Martin C Gower is consultant to Lawrence Graham LLP.
In a world of global businesses, families increasingly view themselves as citizens of the world says Martyn C Gower. But what effect is this internationalisation having on different generations of the family, and on the business?
For many years I have been involved in the affairs of an English public school where the number of foreign students joining has risen on a continual basis, and is now at an all-time high. They come from a broader range of countries and cultures than ever before, and have a positive influence on the pupils by broadening their horizons and introducing them to different cultural values. The internationalisation of education is completed by the increasing number of schools and universities that are setting up establishments in countries around the world, taking with them their philosophy and teaching standards.
It is an interesting debate as to whether there is more value in being exposed to foreign influences at earlier or later stages of life. It also depends on whether the purpose of the exposure is general or more specific in nature. Whatever the arguments, it seems that this is both a healthy and natural extension of the way in which human society is becoming more global. Our world has shrunk dramatically and many successful families consider themselves citizens of the world and not of some individual nation state.
The young ones abroad
Businesses benefit tremendously from learning how their foreign competitors work and they learn new ideas, but they also learn to expect that an approach that works in one country will not automatically work in another. But there is of course the other side of the coin. Sending the next generation abroad to study and work may actually serve to increase tensions.
Let us take the example of a next generation heir who comes back from study/work abroad and tries to impose what (s)he has learnt on the family business, believing that a different approach, in a different culture, will work. It is often just inexperience, although sometimes it can also be arrogance, to think their "new" ways are always better than the "old" ways.
Both generations have to be wise enough to see where the real tension arises rather than looking at the results of that tension. Individuals can often rationalise what is really a personal issue relating to a disinclination to admit that an heir has a better idea, by claiming that the suggestion is flawed from a commercial viewpoint. If the heir's idea has come from an ability to think laterally because of exposure to different ways of thinking, this may be hard for a parent – who may be frightened that his or her approach is undermined – to understand or accept.
It is often said that people prefer to pay for experience rather than take advice, while novelist Mark Twain once observed that he was thoroughly against change, but thoroughly in favour of progress. The difficulty comes when trying to distinguish between the "if it ain't broke, don't fix it" school of thought and the one that acknowledges that no-one can be complacent given the pace of change in the modern world.
Of course, tensions can be creative as well as destructive and creative tensions are usually a force for good. What is important is that the tensions should be expected and managed on both sides.
The worst outcome is if the enthusiasm of youth is killed. This can be caused by an over-bearing and/or controlling patriarch, with the risk that tensions will prove destructive and the personality of the heir is damaged, if not destroyed. This happens all too frequently and is one reason why it is so rare to find family businesses lasting for many generations.
I had the pleasure of talking with one of the most outstanding businessmen of the last 50 years, the late Sir Geoffrey Eley. He commented on Francis Bacon's observation that "young men are fitter to invent than to judge, fitter for execution than for counsel and fitter for new projects than for settled business". Eley believed this was generally true but far from universal. Sometimes, despite the age on the birth certificate, the more elderly person retains an excitement and imagination and initiative well into his mature life. By the same token, there are some who are young who are, in outlook, drearily conservative and unimaginative.