With their ear buds and smart phones, young millennials are omnipresent; constantly in touch with the world and each other, sharing information and experiences, and adopting new technology at a fast pace. Also known as members of the elusive Generation Y, they think with their hearts, overflow with ideas, are ready to change and innovate, want to get things done and overcome the deficiencies of the past generation. They are exciting and enervating to some, to others they represent a threat to the status quo. In the family business they are your kids, and when they voice all sorts of new directions, as an elder, you see their impatience and impulsiveness. A clash is almost inevitable, but how the family manages the welcome, inclusion and engagement of this next generation can spell success or disaster for its future. In this article, Prof. Dennis T. Jaffe who is a global family consultant, author of “Stewardship in Your Family Enterprise”, and currently working on a study of centenarian family enterprises, explains in this article how generation clashes occur everywhere, but that in the case of the family enterprise they need active attention.
Millennials have many options when entering the working world: from banding together to set up exciting start-up ventures to joining established businesses, Generation Y is known to follow its passions. This means that when family elders make the traditional assumption that the members of the next generation readily want to join the business, they may underestimate the many choices young people have nowadays and miss out on doing the necessary to attract their own millenials.
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But what happens if the family manages to entice the next generation to join the business? After a business or technical education, a young family member may enter the family business seeing the challenges ahead and the need to innovate and change. They expect the older generation to be open to this. While every previous generation had similar expectations, today’s millennials live in a world more attuned to their style than that of their parents. On the other hand, the elders’ demands and expectations may have good reasons. While they sense the eagerness and potential of the millennials, they also know that developing capabilities means that their successors have to take the time, and endure the frustration of taking on tough tasks.
But where lies the balance? Too often, the family elders overemphasise their set expectations not realising the degree to which the business has to change. Millennials, for all their urgency to do what needs to be done immediately, do have a clearer idea of what has to happen and how the world is being transformed around them. They are a resource, not a force that needs to be tamed. For this reason, the older generation should have the sense to engage their millennial children in a conversation that balances their traditional expectations and concerns, with new possibilities. Let us explore the many factors that influence intergenerational conversation in the family business.
What’s different about Millennials
In the 1970s, Strauss and Howe (see Millennials Rising: The Next Great Generation, Vintage, 2000) first characterised different generations in the United States by their shared social experience. They observed that people who had grown up in a depression, those who grew up in wartime, and those who grew up in stable prosperity, shared social experiences that forecast their personal style and future expectations. In the 1960s, a period of great social change emerged, accompanied by a psychological shift from tradition to self-expression, leading to new opportunities to participate in social experiments, political change and new types of organisations. These “baby boomers” then had children, labelled Gen X, who grew up in a more permissive and less rule-bound environment. Their children, in turn, are the millennials, born between 1980 and 2000.
This generational model has now become global. The millennials, unlike their parents, occupy an unbounded electronic community. They have grown up with technology; computers, phones, the web, online connection and access to information as facts of life. They are “digital natives”; technology is a natural extension of who they are, in contrast to their parents, who had to gradually adjust to each new digital advance. And there are more adaptive and useful qualities of the millennial generation: They reach out, and are in contact with others almost irrespective of time and place. My youngest son, a digital native, when he was 12 would spend his evenings on “raids” in an on-line game with other young people all over the world. No longer can a style or idea be connected to a single region or nationality; as people are educated in different places and are part of global communities at school, they develop a global perspective.
As my millennial son enters the workforce, the country or place that he works in can be anywhere; he does not feel constrained by national boundaries. His view of work is that it should be meaningful—he wants to solve problems, and he wants them to be the ones he agrees need to be solved. He does not expect to commit to a single job or career; he expects a life-long journey of discovery. He seems to be in touch with everyone he has ever met – on trips, in school, and in shared activities. Unlike his parents, he does not want to do things on his own – he is much more of a collaborator, and is less concerned with whether a project is his or someone else’s. The connected world is collaborative.
Crossing Generations in the Business
How can the family business usefully integrate the styles and views of the older boomers, Gen Xers and millennials? The millennials may resist the pressure to join the family business because they feel they have more options than previous generations. They see it as a choice, and they want to know the “deal” before they enter the family business (though many of them still find it difficult to talk openly about this with their employer/parents).
Typically, we find three workplace orientations/attitudes in the family business (keep in mind that these generalisations are common but not at all universal): The elders, business founders, carry a dual attitude in the family business: they are innovators, but they expect the next generation to be bound by their traditions. In Asian and Middle-Eastern cultures, they expect that their children will follow their paternalistic leadership. The founder raises children who are dutiful, and want to follow their parent’s footsteps and do what they want. These Gen X-second generation siblings can be torn by the choice to follow tradition or go their own way. Maybe one or more self-directed siblings will move on, leaving the dutiful, often the eldest children, to follow tradition. The new generation may in fact have a vital perspective that the elders need to attend to.
Enter the millennials, usually members of the third or later generation (but sometimes also the younger or more independent and outside-focused members of the second generation), who follow a different path. They see an opportunity, but also the limits of the elder’s current vision and management style. Through their open minds, millennials can be a vital resource to the family business.
This does not mean that they are rejecting the family traditions and legacy. They respect that the elder generations have created wealth and a presence in the community, that brings them opportunities that others might not have access to. They respect the values and integrity of the family legacy even as they see that these cannot be counted on their own to develop a healthy future. They understand also that while they can start their own new ventures, their family is an incomparable source of capital and contacts.
