Family Business and Responsible Wealth Ownership: Preparing the Next Generation

Purpose must be authentic and upfront

The ability to make a difference in society is a privilege and that difference can be made on a small or a large scale. Family businesses, new and old, need to be clear on what they are doing now, and in the future, to make a difference and why – taking very clear consideration of the needs of people and the planet. This purpose is real and true and so significant for family business that it must be front and centre. If this means operationalising family values and organisational change, then that is necessary, to ensure purpose is understood and embedded in the thinking, behaviours and business. .

Patriarchy must give room to individualism

The notion that what has happened in the past will carry us with good stead into the future is diminishing amongst new generations of family business owners. There is a much greater emphasis on individualisation in the context of business, partly  due to the social disparities highlighted by the pandemic and other social and cultural shifts. A respect for the past remains, though there is much closer scrutiny by next generation family members on   how the business and wealth  originated.

Acknowledge the past and present

Each generation has to create  wealth as families grow and shareholdings fragment across generations.  But there are not enough conversations about the importance of wealth creation and entrepreneurship taking place and this can generate unhealthy attitudes and relationships within a family business. There can also be challenges in the history and generation of wealth, which cannot be ignored or ameliorated with doing good. It requires much closer inspection and honest discussion to unpick the past and appropriately address the future.

Pandemic impacts must be seen as an opportunity

Despite significant shocks from the pandemic, family businesses, more so than other models, are wired for longevity. The pandemic underscored the valuable role of family businesses around the world. Many of these were SME’s, which responded with urgency to support local, regional or national pandemic alleviation efforts motivated by simply doing the right thing at a time of crisis, The pace of change demanded by the pandemic was uncomfortable for some family businesses, but it highlighted their ability to adapt.. Agility was afforded by technology and this offered greater levels of innovation, but also increased the very visible element of each individual in their own environment, bringing a level of humanity to the workplace. For family business, where human capital is key, as is ongoing reflection on the employee value proposition, this brought to the fore another interesting dynamic to learn from.