Preparing the Next Generation

On this weeks show I am joined by Guillermo Salazar as we discuss what family businesses can be doing to help prepare and engage their next generation given that we are living in turbulent times.

We look at the different types of mindset that people are adopting during the COVID-19 pandemic and how this impacts your family business.

In addition Guillermo talks us through a case study of a family that he has worked with to help them prepare their next generation to be owners of the business.

Key Takeaways  

1. The Need for Emotional Attachment 

It was great to speak with Guillermo about the way family businesses can be preparing the next generation. As with most things relating to family business, there are complexities that need to be navigated but Guillermo describes brilliantly how he has worked with families to help guide a third generation business in creating an emotional attachment to the business amongst the next generation. 

Beyond that the program that he has developed allows those that want to pursue a career within the business the opportunity to do so. 

2. The Need for Good Governance 

It never fails to surprise me when I hear that the success of initiatives or projects within the family ‘system’ of a family business is inherently linked to the presence of strong and robust Family Governance. The presence of a strong Family Council can help to ensure that projects such as an engagement program has the support and backing that is needed for it to be successful. The danger otherwise is that the exercise is not taken seriously or that the follow up work that is needed is not fulfilled. 

The introduction of governance can be a challenge and many don’t know where to start, if this is you, get in touch as I can help facilitate the introduction of the governance structures that are appropriate for you and your family.   

3. The Importance of the Right Mindset 

Guillermo talks us through the three different types of mindset that he comes across in his work, particularly so in the current climate. These mindsets will dictate hope open the business is to the concept of preparing the next generation. 

As an example, there are protagonists. These are the people that are seeing opportunity in the current environment and embracing the challenges faced, they are leading the business forward. 

Next we have those who have adapted. They are primarily driven by doubt and are observing and waiting to see that they should do next. 

Then there are the witnesses. People with this mindset are being consumed by fear and are not making any decisions.  

Guillermo observes that different generations within the family business are seeing things differently, with the majority of the ‘Millennials’ adopting a for more protagonist approach to the current situation. 

Obviously this is not the same across the board but it is important to have an appreciation of how others may be feeling during the current crisis, particularly when we are looking at engaging the next generation and perhaps talking about succession. 

4. The Value of Storytelling 

As part of the program that Guillermo runs, he gets the participants to research the history of the family business and present this back to the family. This is a great way to get to know the family business, to understand that things may not have happened in a straight line. It highlights that the family have been through trials and tribulations historically and weathered previous storms.

It also allows the participant to feel that they are playing their own part in the history of the family and / or the business but the process means that they are not pressured into joining the business if this is not what they want to do. 

The process of researching the family history creates a dialogue between the generations that can help to enhance relationships and create more of an emotional attachment to the business than perhaps existed beforehand. 

5. The Value of External Facilitation 

Guillermo and his team facilitate and design the program and whilst we have featured him on the show, there are a growing number of family business advisers who are able to design and facilitate programs that can achieve what you are looking to achieve as a family (myself included 😉 ). 

Having somebody from outside of the family facilitate such programs means that they are able to remain focussed and objective when it comes to the work that needs to be done. If you are considering undertaking any form of project that relates to the ‘family system’ within your family business, I would recommend speaking to a suitably qualified professional to see how they can help.