When is it right for millenials to join?
Millennials have to decide that they want to be part of the family enterprise. While the family may expect the next generation to offer their services to the business, successful family enterprises are aware that their best heirs have other options. The family has to make itself attractive to the next generation. A third generation family usually has several family branches whose children have made different choices sometimes leading them to different parts of the world. A family enterprise cannot assume that family bonds exist, but must find ways to call together the far-flung members of the next generation to consider what the family has to offer.
Previous generations may have been content to enter the business and serve a long apprenticeship before being granted any power of decision-making. They viewed succession as a family tradition where they would inherit if they did as expected. Millenials feel less constrained: They will want to see change immediately, or else be given a clear reason why not.
The cross-generational dialogue that ensues can unfold into different scenarios: The most common, sadly, is for the elders to assume that they have communicated what is expected clearly, and the millennials to assume differently. Hurt feelings or worse may result, as the two generations operate at cross-purposes. The second scenario is when the older generation tries to control the behaviour of their children, by making pronouncements and setting up policies that are well intentioned and meant to protect the business, but which do not take into account the need for change. This can have the opposite effect, leading some talent to pull away feeling they will not be listened to. The third scenario is for the elders to make it clear that responsible behaviour is desired, but that the exact pathway, policies and outcomes will be created together. Responsibility will be earned and as the next generation demonstrates their ability, they will have greater control. This path is the least common, the most difficult and yet potentially, the most effective.
Resilience through Adaptation
I recently taught an executive MBA class for next generation family members in Dubai. The mostly millennial students knew that their family businesses had to adapt and grow, and they saw elements in the family tradition that made this difficult. Many of them mentioned that the family valued the loyalty of family members even if they did not perform. Many of them wanted the support of the family to go in new directions and they wondered how they could raise that issue with the older generation.
One member of a 500-year-old European family told me that while they had 480 years of predictable success and orderly succession, they had seen more change in the past 20 years than in the whole of their history! Successful families today talk about resilience and adaptation, but to achieve it is a challenge for a family bound by tradition.
For a family enterprise to become resilient, the elders, who have power and control, must realise that they need to be open to new ideas. They have made a great investment in their young people, and they need to be open to listening to them. While the emerging generation should not expect to be in charge immediately, they should be able to experiment with new opportunities and new directions.
Successful families appear to adapt a perspective based on anticipating the future and planning ahead (see Good Fortune: Building a Hundred Year Family Enterprise, Prof. Dennis Jaffe and Wise Counsel research, 2013). I have worked with several large and very successful families, who invite their younger generation to use their education and unique view of the world to help the family create a 50-year plan for the business. The older and younger generations have to spend time and work together talking not just about how things have been in the past, or what the founders or elders want, but what the emerging challenges are and how the family can use its resources to position itself for future success.
The process of moving forward can be conceptualised as an adaptive Roadmap, which outlines the journey ahead as the family and family enterprise plan their future:
A family can create their future together by holding a series of conversations about each successive stage of the journey. The elders can talk about legacy, the millennials can add their understanding of future challenges, and together, they can revitalise the mission, values and vision, and then, plan the key objectives and action steps for the family business to face the future.
Cross-Generational Family Gatherings
To accommodate the energy, creativity and special insight of the millennial generation, the family must create a shared conversation between the traditional, dutiful and millennial elements in the family. This conversation moves across generations, and allows the younger members to share their energy and ideas. Rather than following the elder’s path, the emerging family enterprise can enhance its vitality and resilience through this exchange.
Cross-generational gatherings are a great platform to have this dialogue and are often planned as much as a year in advance; so family members can arrange to attend. They need a lot of preparation. Here is a list of steps to set up a cross-generational planning process successfully:
Build shared cross-generational engagement
First, the family should convene a steering committee, with 2 or 3 members of the older and younger generations (often 3 adult generations participate) to design a summit conference to look at the future of the family. The family has a lot to offer, but the opportunities must be stated clearly.
Plan the gathering carefully and thoughtfully
The steering committee plans the event, featuring time to get to know other with discussions of both the business and family future. There should be time for each generation to meet separately, to talk about what they want from each other. The millennials, when they spend time together and discover their commonalities, are able to pose questions, share concerns and envision possibilities that can excite the family. But their questions can also be uncomfortable, in that they challenge the way that the family has done things in the past. The millennial gatherings are often full of excitement as they discover ways to leverage the family “capital” in ways that they could not accomplish on their own.
Hold the event
Hold the event at a comfortable place away from home. Set a clear agenda and create ground rules for the meeting. Define clearly what is wanted and what will be done. Keep in focus. Many such gatherings engage a non-family member as a facilitator to help them listen to each other and keep focused.
Learn from each other to devise new paths for the family enterprise
The creative exchange and respectful listening across generations is easy to prescribe and hard to achieve. The key is to resist making quick plans, and seek out and gather new information and new ideas, together, and take the time not to argue, but to learn together.
The most important part of a family meeting is what happens after it. The meeting will produce action steps and commitments that people make to each other, to work further on certain areas and continue discussion. Someone must be responsible for making sure that these steps are taken, and that family members remain in communication.
The challenge for a family is to create a climate where each generation feels respected and understood by the other. The paths forward are not just defined by the wisdom of the elder generation, but are enriched by the thoughtful inclusion of the millennial generation.
Tharawat Magazine, Issue 23, 2014