To provide guidance and suggest solutions to ensure the strategic and successful management of intergenerational transition in family businesses.
Do you want to secure the future of your business by systematically training the next generation and integrating them into your current structure and goals? How do you prepare the next generation to take over your family business?
Suppose this is what you are looking for in this post. In that case, I will share my thoughts—based on my experience—on preparing the next generation of leaders in family businesses and how to overcome the common challenges faced during this process.
Who knows? The real-life example I’ll share at the end of this post might give you a new perspective on this topic.
The young representatives of the next generation, who will take over the management of companies, will have a different makeup compared to the founders or the active generation, and it is not guaranteed that they will achieve the same level of success. They may be more successful, or they may fail.
In family businesses that aim to continue their activities for generations, shareholders actively involved in today’s management need systematic approaches to make visible the potential risks of failure that future generations of shareholders might face when taking the company forward. It is a standard risk management approach.
They often rely on traditional methods to prepare the next generation for business. Standard practices include bringing their children to work from a young age or spending time with a professional they admire (often someone they connect with). While these methods may work, they may need to catch up when preparing a successful leader for the future.
Adopting a more holistic and strategic approach is essential when raising a company’s future leaders.
Can the systematic approach required to prepare the children of a family with an industrial-focused business for the future of their company be the same as that of a family with a marketing/brand management-focused business? Or a family with a technology-focused business?
If there are sectoral differences, can they be the same? What if there are differences in future goals, family structures, or the talents/potentials of the children?
Could the main reason behind the low rate of successful generational transitions in companies—a statistic that scares many family business shareholders—be that these preparations are not planned and implemented systematically and on time and that the family does not fully embrace this understanding?
Every family must prepare for this issue with a system that suits them.
Imagine the young representatives of the next generation, who are expected to take on active roles in their family company or group of companies and have been sent to an international trade fair to gain experience. Upon their return, they are expected to observe global trends related to their current business and present their insights, assessments, and suggestions for the future.
Young representatives attending the fair on behalf of an industrial-focused business group are expected to focus primarily on new technologies that can improve existing production processes or opportunities for horizontal integration with their processes. Therefore, the trade fair visit may focus on exploring new sources of raw materials or investment opportunities in new production facilities that can add more value to the products they manufacture. The primary goal is to identify strategic partnerships and innovative solutions to enhance the company’s competitiveness in the industrial sector.
Young representatives attending the fair on behalf of a marketing and brand management-focused business group will primarily focus on positioning their brands in international markets. These representatives are expected to explore new distributorship opportunities and take steps to ensure the representation of their brands in specific countries or regions. For a company aiming to grow in Europe, establishing new business partnerships suitable for the European market and increasing brand awareness may be a priority. However, these representatives will focus more than just taking their brands to the international stage. Still, they will also explore potential new brands to add to their portfolio and evaluate strategic opportunities, such as acquiring companies that own these brands or securing their distributorship rights. Thus, during the trade fair, they will have a chance to strengthen the power of their existing brands and expand their market presence through new investments.
Young representatives attending the fair on behalf of a technology-focused business group will primarily focus on discovering innovative technologies such as industrial automation and software solutions. These representatives are expected to evaluate automation solutions that can increase efficiency in production processes, analyze software that facilitates machine-to-machine communication, and keep track of the latest trends in this field. However, their trade fair visits will include more than discovering these technological innovations; it is also essential for them to develop strategic partnerships to integrate these innovations into their production processes and gain a competitive advantage. In this process, the young representatives will follow the latest software trends and innovative approaches in the industry, as well as evaluate potential business partnerships with companies providing these solutions to strengthen the technological infrastructure of their company.
These different business group expectations determine which goals the young representatives should focus on during the trade fair and which opportunities they should evaluate. However, the main question is how they should be prepared to meet these expectations.
Is it sufficient to send these young representatives to the trade fair on behalf of these different business groups based on the professional education they have received without a systematic preparation process? Or would it be more effective to prepare these young representatives by putting them through a structured preparation phase in specific areas before sending them to the trade fair so that they can respond more appropriately and effectively to the particular expectations of their business group? The answer to this critical question is of great importance regarding the quality of the results obtained after the trade fair and the suitability of these results for the business group. Now, let’s look at how to tailor the preparation of these young representatives to meet the specific expectations of these different groups.
For example, young representatives attending on behalf of an industrial-focused business group should:
Before attending the fair, they must have been trained to have in-depth knowledge of the subjects. This preparation cannot be achieved by starting a few weeks before the trade fair. It requires a systematic approach and preparation. For example, young representatives attending on behalf of a marketing and brand management-focused business group should:
Before attending the fair, they must have been trained to have in-depth knowledge of the subjects. This preparation cannot be achieved by starting a few weeks before the trade fair. It requires a systematic approach and preparation. For example, young representatives attending on behalf of a technology-focused business group should:
Before attending the fair, they must have been trained to have in-depth knowledge of the subjects. This preparation cannot be achieved by starting a few weeks before the trade fair. It requires a systematic approach and preparation. Since this issue is important and requires proper preparation, how should we prepare? I will address this topic in my next post.
Disclaimer: Some of the content and images on this page have been produced or developed using artificial intelligence (AI) technologies. AI has been trained within the framework of the intended subject before creating content to ensure accuracy and relevance in the generated text. Even though AI interpretations may not always accurately represent real-world scenarios or truths, readers should know that the published articles have been approved through the editorial perspective of Orhan Erkut. Please consider this information when interacting with the content and images on the site. Click here for detailed information.
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