is to use a more formal type of board structure. An advisory board provides a platform for G2 to present the current state of affairs and address any current concerns. A well-run board will hold G2 accountable and keep them on track with running the business.

As you can see, there are a myriad of resources for supporting the next generation and making the transition as successful as possible. To discuss the options that might be best for your family business, please feel free to contact me directly.

Steven E. Staugaitis, Kreischer MillerSteven E. Staugaitis is a director at Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email or 215.441.4600.

 

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