Recently, I had the opportunity to talk with a group of family business owners from all across Iowa, manufacturing companies and service businesses of all shapes and sizes. They spoke candidly about their successes, challenges, and learning experiences along the way. They shared best practices and cautionary tales. Many of them are preparing to pass the baton of ownership and leadership to the next generation of family members and want to make sure the younger generations are ready for the handoff. One of their biggest questions is, “How do we prepare our young people to lead and do it quickly?”
In her book “The Long Game: How to Be a Long-Term Thinker in a Short-Term World,” Harvard professor and author, Dorie Clark, shares three key traits that contribute to a long-term mindset, regardless of age or history of life experience: curiosity, resilience, and independence. Here’s how some of the multigenerational families we work with are nurturing these crucial traits among their next generation owners and leaders. Whether you’re a business owner or not, helping your children and grandchildren build these skills is critical for their success with money and finances as adults.
1. Curiosity
One of our business-owner clients wanted to get his grandchildren more familiar with the day-to-day operations of the family enterprise. So the board of directors designed a young shareholder orientation experience. Over the course of two days, the grandchildren toured multiple manufacturing facilities and took part in a hands-on production line experience. They also had a tour of the company headquarters and met with a group of the company’s executives and board members for an educational session.
The grandchildren came away from orientation buzzing with excitement. They raved to us about how cool it was to handle a multimillion-dollar piece of production equipment on the production line, mimicking one of the job functions of a full-time production specialist. Curiosity was certainly ignited that day! Think about your own family. – Is there an experience you can facilitate with your children and grandchildren that will pique their interests or spark some questions?
2. Resilience
A client with whom we work is in his 80s and is still active day-to-day in the family business that he co-founded. He feels strongly about building a bridge to the next generation shareholders at an early age, while he is still alive and able to share his lived experience and life lessons. As a result, the company recently formed a board of directors for the first time and named a shareholder, a granddaughter in her early twenties, to a board seat as one of a few family shareholder representatives. The board also included the co-founders and key executive leadership team.
By including this young shareholder very early, the company provided her more opportunity to gain context and learn about the company’s past, present, and future while her grandparent is able to teach and coach her. As a next step, the company is also exploring the possibility of forming a corporate foundation and including this young shareholder as a board member. Think about your own family. Is there a formal or informal way to include the next generation owners and leaders and give them exposure to the business and decision-making process in a meaningful way?
3. Independence
To help the new board member in her twenties prepare for her board service and learn more about the family enterprise decision-making process, the family’s role as advisors is to help her gain familiarity and confidence with the meeting proceedings. After all, high schools don’t teach a class on “How to be a Family Business Board Member.” Before each quarterly board meeting, we host a conference call with the young board member and her co-founder grandfather to walk through the agenda line by line, item by item.
By providing her with an overview of the meeting format and agenda flow, she knows what she can expect at each phase of the discussion. Having her co-founder grandfather present is especially helpful with providing context for company-specific agenda items, including financial results, employee engagement, capital investment, and community impact. Think about your own family, as you design an inclusion effort for your next generation owner and leaders. How can you leverage your advisor, corporate, and family resources to help your children and grandchildren better understand the family business environment?
How are you engaging your children and grandchildren when it comes to money, finances, and business? We’re here to help you on the journey to expand their curiosity, resilience, and independence. Connect with us today.