Globally, there are no shortages of courses available for the next generation members of a family business. Indeed, it can be argued the focus on the next gen has never been greater. But has this been at the expense of the senior generation?
Ken McCracken, head of family business consulting at KPMG in the UK, thinks so. He reckons the role of the senior generation has not been adequately looked into from a family enterprise perspective. “We’re worried about the adult development of the senior generation,” he says. “The needs of people in later life isn’t been properly addressed, which in the context of a family business will become a major issue for the timings of transitions and transition in general.”
“You’re going to get many members of the next generation saying: ‘I could be in my 70s before I get any chance of running the family business’”
McCracken says, despite this lack of knowledge, the role of the senior generation within a family business is going to assume much more importance in the years ahead. “Everything is pointing towards the 100-year life,” he says. “The concept of retirement just doesn’t have any meaning anymore.”
The strategic way in which a family has to allocate their resources needs to be taken account of in this context, says McCracken. There needs to be a way of finding a purposeful and meaningful life for the senior generation beyond their active role within the business. “But I don’t think we’re at the races with this yet,” he adds.
Of course, the role of the senior generation within the 100-year life concept also has profound implications for the next generation, adds McCracken. “With the 100-year life becoming a reality for many, you’re going to get many members of the next generation saying: ‘I could be in my 70s before I get any chance of running the family business’.” That will lead to a whole other set of issues, says McCracken.
He adds: “They (the next generation) are the most educated, experienced, and probably willing generation of heirs and heiresses that we’ve ever known.” But many of them won’t get to exercise real power within the family enterprise for many years after they’ve gained all this expertise and experience, if at all.
Given the growing importance of framing a narrative around the senior generation within a family business, McCracken and KPMG have embarked on a project to find more about their role and how this all interacts with their businesses. “We want to shine a light into this area that hitherto hasn’t been given enough attention by family businesses, nor, indeed, the advisory community.”