Hurtling through the icy tundra north of Tromso in Arctic Norway, with a team of six dogs in front of you and an awful lot of nothing all around, is perhaps not the first place you might choose to do a spot of business education.
But for Amelia Hodgetts, it was just the ticket. The sixth-generation member of the family-owned M Wright & Sons textiles firm had taken time off to have two children and was looking for something to kick-start her back into work mode. Although she’d done a couple of bungee jumps before, this kind of environment was something altogether new for her. She’d never even been skiing.
“It was amazing”, she says, now safely back in Reading, near London. “We had a quite tough time on the day I was leader, when we had strong winds and high blizzards. Visibility was a bit tricky at times, and the dogs lost the scent. The guides didn’t pick up that they had gone off the track, and we were circling for two hours trying to work out where we were.”
They finally got back on track, and made it to their base for some reviving moose and vegetable stew and a leadership exercise before bed and more of the same. What did she learn from the five-day adventure? “From a business point of view it gave me a greater self-belief, feeling that fear and going with it and finding that you can cope with it and you will be fine. But equally I learned how different personalities act and react in different situations.”
There was a time when educating the next generation to go into the family business involved starting them on the shop-floor, and teaching them the nuts and bolts, before eventually handing over the keys and letting them loose in the boardroom. But we live in more complex times. There’s no end of next gen programmes out there, which aim to help ease the offspring of family business owners into the business, or to make good decisions about exactly what they want their role in the business to be – manager? Owner? None of the above?
Two years ago Lodewijk Tax, a 21-year-old economic and business student at the Free University of Amsterdam, and a next gen in Rijk Zwaan, a family-owned Dutch firm founded in 1924 which develops new strains of crop-seeds, went on a one-week course at the University of St Gallen organised by Ernst & Young’s Junior Academy. One part of the course involved a task in which the class was broken up into small teams of five, and then given a task to develop a product. “The basis of it was the red ocean, blue ocean strategy, where you learn how to find a gap in the market,” he says.
Interestingly, this was no vague, Apprentice-style project, but one that was connected with a real life business. “We worked for a B2B catering business, and we had to come up with ways to make it into a consumer business,” Tax explains. At the end of the week, the next gens presented their idea to a representative from the company. “Our first presentation was in the head office of Ernst & Young, with a representative of a real company,” he says. “That was pretty cool to do.”
The other major component of these courses, whether they are run by banks, business schools or professional services firms that are also keen to get in on the next gen game, is some training about the basics of how to run a family business, and what role these youngsters want to play in their firm.
These courses can be for next gens as young as 16, and for some of the youngsters it’s the first time that it has dawned on them that they will have big decisions to make about what to do with their life, and whether they want to follow their father and/or mother, or to keep their role to being a shareholder. And if they want that, then they will have to prepare themselves for those big choices. It’s a glimpse of responsibility.
Networking is also a central part of these courses. Just as alumni at business schools often tell you that the peer group was at least as important as the actual classes, so these courses can be a chance to mix with – and make useful contact with – people from all over the world. Tax says that his course of around 25 people came from all different countries and sectors, all with different approaches to their work, something he clearly found fascinating and invigorating.
Of course, the exclusive, on-line social networking sites that come as par for the course these days come naturally to millennials, who are at home in the digital world. And for this international bunch, those cyber-relationships are often translated into real-world ones: they have a ready-made network of friends when they travel to other countries. It’s not inconceivable that this might also help their social life, too.
This might all sound rather jolly, but there’s another side to next gen education. Not everybody wants or is ready for the classroom approach, and the looming responsibilities that people who live their young lives in the shadows of phenomenally successful, powerful and wealthy parents or grandparents can be trying. As we all know, for every well-balanced young person happily trotting about and confidently competing and collaborating with their peers, there’s another who feels the pressure of being in a family business.
Sandy Loder is the man who runs the Arctic expeditions, and he is very sensitive to the damage that next gens can suffer. As former British Army officer who served on military operations in Northern Ireland and Sierra Leone from the age of 20, and a fifth-generation member of the Fleming banking family, he knows a lot about mental pressure. “Low self-esteem is common among these people, because the patriarch has been very successful and they see him towering above them and they think, ‘How can we ever be as successful as them?’” he says. “Quite a lot of them are desperate to please their parents,” he adds, “because they have grown up not having seen their parent much because they were building a business.” This can lead to feelings of inadequacy. On the other hand, it’s also common for next gens to have a “sense of entitlement”, behaving arrogantly because they know that they will inherit the business one day. This bravado, Loder says, is a cover for a lack of confidence, because they realise they lack the skills to be a leader.
