A family business is at its most vulnerable when control passes from one generation to another. Conflicts can arise between younger family members who may have less interest in the business or who may wish to take it in a different direction. This is a very real issue for GCC family businesses – a recent study by the accountants PwC found that 60 per cent of the businesses surveyed were transitioning from second to third generation leadership.
Managing the “generation game’”is something that all family businesses will have to address at some point. Older generations who have built the business up over a number of years face the challenge of a younger generation who have often been educated abroad and have returned with new ideas from a different culture.
Add to this the complication of different attitudes and expectations exhibited by people from the so-called “millennials” (those born between 1980 and 2000, also known as Gen Y). This is the generation that has grown up with technology and seems to always be “connected”. They are said to have unrealistic expectations from work and are unwilling or unable to settle – switching jobs and interests frequently. They are also often regarded as a selfish, self-regarding generation with “let me take a selfie” as their catchphrase.
While the attitudes and behaviours of the younger generation can sometimes make them seem to come from another planet, their core psychological needs and beliefs are not so different to those of preceding generations. For example, Sarah Sladeck in her book Knowing Y: Engage the Next Generation Now, revealed that among millennials:
• 92 per cent believe that business success should be measured by more than profit
• 61 per cent feel personally responsible to make a difference in the world
• 50 per cent want to start their own business, or have already done so
Although this research was conducted in the US, there is no reason to believe that Gulf millennials are any different, especially as so many have been educated in the US. These traits should be a sign for optimism within the older generation of family business owners, echoing as they do the underlying beliefs expressed by so many Gulf Arab businesses.
So if the underlying attitudes are similar, why do they appear so different and why are they so hard to bring millennials into family businesses? I think this is because they have grown up in a world that has offered them opportunities and experiences that were not available to previous generations.
This has inevitably shaped the way millennials think. They have lived in a world of social networks so they trust their friends first and their parents second; they actively research prices and opportunities before making decisions and they are suspicious of institutions.
Perhaps the way is to work with the flow of the younger generation’s beliefs. Why not encourage them to experience different opportunities and maybe join the family business at a later stage?
Family businesses can encourage and support millenials to set up their own ventures. Elisabeth Murdoch, the eldest daughter of Australian media tycoon Rupert Murdoch, shunned the family business and set up her own TV company. She was eventually reunited with the family when her business was acquired for $450 million.
It would certainly be beneficial to emphasise the values that underpin the family business and the benefits that it creates. Most family firms see success as being far more than just profits and earnings. They are often also driven by a commitment to their communities and a sense of loyalty to employees who are often treated as an extended family.
So we should not despair at the apparent differences between the older and younger generations. Deep down the generations are motivated by many of the same needs and values. We all want to do something useful and worthwhile. Understanding the way millennials see the world can help the older generation to use their experience and wisdom to create the best succession.
Stephen Brooks is the director at Oxford Strategic Consulting and a specialist in people management and organisational development
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