ISSUE 11 FEBRUARY 2010

Bring on the Next Generation

The Next Generation (NxG) can add a lot to the family’s success in low times. They are the generation that is the most comfortable with change and new ideas - which may be just what is needed.

Some family leaders suggested that the NxG’s very lack of experience can become an advantage. They don’t have set ideas nor do they want to repeat what worked well 20 years ago. They are ready to see the situation as it is, and respond to that situation without being tied by the past.

Crises are always worse than expected.

A crisis can break down some of the distance between the generations. It forces a deeper discussion as the senior generation recognise their need for more input and additional people.

At the same time, the Next Generation will benefit from the senior generation’s experience and resources. “We need you!” is their cry. But the cry is often unspoken and unheard.

Some FBN members were keen to use a crisis to increase involvement of the NxG and speed up giving them responsibility. After all, the NxG will live in the future that comes out of the crisis.

Improve communication

Everyone knows that communication is important - but most people naturally tend to avoid conversations that could be difficult or sensitive.

Family leaders suggested tactics that make it hard to avoid communication:

• schedule regular meetings (so people can’t avoid meeting!);
• set a clear expectations and desired outcomes;
• make sure that there are informal as well as formal meetings; and
• organise meetings between generations.

Another idea was to copy the way that Native Americans have “pow wows”. A pow wow is a gathering of large numbers of people from a tribe. There are clear expectations about what type of things will happen, including social interaction as well as strategic discussion.

All this suggests a certain level of planning. That’s because without planning, good conversations may never happen.

It can be helpful to look at what other families are doing. Ideas include regular family retreats that include visits to family-owned factories, social events that are paid for by a share of dividends, and special programmes for younger family members.

Outside advisers can also help in developing formal structures that make it easier to talk. An example would be a Family Council that operates according to a clear set of rules. It may have regular meetings to gather family input that is then shared with the Executive Board.

A family leader pointed out that the time to plan and set up structures is ‘when the sun is shining’. In other words, before you reach a crisis!

Build confidence

Leaders’ values, and the way they live them out, encourage followers to not just achieve goals but also build a more effective organisation. But what if a crisis makes leaders feel uncertain about their values or vision?

One rule about crises seems to be that “it’s always worse than you thought possible”. Leaders may wonder if their vision really is the right one.

But leaders must be very careful about sharing any doubts with others in their organization. They are supposed to have an inspiring purpose for their team. If they talk about doubts, they risk damaging confidence in their leadership.

It can be lonely at the top. So leaders need huge amounts of support.

This may come partly from outside the business. It’s helpful for leaders to talk with others who understand the pressure but who are far enough removed to be independent and neutral.

For example, support could come from family members who are not working in the business.

With support, the leader can pass through times of crisis and tests of leadership. The core of the leader’s values can survive, even as their life experience and perhaps their personality are transformed. Values can be a solid rock that survives a battering from a terrible storm.

During a crisis it’s easy to get caught in the trap of looking back and going over and over what went wrong. But this tends to destroy confidence, both in yourself and others.

While it’s important to learn lessons, it’s also important to focus on what action needs to be done now and in the future.

Again, family members who do not work in the business can play an important role, this time in helping leaders stay positive. There is no difference between feeling more confident and being more confident. As families help their leaders to feel confident, so the leaders will find it easier to maintain the confidence of others. As one family leader said, it’s a case of “trusting that what you’re doing as a leader is okay”.

More ideas

Look out for the second part of this article in the next Family Business Network E News and discover more suggestions for dealing with crisis.

In this issue

Onvest Oy and Maarit Toivanen-Koivisto
Onvest Oy is a leading family business in Finland.

Marrying into the business What is it like for people to marry into a family business?

How families manage risk Taking risks is at the heart of entrepreneurship.

How to build trust during difficult times
Trust is a special form of business capital.