Timely exposure to family enterprise and business fundamentals
Family enterprise leaders with aspirations to keep the business in the family need to “find the right time to start building and gauging the interest of the rising generation about being an owner,” suggests Amin Kanji, director, Private Banking, TD Wealth Family Office. “Parents often want their children to pursue their own interests and to not worry about the various nuances of running the family business, yet this can limit the rising generation’s exposure to the business and ultimately their confidence in stepping into the business when the time comes.”
Starting these discussions about future ownership decisions early on is key, and Mr. Kanji recommends that the senior generation provide some exposure to the business as well as key risks and rewards of being a business owner.
“Families should not be shy to introduce some parts of the family business to the rising generation; for example, through site visits, public events, summer jobs, etc.,” he says, adding that adult children can also be encouraged to include fundamental business courses in their education.
“They may not want to pursue business degrees,” says Mr. Kanji, “but taking a few electives in business 101 will be helpful for them to better understand discussions related to the business regardless of what role they will [later] play.”
Mentoring and coaching support purposeful transition planning
Founders or leaders of family businesses are often larger-than-life figures who play key roles in their business and communities, and this can make it difficult for the next generation to “gain the confidence to take a seat at the table,” says Allison Comeau, director, Family Advisory Services, Grayhawk Wealth.
To address this, she suggests a combination of coaching, mentoring and purposeful transition planning.
“Coaching and mentoring can help the rising generation build the skill set and confidence necessary for assuming leadership positions,” says Ms. Comeau. “I also recommend external assessments for family businesses. There are many great tools that allow advisors, coaches and mentors to facilitate an understanding of the DNA of the business as well as the talents young individuals bring to the table.”
Bringing shared purpose and values into the open can create greater alignment between family members, she explains. “Having led by example for so long, parents are sometimes surprised to see that their strong values are already living on in the next generation.
“And such purposeful conversations can also help to recognize the next generation’s competencies and unique potential – for example, in things like marketing, technology or innovation – which can serve to move the business forward.”
Family Enterprise Canada sets the standard of quality for advisors with the Family Enterprise Advisor (FEA) Program. The program is a prerequisite to attaining the FEA Designation, which represents the pinnacle of professional expertise in the field of family enterprise advising.
Advertising feature produced by Randall Anthony Communications with Family Enterprise Canada. The Globe’s editorial department was not involved.