Jill McCall knows a family business that has developed a unique tradition. When a new baby is born, the family creates business cards in the baby's name to welcome the
new arrival into the enterprise.
“It's a cultural practice for that family,” explains McCall, the director of the Family Business Center at the Quinlan School of Business at Loyola University in Chicago. “They aim to connect everyone with the family business from birth and find ways to engage them throughout their lives.”
While not every business goes as far as creating baby business cards, engaging the next generation and kindling their interest in the business is a significant objective for many family enterprises. Yet successfully onboarding the next generation and guiding them toward career development and success requires long-term planning. The goal is to encourage NextGens' interest in the busines without fostering a sense of entitlement or obligation.
For family members aspiring to reach the C-suite, understanding the necessary steps as early as possible is advantageous. The specific steps can vary based on the business and family. Some
families mandate advanced degrees or experience in other industries, while others may require future leaders to gain experience in various functions within the company. Certain companies
employ only those family members whose knowledge and skills align with available roles, whereas others may tailor positions for family members.
Regardless of the approach, a critical best practice is for businesses to depersonalize expectations by establishing protocols and procedures, preferably before the next generation reaches adulthood.
Sarah Salomon, who leads the UBS Family Advisory and Philanthropy Services team, suggests that these protocols should encompass not only entry into the business but also assumptions about behavior, compensation and potential promotions once they join.
“This way, a family culture and business expectations are in place regarding criteria, achievements and a track record, whic guide decisions for both the employees and the family members considering employment in the business,” she says.
BUILDING FAMILIARITY
Families should ensure that the next generation is familiar with the business and understands their role as stewards, even if they ultimately choose not to work in the family firm.
“You want them to value the business, comprehend the value it provides and be able to articulate its importance to others,” McCall notes.
Families should start conversations with the next generation at a young age, emphasizing the opportunities within the business as well as encouraging NextGens to develop an identity outside the business. In these conversations, parents can describe the sacrifices they've made for the business and their broader family values.
“It's crucial for the current generation leading the business to share the business's history, its journey through challenges, and defining moments,” McCall adds. “This can provide children with a better understanding of what it takes to achieve success.”
Parents should be transparent about their expectations regarding their children's involvement in the business and convey that it's acceptable for them to choose not join or remain uncertain, Salomon suggests.
The earlier families initiate discussions about different roles in the family business, the better. This helps children understand that various roles or ways to contribute are available, which can influence their choices when selecting a college major or early career paths.
STARTING EARLY
When younger children show curiosity about the business, parents might introduce them to the workplace, create internships or offer early opportunities to gain firsthand experience. This enables the next generation to explore different facets of the business that align with their skills and interests while contemplating the education or experience required for specific roles.
“You need to identify the natural qualities and skills of family members. Do they enjoy working with people? Are they inclined toward working with technology? What brings them joy?” says Denise Federer, owner of the Federer Performance Management Group, specializing in family business dynamics.
Open communication in both directions is essential, according to Federer.
“Parents should share their role expectations but also be open to their children's preferences and interests,” she explains. “Some children may feel pressured to pursue a path that doesn't align with their passion, while others might feel entitled due to their family name, not comprehending the higher expectations.”
Finding a role that genuinely interests your kids increases the likelihood that they will commitment to the organization. Parents may encourage their children to explore jobs or experiences outside the family business, particularly early in their careers. This offers valuable exposure to other work environments and helps them feel confident that they can succeed in on their own, without
familial connections.
While it's advisable to speak enthusiastically about the family enterprise, Ted Clark, director of the Northeastern University Center for Family Business, has a word of caution.“Not every family
conversation, whether at the dinner table or on vacation, should revolve around the family business,”Clark says. “Otherwise, family members not involved in the business may feel excluded, potentially
leading them to believe that joining the family business is the only way to be part of the family.”
AVOIDING A SENSE OF OBLIGATION
Families should recognize that career paths, both within and outside the family business, typically involve diverse experiences. It's essential to provide children with space to explore different
roles and the flexibility to pivot if they find their initial path unsatisfactory.
NextGen members should understand that non-executive roles are available, such as service on the family council. These roles create more ways for family members to contribute and allow them
to reconsider their involvement over time, potentially taking on leadership positions later on.
