Business management

Family businesses: how to plan for the future

What do we need to know about creating the next generation of family business? Here are our top 10 actionable ideas from the Family Business UK conference.

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Family businesses are a breed apart

They tend to operate, adapt, innovate, and reinvent themselves with the goal of handing the business over to the next generation. Achieving this in challenging times and emerging ready for growth is no small task.

Over 150 family business leaders and next generation successors congregated in the centre of Glasgow at the Family Business UK (previously known as the Institute for Family Business) Conference 2023. They discussed common challenges, sustainability and how to seize unique opportunities at a time of momentous change.

“This conference is all about bringing people together with similar opportunities and challenges and collectively finding a solution. It has huge value,” says our Regional Managing Director, Commercial Mid-Market, Catherine Van Weenan. “It’s about creating a business community. I see the value a lot of members get from coming together.”

How family businesses could adapt for the future

1) Take small steps towards a more sustainable future

With their ambition to ultimately hand over the reins to the next generation, family businesses are already regenerators. By taking practical steps now to tackle climate change, you could also help to evolve a more sustainable future for yourselves and your communities.

Suggested action: Think about how you can be a force for positive change. Consider whether you could set measurable targets for sustainability, for example, or equip the next generation with the tools to meet climate milestones.

2) Think big to future-proof your business

To make significant change requires business leaders to think differently. The challenge is to change mindsets while also ensuring your people come along with you. After all, you can’t have a successful, sustainable business on a planet that’s dying.

Suggested action: Business leaders are the stewards for the next generation. It is an obligation to think big and make change happen. It’s about Influencing the world around us so we can thrive. 

3) Strategically prioritise your change initiatives

The world is changing at a frenetic pace and for many keeping up with the latest technologies can be challenging. Change fatigue is an understandable consequence, but not everyone needs to change everything. Careful consideration of how to allocate investments to take advantage of specific changes can help drown out the noise.

Suggested action: Zoom out to look at the future. Zoom in to see what you’re going to do in the next six months.

4) Understand what’s required to future-proof your business

The next generation will likely have their own thoughts about how a family business should be run. Those who favour new concepts and disruptive approaches may ruffle feathers, but that doesn’t mean they’re wrong.

Suggested action: Small steps are a good place to start for next generation leaders. Rely on the principle of proof of concept. Show the value of your idea and prove your own worth.

5) Learn to digitalise

The fear that automation will ultimately lead to job losses could be countered by acknowledging there will be jobs in the future, they just might be different. The rapidly changing landscape could offer opportunities to reassess your systems and processes, using digital transformation to help you work better, smarter or faster.

Suggested action: Change can be overwhelming. Create policies and procedures that will determine when and where to use automation. 

6) Nurture your role as a business guardian

The goals that drive family businesses aren’t purely centred around profit. In many cases, there is an emphasis on building a company for the next generation to inherit. As a result, many family business leaders see themselves as guardians.

Suggested action: Success is not related to money – that’s the by-product of the hard work you put in. For many, the ultimate ambition is to hand over the family businesses in a better shape than they found it.

7) Communicate your passion 

One of the greatest challenges facing family businesses is retaining the passion and energy instilled in the business by previous generations. If the next generation doesn’t fall in love with the business, then this route to succession might not be appropriate.

Suggested action: As a business leader, be open about your feelings and how you would like to move forward. Make people feel part of something and communicate what you would like to achieve.

8) Write a change management plan

Transitions are an inevitable part of running a family business. “Succession is always on our minds,” said one speaker. Making constructive plans in preparation for change requires vision, forethought and assertive action.

Suggested action: Things to consider before embarking on change include assigning enough preparation time - five years is a good yardstick. Be structured and clear about your priorities and accept this will often boil down to simply securing the future of the business.

9) Re-evaluate company ownership options

There are numerous ownership options open to family businesses. The most obvious and preferrable is succession, but this isn’t always appropriate or beneficial. There are more ownership options than you think – consult an expert to explore the possibilities.

Suggested action: If the next generation doesn’t want to participate or doesn’t have the right skill set, it may be advantageous to bring in a non-family member who can import new skills and insights that the family might not have.

10) Measure your carbon footprint

Like most businesses, family firms face the same key challenge - how to plan sustainably. Family businesses, however, approach it slightly differently because they often plan around longer timeframes giving them an opportunity to make longer-term decisions.

Suggested action: Think about what your business is going to look like in the future. Look at your carbon footprint and how you might shrink it. Connect with others who have already done so and collate examples of best practice.


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