Picture yourself on the Fourth of July as a child “back when,” holding an unlit sparkler with great anticipation. Once lit, the sparks flew everywhere and all too quickly died out. That is, they died out…
…until you figured out that you could keep the sparks flying by lighting another stick before the first one died, and then another and another.
Creating sustainable sparklers got to be a game of collaboration with siblings, cousins, and friends. Likewise, in the world of family business, sustainable family businesses require sustainable families. These sustainable families supply not only family employees, but also family owners with deep emotional bonds to the family legacy.
However, igniting the sparkler of someone standing next to you is far easier than fanning the flame that bonds the next generation to the family business.
What is the problem?
Our “Next Gens”, those 15 to 29-year-old family members, are busy growing from teenagers through their college years to young adults. These maturing family members lead hectic lives going to school, participating in outside activities, leaving home for college, establishing careers, and starting their own families.
They often have neither the time nor the interest in placing priorities on entities and people very far away either physically or emotionally. To get their attention requires creating a compelling physical presence that leads them to bond with each other and with the family business. Sparking the interest of the next generation as owners of the family business and igniting the emotional bonds can be achieved through celebration, communication, and cultivation.
Celebration. Invite them too!
Publicly honoring the achievements of our Next Gens at the annual business meeting is one way to connect these young adults to one another and to the family business.
In a number of family businesses, 15 seems to be the age at which family members are invited to the annual business meeting.
How do you welcome them? How do you celebrate this milestone in their lives? In our family, anyone who has turned fifteen the previous year receives a plaque indicating they are now considered full voting members of the Family Assembly. At the beginning of our Annual Meeting, the CEO introduces each teen to those gathered: employees, directors, and family. After receiving their plaque, each new family assembly member is introduced to their family director mentor and to their family council representative.
Another business family celebrates what they call their “Coming of Age” ceremony. The teens involved meet with their grandparents who give them a history of the company and talk about both company and family values. The grandparents work with each of the coming-of-agers to develop a speech to be presented later in the evening. The evening event is a black tie affair that all the family attends. The coming-of-agers get picked up in a limousine and travel together to the dinner. When they arrive, everybody starts clapping. After a social hour and dinner each teen gives their talk about which family or company value they picked, why they thought it was important, and what it meant to them. The evening ends with a lot of hugging and clapping and tears and pride.
Turning 15 and joining the family assembly is only the first of many milestones to celebrate. How does your business family recognize high school, college, and graduate school graduations? Some families create milestone posters to hang on the walls at their annual business and family meeting. For the older Next Gens, there are often the family-centered celebrations, notably marriages and births.
Do you publicly acknowledge the recent married-ins? These young adults, new to the family, deserve a public welcome. Some families choose to do this welcome with a special toast at the social hour before the annual meeting dinner. This tradition is also a good way to welcome newborns and acknowledge their parents or to announce new family entrepreneurs and their businesses. Celebrating such family member milestones adds to family cohesion because it helps to spark pride in the accomplishments of family members.
Communication. Open and honest.
Open, honest communication is a basic dimension of any organizational cohesiveness, whether that organization is a family or a business. Put family and business together and clear two-way communication is of utmost importance. Further, such two-way communication definitely needs to include the Next Gens. When our third generation CEO first asked for volunteers for a task force on a family employment policy (which eventually morphed into our family council a few years later), he had college students and 20-somethings raise their hands along with their elders. Wisely, albeit at first with some concern, he included them. Even more wisely, he listened to them. Their sparklers were lit and are still flaming. Later he reflected back on his experience: “I have to tell you my expectations were so much lower when we put that group together. I thought that the younger ones would probably be more passive and try and understand what was going on, and learn. But I was wrong. They were immediate participants, and very constructive ones. I had no idea they had that kind of capability and the courage to step into this deal.”
