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At some point in time, many next generation family members will have a decision to make about whether or not to join their family business. This can be an extremely difficult choice, not least because of the tension between the opportunities afforded by family businesses and their inherent complexity.

Perhaps the largest draw of joining is how rewarding it can be. Family businesses typically start as single owner-manager operations, and many retain their entrepreneurial character even as they achieve scale. Family members joining the organisation can have the opportunity to make a real difference to the business. Family businesses also often have a unique working culture and environment, and it can be great fun to work alongside family members and contribute to a common purpose. Joining a family business also provides a way to perpetuate the family values, traditions and heritage, and continuing the family legacy is a strong pull for many would-be joiners.

Of course, despite these attractions, we know that the question of whether or not to join the family business is rarely simple. It is no secret that communication can be extremely challenging in family businesses, and individuals thinking of joining should make sure that they have thoroughly considered the complex emotions and commitment to honesty involved in working alongside family.

Having said all this, it is still very common to see individuals joining their family business for the ‘wrong’ reasons. Next generation family members may join because it seems like the easy option, rather than being motivated by the entrepreneurialism, togetherness and legacy mentioned previously. Conversely, they may harbour a strong desire to step out from under their legacy and forge their own path, but feel pressured to join by other family members out of a sense of duty.

Alternative approaches

Of course, the question of whether or not to join the family business is far from black and white, and alternative approaches than ‘to join or not to join’ are becoming increasingly common.

Perhaps the simplest example of this is when next-generation family members choose to defer their decision about joining the family business until they have gained outside experience. As I wrote recently in an article for Forbes India, this can be highly advantageous for both the business and the individual in question.

Those who gain experience outside the family entity benefit from a more varied understanding of the business world, which can transform their business if they choose to join at a later stage. For the individual, succeeding at something alone, away from the family, helps build self-esteem and confidence in one’s own abilities. Gaining experience outside the family business is also likely to build external credibility – a CV with only employment in the family business on it may be a disadvantage if the individual later chooses to seek employment elsewhere.

Another approach that can be very successful is one we might call ‘mandatory dismissal’. A number of families I have worked with recently have decided that all next-generation family members are guaranteed a job for two years once they finish university, but will be dismissed at the end of this period, regardless of their performance. A moratorium on re-employment is then imposed (usually for 5-10 years), during which time the individual can find work elsewhere, increase their knowledge of their chosen field, and decide whether or not they truly want to return to the family business.

I witnessed another highly creative approach during recent work with a family. With this particular group there was a feeling amongst the founding generation that allowing the next-generation to join their main, very stable business under the premise of ‘stewardship’ might engender laziness or make life too easy for them. Accordingly, the next-generation were barred from entering this business, and instead encouraged to join any of the much smaller fringe businesses the family owned, some of which were performing quite poorly.

Looking back, this has turned out to be a very wise decision. Not only have the next-generation had an opportunity to cut their teeth whilst transforming the ailing companies, but they have also added to their family legacy of entrepreneurial flair. This might not have been the case had they simply walked into senior leadership roles in the ‘mothership’ organisation.

Forging an individual path

Deciding whether or not to join the family business is often a source of great angst to next-generation family members. Individuals may feel forced into it, not able to explore their own career paths, or may join out of ease, knowing that their working life might be easier than if they were to join another company.

Gaining outside working experience before making any binding decision can help with all these issues enormously, as can working in the ‘half-way house’ of a smaller division or business unit. The key is to create an environment in which individuals have a chance to forge their own path, challenge themselves, and grow as people and employees. This is likely to be of great benefit to both the individual and their family in the future – whatever route is ultimately taken.

  

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Peter Leach – Deloitte UK

Peter is a partner in Deloitte UK specialising in advising family enterprises and the Deloitte Global Leader Family Enterprise Consulting as well as Adjunct Professor of Family Business at Imperial College. As an advisor, teacher and facilitator, Peter works with families around the world, and specialises in dealing with governance issues in multi-generational business families. Peter is considered the ‘founding father’ of family business thinking in the UK and has written several books on the subject, most recently, Family Enterprises: The Essentials published by Profile Books.

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