“Some families overlook their human capital at different stages of life, failing to explain what it means to be part of the business and the available opportunities,” says Kirby Rosplock, chief learnig officer and founder of Tamarind Learning. “The 18-year-old may only see the corner office but may not understand the foundational
or entry-level roles.”
If opportunities exist outside the operating company, they should be discussed as well, as they might better suit certain NextGen members. For instance, family offices may offer roles for
those interested in investment analysis, while family foundations may appeal to individuals with philanthropic inclinations. Joint ventures within family businesses can provide entrepreneurial
family members with opportunities.
Setting expectations and encouraging family members to gain relevant experience is crucial. For example, a family member seeking a foundation role might participate in junior boards or study
nonprofit management.
CREATING OPPORTUNITIES
Offering part-time opportunities to family members while they are in school or entry-level positions upon graduation can help them appreciate hard work and gain experience before taking on greater
responsibilities.
“It's frustrating to see families not adequately preparing their offspring with the same rigor they'd expect from non-family members,' Rosplock says. “This can undermine both the older and
younger family members if the younger ones lack the skills, capacity and knowledge to succeed.”
To progress, the next generation must establish a foundation of work experience, either within or outside the business, to be recognized for their contributions beyond their family name. This
approach also garners respect from non-family employees.
Gaining respect also hinges on understanding the basic expectations for work within the company and providing ongoing feedback to the next generation as they assume new roles.
Federer shares an example of a company where the owner's son, son-in-law and nephew all joined after working elsewhere. While they worked diligently, showing up at 7 a.m. daily, other employees
arrived between 5:30 and 6 a.m.
“The company head eventually told them, ‘If you want their respect, you need to arrive before they do,'” Federer recalls. “It's an expectation for anyone who genuinely wants to work here.”
THINKING LONG-TERM
If the objective is that the younger generation will eventually take over, discussions should address how the transition will unfold and over what timeframe, even if it spans many years or decades.
“There must be a deliberate approach to the role of the NextGen family member and the long-term vision of the older generation,” Salomon emphasizes. “Are they bringing someone in to replicate
past practices, or are they open to new ideas and evolution that drive growth and adaptation as the market and environment change?”
Jill McCall knows a family business that has developed a unique tradition. When a new baby is born, the family creates business cards in the baby's name to welcome the
new arrival into the enterprise.
“It's a cultural practice for that family,” explains McCall, the director of the Family Business Center at the Quinlan School of Business at Loyola University in Chicago. “They aim to connect everyone with the family business from birth and find ways to engage them throughout their lives.”
While not every business goes as far as creating baby business cards, engaging the next generation and kindling their interest in the business is a significant objective for many family enterprises. Yet successfully onboarding the next generation and guiding them toward career development and success requires long-term planning. The goal is to encourage NextGens' interest in the busines without fostering a sense of entitlement or obligation.
For family members aspiring to reach the C-suite, understanding the necessary steps as early as possible is advantageous. The specific steps can vary based on the business and family. Some
families mandate advanced degrees or experience in other industries, while others may require future leaders to gain experience in various functions within the company. Certain companies
employ only those family members whose knowledge and skills align with available roles, whereas others may tailor positions for family members.
Regardless of the approach, a critical best practice is for businesses to depersonalize expectations by establishing protocols and procedures, preferably before the next generation reaches adulthood.
Sarah Salomon, who leads the UBS Family Advisory and Philanthropy Services team, suggests that these protocols should encompass not only entry into the business but also assumptions about behavior, compensation and potential promotions once they join.
“This way, a family culture and business expectations are in place regarding criteria, achievements and a track record, whic guide decisions for both the employees and the family members considering employment in the business,” she says.
BUILDING FAMILIARITY
Families should ensure that the next generation is familiar with the business and understands their role as stewards, even if they ultimately choose not to work in the family firm.
“You want them to value the business, comprehend the value it provides and be able to articulate its importance to others,” McCall notes.
Families should start conversations with the next generation at a young age, emphasizing the opportunities within the business as well as encouraging NextGens to develop an identity outside the business. In these conversations, parents can describe the sacrifices they've made for the business and their broader family values.
“It's crucial for the current generation leading the business to share the business's history, its journey through challenges, and defining moments,” McCall adds. “This can provide children with a better understanding of what it takes to achieve success.”
