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Faced with the Covid-19 crisis, the generation at the helm of family businesses – and their children too – have had to adapt and cope. Where does the rising generation stand today in terms of its choices and vision of the future? In conversation with Anne Goedert, Family Practice Adviser at Banque de Luxembourg.
A year ago, you conducted a survey among young people in family businesses. What did you learn from it?
"When the health crisis hit, we thought it was important to hear how the rising generation felt. So in July 2020, we launched a survey among thirty or so young people aged 20 to 30 with a range of profiles. They all said that the pressure was enormous and they felt real angst given the prevailing uncertainty. Nevertheless, the study revealed the rapid emergence of a new dynamic. “We discovered that it was also possible to start doing some things differently,” said one participant, who was already working in her family business. Many seized on the opportunity presented by the crisis to embark on new projects, to go out into the field alongside their teams and turn the challenge into a strength.
Has this changed anything in their choices regarding the family business?
Many young people found they got closer to their family and the business during this period. In some businesses, the crisis has even accelerated the process of succession. The Next Gen has seized this opportunity to establish its legitimacy and make its contribution to the entrepreneurial adventure. I remember one young heir describing a moment when his mother said to him: "Go for it, it will all be yours one day. Do what you think is best, I don't have any better solutions than you in this situation.” Ultimately, the crisis has led to a real inter-generational dialogue around family businesses with the result that we’ve all come out stronger.
Where does this generation stand today? Do they have new expectations?
For many young people in family businesses, there is still a lot of pressure to meet the challenges posed by the pandemic. But the experience has made them stronger. "I’ve grown as a person in this exceptional situation," said one participant who already had a position of responsibility in the business. The crisis and working from home have highlighted new expectations about work-life balance. The rising generation often feels that the previous generation gave up everything for the business. But many young people don’t want to repeat the same pattern, at least not at the expense of their private life. "Be there for my children”, "Surround myself with a team that I can delegate responsibilities to instead of having to do everything myself” – these are lines we hear increasingly often.
How can we support the rising generation in this context?
In the life of an entrepreneur, the transfer of the business is an important stage, but it is equally daunting for the successor. The current context has reinforced certain questions, doubts and sometimes apprehensions among those who are next in line to take over.
Through our work with families in business, we understand the issues they face.Anne Goedert, Family Practice Adviser
This is why we have developed programmes to support young people in their decision whether or not to join the family business and in building their career path as the next in line.
“I’m not on my own.” This comment epitomises what we seek to offer the Next Gen in our programmes. The Summer Academy and the Family Business Junior Program offer a meeting point for young people who are in the same situation and allow them to share their motivations, doubts and fears. Discussion is facilitated by direct experience and personal accounts, including participation from representatives of family businesses in neighbouring countries. Meeting other people from family businesses helps them build a network that they will be able to draw on in the future, in harder times, to discuss ideas, support each other and get a fresh perspective.
What about the generation at the helm?
An entrepreneur's wealth is the product of a life’s work, sometimes even of several generations. We work with family businesses to develop their projects, paying particular attention to the family as well as the business. Knowing that the transfer of a family business requires the support of the different generations, we favour a co-construction approach with all the family members concerned. For us, supporting a business leader goes beyond the purely banking or financial aspects. We deliberately restrict ourselves to a limited number of clients so we can work alongside them with personalised private-banking support across the generations. And as a trusted adviser, we will be present at every stage of their life.
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