Professor Randel S Carlock is the Berghmans Lhoist Chaired Professor in Entrepreneurial Leadership and Director of the Family Enterprise Challenge executive programme at INSEAD. Elizabeth Florent-Treacy is Research Project Manager at INSEAD.
The FBN's Next Generation Worldwide Meeting proved once again to be a big success, attracting over 400 participants. This year, however, delegates included not only junior family members but also senior family members wishing to learn more about the challenges that will face their offspring
The dilemma faced by next generation family members as they consider their future is as universal as it is uniquely individual. The comments from Rena (names have been changed), a young INSEAD MBA student, are typical: "I was reluctant – afraid, really – to wrestle with my future in our family business. My parents are still eager for me to return to the company and help them run things.
"I feel an enormous responsibility towards them, and yet my year in France studying for my MBA was my first experience living outside of Greece, and it has been tremendously exciting. That experience has made me realise how much more I want to do before returning to Greece and the family business."
Rena was tormented by her conflicting options and was extremely relieved to discover that most younger generation family members go through a similar struggle at some point in their professional career. As she learned, taking on a leadership or ownership role is very difficult, particularly on an emotional level. Most next generation family members face their future with several fundamental questions:
- What are my responsibilities to my parents and my family?
- What do I owe the family firm?
- Should I explore career options outside of the family business?
- What other options for participation in the family business exist (advisor, board member, owner)?
A timely forum
In our research, we have found that business families as a rule do not adequately anticipate the challenges that the next generation will face in balancing responsibility to the family with their own career aspirations, and as a result, the next generation members are poorly prepared to resolve these issues.
Recognising the need to address the concerns of younger family members, the FBN has been addressing the next generation of family business leaders since 1999, starting with the Stockholm conference. This year, in September 2002, a special workshop was a part of the FBN worldwide conference in Helsinki. The FBN's Next Generation Worldwide Meeting was designed to provide a forum for family business members who are currently moving to leadership roles, or who will hold these roles in the future.
It proved to be the right topic at the right time, with a broader constituency than the organisers had expected: although the workshop was designed for next generation members, a large majority of the 400 participants turned out to be senior family members who decided to accompany their children to the event. This added a great deal to the depth and breadth of the discussions and workshops.
The workshop included three activities: Tony Bogod of the Stoy Centre for Family Business co-ordinated the overall session and introduced the programme. He and Dr Barbara Murray, Director of FBN, began by presenting survey research that helped frame the issues. Their presentation highlighted the concerns of family business members, particularly:
- Training and developing the younger generation;
- Leadership succession;
- Strategic challenges.
Dr Murray then facilitated two live cases, with next generation family members sharing their stories and experiences to help make a connection for the participants. In her presentation, she focused on learning from family members' personal experiences, specifically asking what we can learn from these experiences that will foster a decision-making process, which is good for one's self and good for the business. What are the criteria that people who find themselves Entering the Business or Recommitting to the Business can use to overcome the blind spots that can lead to making a decision that turns out badly, often at a high personal cost?
Continuing with this theme, Professor Randel Carlock presented a new INSEAD case study and video, Love and Work: Finding One's Place in the Family Firm, based on the story of MBA student Rena. The case is effective with next generation family members because it looks squarely at the emotional issues they face.
The case study workshop was structured to allow the participants to study Rena's choices and dilemmas, and then project ideas to their own family business career issues. Specifically, participants were asked to think about the ways they do – or do not – fit into their own family firm, the way Rena did.
Professor Carlock also showed a short video interview, in which Rena describes how she found answers to these questions. Her comments proved to be particularly interesting for senior family members who had not faced a similar challenge themselves.
After the break-out session, Prof Carlock reviewed Rena's options for dealing with her difficult career conflict. He pointed out that she had to begin with an honest and open discussion with her parents about her personal goals. As Rena said: "I finally got the courage to have a serious talk with my parents. They seem to understand some of my arguments, and are open to my taking some time away from the family business, but we've agreed that regardless of what I decide to do in the short term, I'll find some way to be involved in the family firm."
With her parent's reluctant approval, Rena accepted a position as a consultant – and then obtained a delayed entry to allow her to work in the family firm for six months. The family experience was a great success, but she decided to join the consulting firm, as promised, where she is now a senior consultant. However, because she had six months experience working for the family, a new option opened up for her. She is now a board member of the family firm, which allows her to see her family regularly and contribute to the company.
It was interesting to note that during the group discussion of the case, senior generation family members took an active role in responding to the case questions. For example, a representative of the senior generation observed that with her engineering degrees and MBA, Rena could consider working as a consultant for a while before going back to the family firm, which – participants later discovered – was exactly what she had done. This parental reaction surprised more than one next
generation family member.
Next generation challenge
The next generation's major challenge – regarding both their roles and the family transitions they will face – can be summarised as an imperative need to create a new shared vision based on core values and a regenerative strategy. This can come about only if the family can balance change and stability. The success of the family enterprise often depends on the next-generation's ability to create this new strategy and vision – while at the same time protecting the values that are so important to the senior generation.
However, this tremendous responsibility often falls, as the FBN workshop activities reminded us, on unprepared young or mid-life family members. They are eager to meet with their peers to discuss life experiences and solutions.
Renata Bernhoeft-Urbasch, a workshop participant, said: "This was a great workshop with insights for all next generation participants. Much reflection was brought on by your sessions."
Judging by the positive response from younger and senior family members, the FBN's Next Generation Worldwide Meeting is precisely the type of forum that family business members are looking for.