Over the past fifteen years, these younger family members have encouraged and fostered our extensive business family communication tools. Besides the more traditional tool set of snail mail, email, and newsletters, we have a secure family website, a private family Facebook page, Twitter use for responses during our Annual Meeting, and Skype and Face-time conference calls. This process has truly been a case of our Next Gens raising their parents, aunts, and uncles. By being included, by being listened to, and by being affirmed, these younger family members have matured into responsible owners.
Here is a communication challenge: Draw your business and family communication network. Who communicates with whom? How? Are your Next Gens included? Are their voices heard? Are their idea sparks igniting others? Vibrant, lively, two-way communication contributes to interested and responsible ownership. Such communication is an important dimension of cultivation.
Cultivation. Involve them.
Lighting a spark is easy, but tending the flame requires due diligence. What do our Next Gens need to maintain their interest in our family enterprises? How do we cultivate owners who are stewards as well as investors? Recently, our family council was deliberating this question regarding those in high school. We give them a family-director mentor for their high school years, but how do we maintain their interest during the annual business meetings? Someone suggested, “Ask them!” We did; they spoke. Actually, they formed a teen council and came up with their answer,
“Let us listen to the business updates for a while, but let us spend more time in the woods.”
Our family business is engaged in forestry. They decided to help the forestry team and the wildlife biologists with the preparations for this year’s adult field trip.
Our experience is similar to another business family who sit their teens on the family foundation board. Working with an older mentor, they do the work of any foundation board. Such work provides them leadership skills and stewardship cultivation as well as first-hand learning about investments, grant writing, and the use of family values in decision-making.
Valid teen experiences associated with the family business foster further interest in any internship program your family business may have for college age students. Something to note: a number of businesses do not pay college interns because they feel that the experience they gain and the college credit they earn is ample compensation. Other families take a different path. We, for one, pay our interns what we would pay anyone who does similar work. As one of our past CEO’s stated, “Investing in your investors is a wise business decision.” Internships groom college students not only for their careers, but also for entry into the job market. In our family business, our interns work with our human resource department by filling out applications, going through a formal interview process, and receiving coaching along the way. Once the work is finished, each intern presents their experience to the family at the next annual meeting.
These high school and college programs do work to spark interest in the family business from the twenty-somethings. However, the question becomes: How do we maintain that spark in our young adults, our post-grad family members? Will they eventually return to work in the business? Will they want to retain their inherited investment in the family legacy? There are many examples of how to make this happen from successful business families.
To make sure these young adults attend the annual business meeting, make sure the meeting is scheduled at a time when they can attend, most likely a weekend so they do not miss work. To further encourage attendance, pay their expenses even if this is not done for all family members. What do our young adults need to know? Ask them! Form a post-graduate family forum. Such a forum could be an ad hoc committee of the family council. Provide breakout sessions at the annual meeting focused on their concerns. Some topics that professional advisers can address include: wealth management, financial planning and family business ownership, and pre-nuptial agreements. Other ideas include how to set up family finances, how to buy a car, or how to buy a home. The goal of such sessions is to prevent a mentality of entitled owners by cultivating a culture of responsible ownership that stewards the family legacy.
Some family businesses assign keeping track of these young family members to the human resources department of the business. One way to fan the flame of responsible ownership is to encourage and support your young entrepreneurs. Such support can come from a family bank or family foundation. We use the company of one young family entrepreneur to print t-shirts and other logo items given out as gifts at our Annual Meeting. To continue interest in the family business after internships, we encourage participation on the family council. Participation in regional family business workshops and seminars that provide a focus on the Next Gens is an invaluable cultivation source for business families.
In summary… Celebration. Communication. Cultivation.
To ignite a lasting spark in the 15 to 29-year-olds, our business family Next Gens require all three of these strategies. To grow into owners with deep appreciation for and pride in the family business, each family member needs to have meaningful encounters with each other and with the nuances of the family enterprise.
Elders pass on the family legacy, but it is the Next Gens who receive it and grow it.