Next generation in Deloitte Private
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This week Niall Glynn, a partner with Deloitte in Ireland, considers the challenges of encouraging engagement in multi-generational family businesses as the family expands.
I was recently at a client meeting where we were discussing the future evolution of Board membership across the second and third generations of a family business. Over the course of the meeting, it became apparent how little the third generation (the future directors) really knew each other, or had much of a connection with the business. The only shared memories they had revolved around distant interactions as children, and more recent ad-hoc interactions at family weddings as adults.
The digital age
With Facebook, Instagram, Snapchat, WhatsApp, text, email and smartphones, it seems it’s never been easier to stay in touch. But despite this, finding the time to talk face-to-face and really build relationships has rarely seemed so difficult. It’s a cliché, but for good reason: we spend so much time talking in the modern world that it can be hard to hear what’s actually being said.
In the numerous conversations I have had with both the current and next generation of family business leaders and their families, we have discussed topics as diverse as the smooth transition of leadership from one generation to the next, family charters, setting up family offices, tax and estate planning, growth, strategy, and the overall speed of change in the market.
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.
When working with family businesses, it’s sometimes surprising to see the gap between the founder and the next generation, particularly when the next generation do not see the importance of the business. This week Rosine Makhlouf, a senior manager with the Deloitte Middle East Family Enterprise Consulting team in Dubai, considers how to encourage engagement of family members who don’t work in the family business.
This week Nikolaj Thomsen, a Partner with Deloitte in Denmark, explores the benefits of creating a community of next generation members of family businesses.
In many of the conversations I have had with the founders of family businesses, one of the hardest discussion topics is whether or not they have managed to find a person of equivalent ability to themselves in the second generation.
Many business leaders have shared with me that their sons or daughters are “brilliant” having completed their MBA studies at Harvard, MIT, LBS or INSEAD whilst simultaneously sharing how they believe their children “think differently” to them.
This week, Ilke Aerts, a lawyer at Greenille by Laga, discusses the importance of the financial education of children.
Talking about money often makes people feel uncomfortable. We also see this happening when it comes to the financial education of wealthy children and children from wealthy families. Parents are can be reluctant to discuss their wealth with their children.
The Deloitte EMEA Family Business survey, “Next-generation family businesses. Evolution - keeping family values alive”, published in May 2016, identifies an array of common challenges young women and men of the next generation have identified with respect to taking over the leadership of their family businesses.