Setting Next Gens up for Success: Preparing to Work in the Family Business
Throughout 2022 and 2023, the Family Enterprise Legacy Institute (FELI) at the Telfer School of Management and the Family Business Network (FBN) are partnering to deliver the NxG Legacy Forums — a series of eight panel discussions addressing the key questions for next generation members of business families. Topic questions for the forums have been selected from a new book, Enabling Next Generation Legacies: 35 Questions that Next Generation Members in Enterprising Families Ask, by Telfer professors Peter Jaskiewicz and Sabine Rau.
In career planning, it is important to know where you ultimately want to go, and the steps for how to get there – in essence, figuring out how to set yourself up for success. For next generation members who want to join the family business, however, this path is not always so clear. Every family business is different and has their own rules and processes – although sometimes these haven’t been well defined. This can lead to the question: “How can next-generation members prepare themselves in the long run before joining the family business as a manager?”
This topic was the basis for discussion at the third of eight events in the NxG Legacy Forum series. The event was moderated by Telfer’s Peter Jaskiewicz and Sabine Rau, with panellists Alexandra Heraeus of Heraeus Holding and Vincent Chian of Fairview International School, both members of enterprising families.
Starting at a Young Age
For Alexandra Heraeus, preparing to become an active member of the shareholder family started at a young age. She found herself lucky that her father involved the children in the business in different ways. “Additionally to the opportunity of doing internships, he talked about the business (at home) …and would occasionally take me for business trips to see operations in China and India,” Heraeus explained, adding that it gave her a great view especially on the values of the company.
Another key way Heraeus prepared for building her knowledge around the family business was simply through showing up. For Heraeus, this meant attending anything the shareholders had scheduled, including events and shareholder meetings. She recalled an interesting event from her past, when she was 12-years old and was disappointed to miss a friend’s party because of a shareholder meeting. But over the years, she has found it valuable to nurture a mindset of these meetings not being something to think about going to, but instead to just go. “Being there and showing the commitment,” she said, adding, “it’s the base for everything.”
An important way Vincent Chian and his siblings have prepared themselves to be leaders in the family business has been through first learning to follow. “One thing my father always said was to be a good leader, you need to be a good follower first,” he explained. One of the ways this wisdom has imparted on him and his siblings was through the family business rule that everyone joining the business starts at the bottom. For Chian, this meant starting out as a biology teacher, despite the significant psychiatry training he already had. “We all started out being teachers, no short cuts,” he said. “Everyone needs to spend a few years on the ground.”
Other family processes that helped Chian prepare for joining the family business include a policy that all members have to complete an MBA and participate in the Family Business Network (FBN). Listening was also an important element in preparation, with Chian sitting in on all leadership meetings to observe and listen. “You don’t understand how important these sessions are until 7 or 8 years later,” he added.
Learning one step at a time
As a large family business, with 200 members as shareholders, Heraeus’ family have many next generation members to potentially involve in the company. Heraeus explained that to nurture the interest and intensify family bonds, the family has developed different events and activities each with their own focus. For example, for members aged 14-25, there is a yearly event schedule for younger members which helps them better understand the inner workings of the company and what it means to be a shareholder. This involves having sessions on explaining the basics of the company in more detail, going through the technicalities of a shareholder meeting, and helping develop useful and relevant skills, such as public speaking.
In Chian’s family, the learning process for new entries to the business involved several different stages, which included being part of a small group who would work on every aspect of the company, building important management competencies. The group of seven would, “get deployed all over and thrown into the deep end on many areas,” he explained, gaining such skills as operations, finance, marketing and sales.
Another stage was being given a project to lead, however as Chian put it, “with a lot of rope.” His father would always be close to advise and give suggestions. “You could mess up,” he said. “This was where you learned about your leadership style. It prepared us to lead well.”
The art of being muddled…and other insights
Other valuable lessons and tips from both panellists were shared, such as, for Chian, having professionalism, mastering a craft, and also developing networking skills. He also added that the Mandarin saying nande hutu – or ‘the art of being muddled’ – has saved him many times. As he explained, although there is no direct English translation, it is an idea rooted in having tact and humility.
Heraeus found that breaking complex shareholder problems into smaller pieces was a great help and maintaining a belief that even the most difficult concepts can be understood through taking time to learn and ask the right questions. “You need to believe in yourself that you will tackle it,” she added.
NxG Legacy Forums
The topic of wealth and family offices was up for discussion at the second NxG Legacy Forum, including advice and insights into the importance of a long-term view, the need for education, and taking the time to do things right.
Find out what happened at the first NxG Legacy Forum when Next Gen members shared their views on how to work constructively with family members in a business.