Next Gen Prep: Curriculum - Wendy Dickinson

Wendy Dickinson, Catalytic Conversation$

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Introduction:

We kick off season 4 with a look at family business.  Creating a family legacy is hard work.  Fewer than 20% of businesses make it to the fourth generation.  Why is that?  What contributes to the failures from one generation to the next.

A favorite resource is the PWC Family Business Survey series.  Today was take a look at the challenges for those in power to prepare the next generation for leadership.  Using the PWC Global Next Generation Survey from 2019, we will start off with a few discussion points:

• Gaining top level experience is the #1 priority for NextGens in increasing their skills.  48% would like to do more shadowing/mentoring, 43% feels the need to network more with peers, 42% would like to gain experience outside of the family biz, 41% would like to gain international exposure.
• The “incumbent” generation is not answering the call by and large.  2018’s Survey found that only 15% have succession plans and 44% had none.
• Here are the skill Next Gens say are most important for the business and they need the space to make mistakes and gain experience in these areas:
  • Problem solving and strategic thinking 72%
  • Leadership 71%
  • Financial Management 57%

You, and your family, have dedicated significant resources to building the minds and confidence of your Next Gens.  But, are you willing to take this a step further – actually several steps further?  By designing a succession plan?  By creating a list of company needs that you present to the Next Gen to explore fit?

It takes courage and patience to hold the space for the growth and development of the Next Gen.  Identify learning and experience goals that your Next Gen leaders can use to fill their knowledge and experience gaps.

SHOW OBJECTIVES: THE WHY

• Tell the family business story – again, and again.
• Set the next gen up to work within the business early on. (Summer camp, summer jobs, after school, mentorships)
• Actively engage in discussing the roles within the family biz and what each one takes to succeed today and into the future.
• Shared values and vision.
• Have a working relationship – decision making, problem solving, conflict resolution, and strategic planning require shared vision, values, trust, and mutual respect.
• Make sure the family education includes business and financial education.  Best practices, profit plans, emergency recovery funds, and building cash reserves should be included.

KEY ISSUES: Problems You May Encounter:

1. Companies benefit from an engaged, involved and fully functioning family where everyone is on the same page.  Many families find that this is a challenge.
2. Many families disagree on major issues facing the business.
3. Many family businesses ignore the importance of formalizing family decisions.  Family governance is important and often misunderstood.
4. Different opinions, spoken in different voices to the company as a whole can disrupt the operations, and capabilities in the company.  It is important for everyone to be on the same page, even if not everyone shares the same opinions.
5. The values of the last generation no longer resonate with the current generation.  Establish a mechanism for review and rededication.

What You Need To Know - THE WHAT:

1. Strategy to build the family relationship, share experiences, educate, trust with vulnerability, for each individual as well as for the next generation as a cohort.
2. Develop alignment through family systems education.
3. Develop a decision making process that provides psychological safety in which every voice is heard, and generate viable options.
4. Stages of transition and what to expect as things continue to evolve.
5. Educate each person in conflict resolution allowing each person to navigate cross generational communication.  The current generation in power may not be ready to let go of the reins, whereas the next generation may have doubts about assuming the responsibilities of leadership.

What You Need To Do - THE HOW:

1. Begin by setting next gen up to be the best version of themselves.  The relationships between family members as well as with the business itself is explored, developed, and nurtured with the idea that the business will continue into perpetuity.
   1. Embrace best practices for talent development.  Set the family member up to successfully develop leadership abilities along with gifts and skills.
   2. Potential in the HBR article is described as: curiosity, insight, engagement, and determination.
2. Next, consider how far each person could go in leadership development, and in what areas (be specific!).
   1. We are all different in our capabilities and capacities in the areas of growth & development.
3. Create a family employment policy - explore the roles waiting to be filled by the next generation.  Identify who might fill what roles, and how well the person fits the role.
   1. Practice radical candor and share these perspectives with the family members using respect.  Honor each person’s gifts and skills, as well as potential.
   2. Check their motivation to fill various roles.
   3. Personal circumstances, identity, preference may influence the person’s interest in various roles.
4. Organize regular family meetings.
   1. Dedicate part of the meeting for scenario planning.
   2. Discuss succession planning and exit strategies.
   3. Offer educational opportunities
   4. Offer social, team building activities.
   5. Rededicate to the mission, vision, values, and purpose.
5. Develop a continuity plan for the family and for the business in the face of transitions of leadership, ownership, governance, and the family assets.

Resources:

1. “Developing The Next Generation of Leaders in your Family Business”, by Claudio Fernández-Aráoz, January 31,2020, HBR.  https://hbr.org/2020/01/developing-the-next-generation-of-leaders-in-your-family-business
2. Work The Bugs Out: Practices To Work In, & On, Your Business, by Wendy Dickinson, Publish: TBD.  Excerpt: Free Downloadable PDF’s to work through.
3. Next Generation Family Business Global Survey, PWC, January 2019.

You can connect with Wendy Dickinson on FB, LinkedIn, and Instagram.


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