Parents should be transparent about their expectations regarding their children's involvement in the business and convey that it's acceptable for them to choose not join or remain uncertain, Salomon suggests.
The earlier families initiate discussions about different roles in the family business, the better. This helps children understand that various roles or ways to contribute are available, which can influence their choices when selecting a college major or early career paths.
STARTING EARLY
When younger children show curiosity about the business, parents might introduce them to the workplace, create internships or offer early opportunities to gain firsthand experience. This enables the next generation to explore different facets of the business that align with their skills and interests while contemplating the education or experience required for specific roles.
“You need to identify the natural qualities and skills of family members. Do they enjoy working with people? Are they inclined toward working with technology? What brings them joy?” says Denise Federer, owner of the Federer Performance Management Group, specializing in family business dynamics.
Open communication in both directions is essential, according to Federer.
“Parents should share their role expectations but also be open to their children's preferences and interests,” she explains. “Some children may feel pressured to pursue a path that doesn't align with their passion, while others might feel entitled due to their family name, not comprehending the higher expectations.”
Finding a role that genuinely interests your kids increases the likelihood that they will commitment to the organization. Parents may encourage their children to explore jobs or experiences outside the family business, particularly early in their careers. This offers valuable exposure to other work environments and helps them feel confident that they can succeed in on their own, without
familial connections.
While it's advisable to speak enthusiastically about the family enterprise, Ted Clark, director of the Northeastern University Center for Family Business, has a word of caution.“Not every family
conversation, whether at the dinner table or on vacation, should revolve around the family business,”Clark says. “Otherwise, family members not involved in the business may feel excluded, potentially
leading them to believe that joining the family business is the only way to be part of the family.”
AVOIDING A SENSE OF OBLIGATION
Families should recognize that career paths, both within and outside the family business, typically involve diverse experiences. It's essential to provide children with space to explore different
roles and the flexibility to pivot if they find their initial path unsatisfactory.
NextGen members should understand that non-executive roles are available, such as service on the family council. These roles create more ways for family members to contribute and allow them
to reconsider their involvement over time, potentially taking on leadership positions later on.
“Some families overlook their human capital at different stages of life, failing to explain what it means to be part of the business and the available opportunities,” says Kirby Rosplock, chief learnig officer and founder of Tamarind Learning. “The 18-year-old may only see the corner office but may not understand the foundational
or entry-level roles.”
If opportunities exist outside the operating company, they should be discussed as well, as they might better suit certain NextGen members. For instance, family offices may offer roles for
those interested in investment analysis, while family foundations may appeal to individuals with philanthropic inclinations. Joint ventures within family businesses can provide entrepreneurial
family members with opportunities.
Setting expectations and encouraging family members to gain relevant experience is crucial. For example, a family member seeking a foundation role might participate in junior boards or study
nonprofit management.
CREATING OPPORTUNITIES
Offering part-time opportunities to family members while they are in school or entry-level positions upon graduation can help them appreciate hard work and gain experience before taking on greater
responsibilities.
“It's frustrating to see families not adequately preparing their offspring with the same rigor they'd expect from non-family members,' Rosplock says. “This can undermine both the older and
younger family members if the younger ones lack the skills, capacity and knowledge to succeed.”
To progress, the next generation must establish a foundation of work experience, either within or outside the business, to be recognized for their contributions beyond their family name. This
approach also garners respect from non-family employees.
Gaining respect also hinges on understanding the basic expectations for work within the company and providing ongoing feedback to the next generation as they assume new roles.
Federer shares an example of a company where the owner's son, son-in-law and nephew all joined after working elsewhere. While they worked diligently, showing up at 7 a.m. daily, other employees
arrived between 5:30 and 6 a.m.
“The company head eventually told them, ‘If you want their respect, you need to arrive before they do,'” Federer recalls. “It's an expectation for anyone who genuinely wants to work here.”
THINKING LONG-TERM
If the objective is that the younger generation will eventually take over, discussions should address how the transition will unfold and over what timeframe, even if it spans many years or decades.
“There must be a deliberate approach to the role of the NextGen family member and the long-term vision of the older generation,” Salomon emphasizes. “Are they bringing someone in to replicate
past practices, or are they open to new ideas and evolution that drive growth and adaptation as the market and environment change?”