By Danielle Walsh
We have all heard statistics stating 67 per cent of family businesses won’t make it to the second generation and 88 per cent won’t make it to the third. (For more, see the fourth edition of Family Business by Ernesto J. Poza and Mary S. Daugherty, published by South Western Cengage Learning in 2014.) One of the contributing factors to these dismal numbers lies in the fact the next generation’s inability to manage or lead the business.
Should I go back to school? Dad, will you tell someone to mentor me or can you do it? Who is going to teach me sales and finance? These are questions I often hear from next-generation successors who are aware they don’t have the skills to lead. More importantly, they want to acquire these skills but aren’t sure how to go about it or what type of training or education will help them the most.
Family business owners often think their children should be able to gain managerial and leadership skills from simply being around them and the business for years—as if through osmosis! However, this is not the case. Potential successors and current leaders of the family business alike need to be committed to the grooming of the next generation.
In an article entitled “Next in line?” from the October 2016 issue of Jewellery Business, I explained how to develop an effective grooming plan. However, it did not cover the types of learning activities that can be part of the grooming plan. There are a number of options, including:
- in-house training;
- university;
- corporate training; and
- mentorship.
Is one method better than the others? I believe a mix of all of these options is typically best.
To illustrate my point, I will use Sophie, a next-generation successor who has a degree in commerce (with no specialization) and wants to make it into management and eventually ownership at her parents’ jewellery store. She worked for two to three years in an office, where she was part of the human resources (HR) team. As I walk through the various learning activities, I will examine what might be best for Sophie.
