Developing the Next Generation (NxG) members into competent and empowered “leaders of tomorrow” is extremely vital for the continuity and renewal of any family business. Parents and senior generation family members often want to understand how they can prepare their children for the challenges they will face.
Matt Allen (a faculty member in the Entrepreneurship Division and Faculty Director of the Center for Engaged Learning and Teaching at Babson College), in the article titled “How Parents can promote resilience in the Family Business” (Harvard Business Review, Oct 2022) explains that parents can promote competence and resilience in the next generation in multiple ways.
Internal locus of control is defined as a belief that they can control what happens in their lives, in contrast to an external locus of control – a belief that their lives are controlled by external forces. It can be developed / reinforced in NxG by:
- Supporting active experimentation - testing hypotheses and trying something out to see if it works builds the belief that “I can figure it out.”
- Enabling them to embrace failure – senior generation need to avoid helping NxG with their wealth to “succeed at everything” or to “eliminate failures”. Resilience cannot be developed in the absence of failures.
- Helping them identify multiple solutions to a problem/ response to failure. Asking relevant questions like “what are you going to try next?” or “What is your next idea?” can support a solution-oriented approach to failures.
- Avoiding micromanagement, or, telling the NxG what they need to do or what is right.
Young adults who work for their family business or who choose a path outside the family enterprise might experience self-doubt or lack of confidence. They might often ponder whether the positions and their achievements are earned, or whether they are the result of their family’s influence.
To overcome such type of a challenge, it is vital to enable the rising generation members to actively build their identity capital (Kristin Keffeler, HBR). Effective ways to build one’s individual identity capital are: going to college in a place where your last name may not be known and you can explore interests and talents more freely; engaging in developmental assessments of skills and abilities etc.
(To be continued…)