The Family Business Network has recently published a report on emotional ownership (EO), written by Asa Bjornberg and Nigel Nicholson, which argues that a higher level of EO leads to higher commitment and participation of family members in the family business. EO can therefore strengthen the business culture, enabling survival and success. Here are five ways to increase the next generation's sense of belonging to the family business:
1. Take advantage of support for the next generation
The following forms of support will tend to increase EO among the next gen:
– Belonging to a network of other next gens.
– Going to family business education seminar
– Receiving professional career counselling.
– Being linked with a mentor who works in the family business.
The authors suggest encouraging the family to form networks and peer-groups: "It is important for next gen members to meet people in similar situations and to feel less alone. It is equally important to have a space for exchange between seniors and juniors. Encourage them to participate in family business conferences and programmes – this provides a great reflective space taken out of the context of day-to-day life."
2. Talk to the next gen about the possibility of joining
If the family expects a member of the next gen to join the business, then that person will tend to have a higher level of EO. With some people, stronger EO is linked to strong views on their career path held by others – in particular by parents, spouses/partners and other relatives.
"It would be a mistake to regard a person's career development as only an individual responsibility – it is closely tied in with the family," say the authors. "At the same time, young people's dreams and aspirations should be safeguarded, since these can easily get overlooked or swamped by the overwhelming presence of the family business."
3. Give a stake in ownership
The research shows that share ownership helps to build EO. This is unsurprising: people are more likely to feel EO if they have actual share ownership. A shareholding attracts people's interest, especially when dividends keep flowing into their bank accounts.
At the same time, share ownership does not guarantee EO. There may be other negative factors that prove much more powerful – such as the experience of bitter family conflict over the business.
Also, some people can have a very strong sense of EO even without any ownership at all. In some cases they may hope to gain ownership one day; this hope encourages EO even without any current share ownership being necessary.
4. Encourage involvement in business activities and studies
Some people just aren't interested in business at all. If so, they can hardly be expected to be interested in family business. So it makes sense to expose young people to the business world so that they experience its attractions and fascination.
The authors' advice is: "Create opportunities for the next gen to have work experience in the family business, from a relatively young age. In the very early years this can include simple tasks to provide visible exposure to the business but in later years it is best to devise targeted projects that involve real development tasks. Any kind of previous work experience in the business increases a person's EO … the seeds of EO are planted by even quite small and early exposures to the firm."
In addition, if people take a MBA degree, they will tend to have higher EO. No other type of degree is associated with higher EO.
5. Ensure face-to-face contact between the next gen and the business
The research shows that it is a mistake to rely only on websites or newsletters as ways to draw in the next gen. It is much more powerful to allow next gen members to participate in face-to-face meetings where they can use their voice.
"The routes to EO are always active and never passive," say the authors. "EO comes from social inclusion and proactive engagement. It is a mistake to regard all 'information' as something objective, rational and neutral. In the context of family communications, the medium sends signals about inclusion and exclusion. The more personal the form of communication, the more powerfully it will bind people together."
For example, family leaders might consider bringing other family members into the workplace for discussions and decision-making. It can also be valuable to organise social events where the context is the family business; for example, the event might include a visit to one of the family's production facilities or customers.
To read the full report, visit www.fbn-i.org, click on Family Business Topics and choose Ownership Issues/Strategies.