The idea of taking them to the Arctic is, says Loder, “to teach them to be smart in an environment they are not used to, with tools they have never used before.” Expedition leadership, he says, is different from business leadership, “but you are looking at resilience, resolution, team-work and cooperation, so there are some common threads with the corporate world.”
He points out that next gens’ lives can be filled with academic tests, and they can feel like failures if they don’t excel. Even if they do, they often find – just like their less privileged peers – that the opportunities they were led to expect are just not there. And anyway, he points out, academic skills are not always the ones that make successful entrepreneurs, or help you make good strategic decisions as a business owner.
So what do the parents make of it all? William Solomon, who is from a well-known British banking family, went on the Arctic trip with his daughter and was impressed. “There was quite a lot of serenity, there was lots of thinking time,” he says. And for his daughter is was “a non-Facebook, non-glitzy, non-Daily Mail time.” The daughter of Dr Harald Marquardt, the third-generation head of the German automotive manufacturing firm Marquardt, went on a more conventional classroom-based course after seeing a brochure on his desk.
“It was the first time she had the opportunity to create her ideas in this sort of environment, and start networking with people the same age and with same attitude,” he says. “They can show their creativity, but they also learn how to develop and promote products and convince people of your point of view. It’s the whole cycle of business, in a nutshell.”
Sometimes, the parents learn too. Lodewyck Tax says that after hearing about what he did on his course, his father created a red ocean, blue ocean initiative in his own business. Tax currently sits on the “youth ocean” at Rijk Zwaan, something which not only helps the firm, but gives him a meaningful role in it. “It’s all about working out how to be your own personality,” he says, “and not the son of the father.”
NEXT GENS IN SEARCH OF HAPPINESS
NXG VIEWPOINT: Many people run next gen courses these days, including professional services firms, banks, businesses schools and family office consultants. So what makes a good one? Just as with MBAs, opinion varies. And just as with business education, opinion also divided on whether they are necessary at all.
Plenty of people have succeeded without formal education, both in family and non-family businesses. There are still lots of people who would say that the best education comes on the shop-floor. No doubt that’s true, but a bit of extra knowledge never hurt. Rare is the person who says their MBA was a complete washout.
The formal side of next gen courses, the textbooks-and-classrooms stuff, is no-doubt useful. But the best are very hands-on; there is lots of interaction, presentation and negotiation. And the networking can’t harm, although some parents might worry that the courses are an expensive summer-camp.
Most next gens who have been on these courses say that the “soft” side affected them most. Thinking about your role in the family business is essential – feeling forced into the firm is a recipe for unhappiness. And happiness is increasingly at the heart of business education. The most progressive business schools look at their work as two-fold. Firstly, to help people figure out what they want to do with their lives – some even offer fairly rigorous psychoanalysis. And secondly, to give them the tools to do it. Next gen courses that mirror this model are probably most worthwhile.
The problem, of course, is that those most in need of help are often the least likely to look for it
FOUR OF THE BEST NEXT GEN COURSES
1: Dutch bank ABN Amro runs Next Generation Family Business Seminars, which take place in spring and autumn each year with up to 25 participants from all over the world, and from diverse industries. As well as addressing investment and economics trends, there are workshops about leadership and succession issues.
2: In addition to the Arctic trips, AH Loder is looking to add expeditions in the Middle East and Pyrenees. They also run more conventional next gen educational sessions, and specialize in one-to-one coaching. From next year they will run a next gen programme with Saïd Business School in Oxford.
3: British bank Coutts runs a series of courses called Future Leader and Finance 101 for 18-30-year-olds. Also runs Next Generation in the Family Business forums which typically involves various roles to do with family business, succession planning and so on, as well as bespoke courses designed specifically for individuals, cousins or siblings. There are also next gen network get-togethers.
4: Ernst & Young’s Next Generation Academy has three parts, First, Advanced and Excellence programmes which together cater for ages from 16 up to 30. The courses take place in the US, UK, Singapore and Italy. Alumni have access to a social networking site to help them foster a global network.