The next generation brings a fresh set of opportunities and challenges. By navigating these we can … [+]
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The greatest wealth transfer in history has already begun. According to Accenture, it will continue for the next three to four decades, placing some of the world’s wealthiest family empires firmly in the hands of the next generation.
Throughout this process, family business leaders of the baby boomer generation are seeking ways to not only sustain their legacies after decades of work but also ensure that the next generation heirs are poised to take the reins successfully.
To achieve this requires engagement that not only helps to communicate the core values of the family business or family office, but also encourage future heirs to take an active interest in the company on more than just a superficial level. These five tools can help families to achieve this.
The next generation, regardless of their current ages, are digital natives. Part of engaging them with the business and the greater values that underpin its operations can be achieved through the design and implementation of software stacks and private apps built with this in mind.
The use of digital media and family office software enables this generation to enhance their interactions, communication and collaboration with the business and other family members involved in ways with which they’re most comfortable. What’s more, certain programs and varying levels of access to specific systems within the business can also be used to enable transparency and information sharing that builds trust, engagement and inclusivity.
Software and apps can also be used to engage the next generation through interactive learning and training. Programs can be developed to move individuals through various aspects of organizational processes, initially covering the fundamentals and later building to more complex strategic and investment education. In this way, virtual simulations that draw from actual company data can be used to give future heirs a real-world feel and hands-on experience.
Family office software and apps will never replace the human touch and necessity of face-to-face communication with other family members and organizational stakeholders. However, with increased demand for remote work supported by digital tools, they can be powerful engagement tools when used strategically.
2. Conferences & Events
While traditional family office conferences are generally not geared towards the next generation in any way, this doesn’t mean that the value of attending conferences should be overlooked. When considering conferences as a next-generation engagement tool, events like SXSW, Design Indaba, various impact conference-festivals like Norrsken or tech conferences like Tech BBQ can be exciting and inspiring environments.
A vast number of topics are covered at these events. Depending on the conference, these may include everything from business and financial issues to softer factors that the next-generation, even those without much exposure to the family business, may find interesting and helpful.
What’s more, these events enable the next-generation to connect with their peers, making them great networking opportunities. Connecting with people of similar ages and with shared values, helps to foster a sense of community as ideas and related experiences are shared. All of this can contribute to excitement at the prospect of getting more involved in various aspects of business and even open up new avenues of possibility within the greater family business.
3. Retreats & Breakaways
A growing body of evidence suggests that unlike previous generations who have valued possessions and ownership, Millennials and Gen Zs value experiences and transformation.
To tap into these values, families can organize retreats for the next generation that take them on a journey. This may include various activities from exploring the origins of the family business and its values to the factors that lead to its growth. The challenges faced, how these were overcome as well as the future aspirations for the company and family members involved may also be discussed.
These types of fully immersive experiences, set in unique and memorable environments, enable the different family office generations to communicate, collaborate and share in an unforgettable and engaging experience and a journey that continues well beyond their return from the retreat.
Similarly there are also opportunities for the next-generation to enjoy retreats with peers of similar ages. Companies like Beyond offer an immersive growth experience for next-generation investors with a sense of wanderlust and curiosity for innovations that will shape our world.
The organization facilitates international journeys that encompass meetings with inspiring entrepreneurs, resourceful innovators and visionary world leaders. Attendees are not only taught how to identify attractive investment opportunities, modern technologies and social enterprises that are sustainable, impactful and profitable, but are also inspired to explore their talents, passions and purpose within the family office — guided by both experts and their next-gen peers.
4. Family Foundations
At the core of millennial and Gen Z is transformation. The Deloitte Millennial survey revealed that 46% of the respondents were more attracted to making a positive impact on their communities or society at large than in having children and starting families of their own (39%).
With this in mind, family foundations provide an effective way to introduce the upcoming generation to the family’s values, mission, philanthropic activities and investments. These arms of the organization enable even the youngest family members to get involved at an early age and becoming increasingly involved over time.
Such programs not only engage the next generation in activities that are naturally of interest to them but also prepare them for the responsibilities that accompany significant wealth and continue the family’s legacy.
5. Sustainable and Impact Investing
According to the 2019 Global Family Office Report, the next generation and millennials, in particular, are contributing to the rapid adoption of sustainable investing. The report’s statistics show that 34% of family offices are engaged in sustainable investing, while 25% of global family offices are involved in impact investing. Both are expected to increase with the great wealth transfer.
With these types of investments offering market-related returns and capturing the hearts and minds of the rising generations, they serve as great engagement tools that can be aligned with the organization’s higher purpose and goals.
Engaging the next generation does not have to wait until they’ve fully come of age and are ready to run the family business or office. This is a process that can start in the formative years and, when using the tools at the organization’s disposal, can be strategically planned and executed, empowering heirs for successful successions in the future.