The Importance of Fresh Blood in Your Succession Plan
When one thinks of generational differences, particularly in the context of a family business, it can be easy to think of these as a negative; as the seeds of corporate conflict. But looking back on my own childhood and the early years of my adult working life, I now recognize that a family business is strongest when it can successfully balance honoring long-held traditions with leading change and innovation. For us, the ability to strike this balance comes mainly from the fact that multiple generations were working—and living—together.
Studies by consultants such as McKinsey and BCG show that family businesses regularly outperform their competition over the long-run. This was certainly the case for my 100-year-old family business in Bristol, England, where we successfully outperformed our public company competitors for generations in sales performance and customer satisfaction.
Because my family’s enterprise took a longer-term view regarding capital investment in the business, as well as the timeframe for getting a return on that investment, we had better locations and facilities. But, as I often tell the attendees at my succession planning training seminars, there are many ways to take advantage of the generational differences that exist in a long-running family business. Here are my top four.
Market Knowledge + The Millennial Voice
Much is being made of the current “marketplace knowledge transfer” that’s happening now, as retiring Boomers hand over the reins to their Millennial and Generation Z successors. I get a lot of questions about this at my succession planning training seminars—and, while I do understand the preoccupation, I always tell them not to worry. Why? Whether yours is a public company or a family business, the torch is being passed as we speak, little by little.
But despite the value of the knowledge base that previous generations have meticulously built (and built upon), the world that Millennials and Gen Zs are inheriting is a different one—and the succeeding generations are already the experts. They understand and embrace emerging technologies and terminology; they are fluent in the latest social media platforms. And, perhaps just as importantly, they’re active consumers in the ever-changing marketplace.
This has always been the case in my own family business—a large Ford dealership, selling new and used cars in the local market. When my father and grandfather wanted feedback from a younger generation of drivers about advertising and marketing in the local media, they turned to my high school and college friends. I can remember so many dinners, both in our home and out on the town, that turned into informal (but very informative) focus groups.
Successfully Challenging the Status Quo
One need only have a cursory re-listen of The Who’s seminal hit “My Generation” to understand that challenging perspectives is what the incoming generation has always done best. In my view, the sooner we decide to “dig what they all say,” the sooner we’ll be on the brilliantly lit path to inter-generational success.
With this in mind, a few years ago, I took the advice of a younger staff member who recommended moving almost $1M in advertising from traditional media (press, television and radio) to a marketing strategy that included a new website, a stronger presence on online platforms such as Autotrader and a strong social media presence on Facebook. We also employed two people to specifically work on our CRM strategy, building our loyalty base with personalized letters as a service follow-up, and with sales offers to existing customers.
All of this is commonplace in today’s market, but at the time it seemed radical to our older executives. The best part about challenging our status quo was our new strategy enabled us to more easily measure the results of our marketing spend—and therefore better understand how our budget for the dealerships was best spent to drive sales and ROI.
Injecting the Long View with Urgency
Another benefit I often mention in my succession planning training seminars is the younger generations’ ability to push through much-needed changes in products, services and processes. This prevents the business from becoming outdated or out of touch with their customers and falling behind the competition in terms of customer service and innovation.
I remember working with my sales manager, Louise, who I had recruited and trained, to help me change the sales process for our main Ford dealership in order to make it more customer friendly and efficient. The idea was that you could be in and out of the dealership in an hour when buying a new car, rather than the traditional 3–4 hour marathon.
Now, this was easier said than done; we were dealing with an established culture, where “we’ve always done it that way” was the dominant paradigm. The idea we were implementing was taken from a very successful Ford dealership I had worked for in the U.S., so I knew it would work—but we needed to convince the older and more experienced sales managers who were somewhat set in their ways. Louise’s youthful enthusiasm, along with her well-established competence, helped to win over the nay-sayers and get the new process off to a strong start.
Moral Compass That Boosts Morale
In 2020, Millennials officially became the dominant generation in the global workforce—and they’re about to change the way your company approaches charitable giving, forever.
As a family business, we were always able to connect and contribute to local charities and causes that were important to our employees and their families. This was because we had a long-term connection with the local community, where we all grew up—and also because It was more important for us to have customers for life than to focus on short-term profits.
But if your company is currently stuck in the old-guard mentality, either contributing nothing or making a small donation to the CEO’s pet charity, take heart. Why? Because despite lower salaries and higher student debt than previous age groups, Millennials are already on track to be the most generous generation in the history of the world. Studies suggest that more than 80% of Millennials make charitable donations every year. They’re giving more in terms of dollar amount, too—despite the fact that they haven’t yet capitalized on the $30 trillion wealth transfer they stand to receive from their successful Boomer parents.
But they’re also much more creative about giving than previous generations, going beyond the traditional avenues of donating and volunteering. In addition to time and treasure, Millennials also leverage talent (using their expertise to benefit a cause), voice (advocating and educating on behalf of a cause) and network (leveraging personal and professional relationships to forward a cause). For your family business, this generational shift may give you the ability to make a real impact in your community—one that’s meaningful for all involved.
As someone whose own family business experience was heavily dominated by old-guard mentality, I can say with utmost confidence that the “fresh blood” of a generational reset likely saved our enterprise from stagnation and eventual ruin. Each of us is shaped by the unique circumstances of the generation into which we were born—and each of us, as a result, has something unique to offer. Learn to appreciate the distinct values of your company’s next-gen leadership, and you’ll be perfectly poised to succeed many generations into the future.
Here’s to Your Business Success,
Richard J. Bryan