Potential of Generational Y Family Business

“The transition from one generation to another has never been as big a problem for family businesses as it is now, but the new generation of business owners have big plans for their family enterprises….”, a recent PwC survey has revealed.

The highest risk of conflict within a family business arises during the transitional process from one generation to the next. If the family is not properly prepared and the process properly planned and executed the tensions that arise due to the uncertainties brought about by the transition will end up breaking the family and the business. In today’s world the gaps between generations have become so much more pronounced than ever before as a result better education that the siblings are achieving and due to the rapid IT revolution that has taken place in a relatively short time, the risks of getting it wrong have never been greater.

Up to some years back it was perceived that the main problem related to the generational gap between current owners and next generation members was attributed to age differences and the hands on business experience garnered by the older generation over their lifetime. In today’s age this is only one facet of the picture. With the higher educational achievements and the rapid inroads of the IT revolution, the way we communicate and the way we use IT has totally changed the way things are done. The speed at which decisions are made has totally gone celestial. These new developments have caught many a current family business owner unawares because they have not managed to keep up with these developments. Hence they feel at a disadvantage with their siblings who have grown up with the new technologies and are assertive enough in putting their ideas forward.

Changing the Status Quo

As siblings are being better educated, they have become very ambitious and full of ideas to effect change and growth, but at the same time and in many instances they are being kept at bay by the older generation. Consequently, frustration within the next generation is setting in. Compounded with this is the fact that the current generation are healthier and living longer and as a result loath giving up management and control for a multitude of reasons or more appropriately excuses.  We are coming across family businesses where the current generation are in their mid seventies and still in full control of the business and the next generation are in their late fifties and disillusioned about their future.

The new generation also known as Generation Y or Millennials, think with their hearts, overflow with ideas, are ready to change, innovate and adopt, want to get things done and are dead set to overcome the deficiencies of the past generation. They are exciting and full of energy to some, but to others they represent a threat to the status quo.

When they join the family business they still remain your kids, and when they voice all sorts of ideas, as an elder, you see their impatience and impulsiveness which seem to you as threatening for you and your business. Under these conditions conflict is inevitable. The challenge for these families in business is of how can the family business integrate the styles and views of the older generation and the millennials?

Workplace Attitudes

Typically we find a number of workplace attitudes in the family business: the business founders who carry a dual attitude, they are innovators but at the same time they expect the next generation to be bound by their traditions, also expecting them to be dutiful and follow in their parent’s footsteps.

Family and Business Work-Life Balance

Enter the millennials, who usually form part of the second or third generation who are following a different path in how they live their life. They want to achieve a better work to life balance, they want to follow their dreams and aspirations many a time before they decide to join the family business. They see an opportunity, but also the limits of the elder’s current vision and management style and they are ready to challenge the status quo. Through their open minds millennials can be a vital resource to the family business. Their way of doing things does not mean that they are rejecting all that has been achieved by their parents.  They appreciate and respect that the senior generation has created the wealth that brings them opportunities that otherwise they wouldn’t have and they also respect the values and integrity of the family legacy.

Whilst earlier generations may have been content to enter the family business and go through long apprenticeships before they are given management control, millennials feel less inclined since they want to see change at a fast rate or else they expect a clear reason why their opinions are not being heard.

Generational Differences

These generational differences which are being exacerbated by technological changes will lead to breakdowns if cross generational dialogue does not take place. Each side has to be ready to understand and adapt to the new scenarios. If communication between the generations fail this will hurt feelings, or even worse may result, as the two generations would end up operating at cross-purposes.

For a family business to overcome this generational hurdle, the elders who have power and control, must understand that they have to open up to new ideas forwarded by Generation Y family members. The seniors must remember that they have considerably invested in their siblings and they must be ready to open up. On the other hand, the emerging generation should not expect to be given control immediately. They should realise that they need time to experiment and gain practical experience with the emerging opportunities and new directions that they could be part of.

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