What is the impact that different generations have on business succession? The Family Firm Institute found that 88% of current family business owners believe the same family or families will control their business in five years. Succession statistics contradict this belief. The data suggests about only about 30% of businesses survive into the second generation; 12% are still viable into the third generation; and very few, 3%, of all family businesses operate into the fourth generation or beyond.
Thomas Deans, author of Every Family’s Business suggests that gifting your business to your children can damage it as well as undermine family relationships. It seems there is little to support the wisdom of passing on the business to junior (him or her).
While most multi-generation/business succession dialogue is from the perspective of the impact on business and family, future owners, regardless of their generation, need to consider how to engage and inspire different generations working together. How will a Boomer feel about working for a Millennial? A Millennial for a Gen-Xer? What strategies will savvy organizations use to attract, retain, and engage their workforces?
We’re all seeing evidence of the evolving office; flex hours, remote offices, cells rather than landlines. Some of this makes sense given changing needs of employees and the enabling impact of technology. However, some attempts to inspire and attract employees might be more optics than substance; pets at work, bean bag chairs, and foosball tables (apologies to all of those companies I’ve just offended) sound like table stakes for enlightened companies, but are they really what employees want?
According to a Harvard Business Review article by Jacob Morgan, games and off-site events are transitory fun – they don’t last. Employers need to “allow employees to have an impact on their cultural, technological and physical environments.” Employees still want*:
- Their voices to be heard
- Opportunities for advancement
- Fair compensation, both money and benefits
- Feedback that is growth-oriented, acknowledgement and constructive criticism
- Opportunities for learning and development
As owners consider business succession, they need to address the cultural impacts in the multigenerational workplace. Doing that now will mean higher value when succession does occur, and an increased likelihood of success for the new owners. And this isn’t just about the money; research suggests legacy is extremely important to owners exiting their businesses. For new owners, regardless of what generation you come from, understanding the common elements that all employees need, and balancing those with what’s important to them individually, will help you get and retain more than your fair share of the best talent.
*The Achievement Centre tracks employee perceptions on these and other topics with its CORE Engagement survey. Contact us for more information on how you can use this tool in your own business.