Next Generation Leaders

by Sherry Herwig
June 22. 2020

The Wisconsin Family Business Center recently held its first virtual speaker series event, bringing together generations of family business owners to talk about succession planning and developing the next generation of family business leaders. Dr. Amy J Katz and a panel of Wisconsin Family Business Center members shared insights and their personal stories on how they prepared to step into the family business.

The Wisconsin Family Business Center recently held its first virtual speaker series event, bringing together generations of family business owners to talk about succession planning and developing the next generation of family business leaders. Dr. Amy J Katz and a panel of Wisconsin Family Business Center members shared insights and their personal stories on how they prepared to step into the family business.

Getting to Know the Next Generation

Even before they are officially leaders within the family business, the next generation already plays a role in the organization by just being around it.

  • When they do step into official roles, they will bring different, generational perspective.
  • Young leaders know the business well, maybe more than senior leaders/relatives realize, and they admire the generation(s) of family business leaders before them.
  • They take pride in the business and understand the role the organization plays in the community and in the lives of nonfamily member employees. This organization is a legacy and they are proud to be a small part of it.

Next Generation Concerns

  • Young leaders are comfortable with innovation and will push for more technology to be integrated into the business.
  • They might also look at longstanding norms of the business, for example human resources practices, and see them as outdated, maybe even potentially risky to the business’ reputation, and in need of changes.
  • Young leaders also have concerns about measuring up to those who have gone before them in the family business and living up to their expectations. They have grown up “in the shadow” of the business and when they are ready to step onto the stage, they will want to be prepared to be leaders of the organization too.

Lessons from the Shadow

How can future leaders prepare themselves before they take the stage? Here are a few things the panel encouraged:

  • Ask more questions. Young leaders have likely heard stories of and from the family business their entire life - piece together the truths, what might be wrong, and learn from all of it. What isn’t understood? How did these norms and systems form? What do the current leaders see for the future of the business?
  • Build better relationships now to use later. If young professionals want people to stop viewing them as a child, give them good reason to see you as an adult. Get to know the nonfamily members who are a part of the business. Knowing them well will make the transition in the future easier.
  • Learn as much as you can about yourself. What are your interests and needs? Do they actually want to be a part of the family business going forward?
  • Find the right role works within the business. Young professionals need to think about their talents and interests. Do they have a knack for sales? Are they passionate about finance? Look for ways to do what they love while still working in the organization.
  • Start thinking about the future story. This business is a legacy so what are young leaders going to do with its future? They’ll need to think about the story they want to write too!

Stepping onto the Stage

When the time comes to step up into the family business, try to remember the following:

  • Be prepared to stumble and learn. We all fear failure, but failure is important to growth. One panelist knew the other leaders of his family’s organization was expecting him to fail, so he embraced it as an opportunity. He set new, small goals for himself to work toward and slowly accomplished them until his confidence grew.
  • Develop an ensemble. Build a team of leaders. Get surrounded with people who are smarter than you and listen to them. Get to know the managers and find mentors, coaches, and peers – learn from everyone.
  • Own your authority. Practice having authority. Young leaders must think about how others think of them. Don’t be afraid to make the workplace fun. Impress the rest of the team and don’t act like you own the place just because you are one of the family.
  • Create your own stage – whether or not that’s in the family business. It’s okay if young leaders realize their path is leading them elsewhere.

Transition from Shadow to Stage

To the parents and relatives of those who are about the step on the stage that is the family business, the panelists reminded them the following:

  • Remember that they are not you. Letting go of your own role within the family business, whenever that times comes, will be a challenge. You need to trust the next generation. Be supportive of them, don’t be controlling, and let them make mistakes.
  • Prepare them. Times of transition can be scary for everyone involved if no one feels prepared. Have conversations about what their stepping into the business officially will be like and how everyone is going to manage the situation together. Each side needs to listen to and support the other.
  • Give them some power. Bring the next generation into the fold somehow – whatever that looks like for your family and business. Show them you trust them and believe in them. Work together to make the situation work.

As the next generation steps into the family business, remember that it can be a smooth transition when everyone plans and prepares, and we know you can do it too! For more information on the Wisconsin Family Business Center’s peer groups, please click here.

Link to peer groups: Click Here