How to prepare the next generation to take over the family business

By AndSimple 

How family offices can support the next generation during a transition 

It becomes the responsibility of the rising gen to make their own decision. Four ways the family and family office can develop and support rising gens in whatever the decisions they make are: 

Talk about the family’s wealth. 

Next-gens need to understand clearly how much wealth the family has and how much of it they will have access to or manage. Money talk is not just about dollars and cents. At its core, it is about how we view money and our values around it, and how those values motivate our behavior. Ultimately when we speak to rising gens about wealth and financial net worth, we can explore the other capitals of wealth and how they impact our lives. This may influence their choices and beliefs about family as well as business and wealth. Candid conversations ensure a free flow of information and dialogue that almost always benefits the people involved. The more the family talk about money, the more it creates an atmosphere where next-gens can address their relationship with money. This also allows them to make better decisions, avoid critical mistakes, set attainable goals and demystify the subject of money. 

Encourage counselling and therapy. 

In the past, going for counselling and therapy was seen in a negative light, as if a sign of something being wrong. With more and more people becoming aware of mental health and wellbeing, it is imperative to seek the expertise of a trained professional to get assistance in general, but especially through times of transition. Not everyone may need help, but having the guidance of a counsellor makes a difference. At times engaging in therapy even before conflict arises can help the transitional process. Therapy is actually “one of the best methods of preventative health care you can do for your mind and your body before problems get too big,” says Tara Fairbanks, PhD, a therapist in Santa Monica who works with adults and couples. She adds that therapy involves doing intentional work on the most significant areas of our lives, such as “your relationships, your emotional reactions to significant events and life transitions, your patterns of interacting with the world.” 

Collaboration over resistance. 

Money ‘preparedness’ is not an easy conversation, and neither is passing on a business empire that has taken blood, sweat and tears to build. The process itself must be managed as if a collaboration, where all generations bring their unique voice and viewpoint to the table. When everyone meets with the intention to work together, there is a higher likelihood of success than when there is resistance from one part. Family cohesion is the key to the efficiency of almost every successful family business and family office—especially those who make it to multi-generations. Cohesion occurs when a group feels connected and driven to achieve a common goal. While cohesive families are often made up of people with diverse talents and, at times, different backgrounds, what ties them all together is a strong sense of identity drawn from the family history and heritage itself. They share values, goals, and processes. In a sense, a cohesive family can be likened to a group of fans supporting and cheering for the same sports team—all working toward a collective win. 

Ownership and stewardship. 

Most people born into wealth ultimately, often by default, become the inheritors of wealth. As we have explored in the beginning, this reluctance to the inheritance can be a cause of rejection, conflict, and negativity. One of the key lessons that may change the feeling or attitude towards inheritance is starting to engage with the next generation as stewards. Stewardship refers to a proactive desire to create a better future for the family as a collective and individually, taking responsibility for their actions and future choices while responsibly balancing the needs of others, society, future generations, and the environment. Stewards in the rising generation are rooted in the belief that the only way to create sustainable personal and family success is to address the needs of the whole family and understand these needs appropriately.