Anas Iftikhar

Induction Of Next Generation Into The Family Managed Business Family business owners envision the next gen joining the family business and taking it to the next level, yet transforming this vision into reality presents significant challenges. Evolving sociocultural landscape necessitates adjustments to traditional family induction methods, particularly as entrepreneurship gains prominence and accessibility due to factors like venture capital and digital innovation. Additionally, returning foreign-qualified children face hurdles in adapting to both educational gaps and differences in business practices between home and host countries.   Acknowledging these changing dynamics, founders must prioritize early engagement of next gen with family business and work on creating quality relationships. Close relationships and communication help parents appreciate their child’s natural inclination, personality traits and strengths. Parents can work on using these insights to shape children for future roles.   Introducing children to business at a young age stimulates observational learning, which is an excellent method for transferring the intricacies of business without the need for verbalization.   Children grow up idealizing their father: however, they also aspire to prove themselves independent of their father. While the next generation craves freedom to grow and carve their own path they also want to be nurtured. This duality is challenging for both the father and next gen. Often the combined role of the father and founder adds complexity to this dynamic.   Next generation should realize their role is not that of consultants or advisors. During the initial days, they must resist the urge to advise their fathers on areas of improvement and instead, focus on developing a holistic understanding of the business. They may share their input as they gradually gain influence within the business.   The first step to induction requires the next gen to join the business with an open mind. Humility, curiosity and a willingness to learn are essential qualities seniors expect and value from the next generation. Seniors bear the responsibility of sharing the business’s evolution, encompassing its challenges, sacrifices, and struggles, with the next generation.   Next gen watching from the sidelines, often assume they understand how the business works. However, the uniqueness of the business model can only be appreciated once one is actively involved in the business. Next gen often expects seniors to share the ‘secret sauce”, which refers to the competitive advantage or tacit knowledge known only to the business owners. The next gen can learn best by keenly observing and asking the right questions.  Here, they should not expect immediate answers but rather reframe questions if not answered on the first go.   Next gen is advised to join the business with the mindset to unlearn and relearn. While academic knowledge is valuable, it may not always be applied directly to the family business situation. One must be willing to adapt classroom concepts to real life situations. However, this unlearning process can be unsettling for the next gen. In such situations, a trusted non-family employee can mentor the inductee by helping them learn the ropes without fear of judgment or failure.    In a family business one must be prepared to learn from all stakeholders and not just the owners. Employees, suppliers and buyers, all are avenues for getting an insight into the business.   Family businesses face challenges inducting and developing the next gen. If the induction process is smooth it leads to harmony whereas if it is rough it may lead to conflicts. For the growth of the family business, it is imperative that all generations of the family share common values, culture and vision.

A company’s mission is what its leadership wants to achieve. A mission statement is a written articulation for that mission. The benefit of a clear, written mission statement for any family business is that it keeps all generations of the family, along with its suppliers, customers and employees, onboard. It provides a sense of direction to its leadership and gives a course of action to its working team. It also instills a sense of accountability in management for its actions and generates quick feedback on business strategy and its execution. In summary, a well-articulated mission distinguishes a well-run company from a mediocre one. “We want to lower the cost of hospitals and labs by providing high quality yet affordable health care equipment with great after-sales service” This mission statement provides clear guidance to the next generation of a Bohra community family enterprise to build upon lifelong achievements of the previous two generations. If the next gen of this family business embraces this statement, it will instinctively know which products/brands to offer, eliminate middlemen to reduce the extra cost, have quality salesmanship to approach its prospects & clients directly, provide best after sales service, among other things. It will make them accountable for keeping themselves lean, shedding all the extra costs so that they can provide quality products that keep the healthcare affordable to the masses. How to have a great mission statement? The key is to develop a clear mission through soul-searching. Without a defined mission initially, a family business may struggle to withstand generational change. Differences in opinions, attitudes, styles, along with communication gaps can plague a family business, potentially leading to existential crises. Any such business cannot survive generational transition unless the family aspires for something beyond mere money minting. That mission must be magnanimous, noble, as well as commercially feasible. A paradox can be sensed here; however, that’s the first screen a business must pass—it must be profitable. The best way for a business to be profitable is to help its customers achieve what they want. Nevertheless, to survive many decades to come, a business needs much more than just profit. It needs to have a noble mission that helps customers and society in general. Its magnanimity, along with noble intent, keeps the family together by settling mutual differences. Once family leadership succeeds in this soul searching by having a shared mission that fulfills the family, its articulation is a continuous ongoing process. With time, a family will be able to come-up with better ways of expressing its mission and values. Envisioning the mission and communicating it effectively is the sole responsibility of family leadership. Leadership must consistently emphasize its focus in all interactions and meetings. This equips everyone with clear criteria against which every decision made in the business is evaluated. The senior leadership of a family cannot fulfill this responsibility unless they have a broader insight of the economic context of the business, which requires them to have an outside view of their family business.  We at Family Biz Solutions aim to provide such insight so that the family businesses can survive intergeneration succession. Our mission is to guide family businesses toward sustainable growth and harmony across generations. We provide expert advisory services tailored to each client’s unique needs, helping them navigate challenges and create lasting legacies.