How to prepare the next generation to take over the family business

Is the next generation prepared to take over the family business and with it the family wealth? What do you do when they are not? What to do when they are?
next generation transition

What you need to know

  • Family offices everywhere see a huge number of businesses being passed from one generation to the next, and even more so over the past two years, due to the Covid-19 pandemic.
  • Business transitions are common amongst family enterprises, viewed as an accepted circle of life where the rising generation takes over from the previous one.
  • Preparing the next generation to take over isn’t necessarily a difficult process, but for it to be successful, there are some key questions to answer first. Before asking if they’re prepared to take over the family business and wealth, it’s worth asking if they actually want to. And a question many families have had to grapple with is what to do if they don’t?
  • There could be many reasons that an heir doesn’t want to take over from their elders, but this doesn’t have to mean the end of the family. To protect the family from unexpected upsets, there are a few steps they can take to engage with the next generation successfully, even before the discussion about succession begins.
  • All of this can help mitigate the effects of a member refusing to take over, and in some cases might even help prevent it.
Governance Updated on October 21, 2022

In the seeming age between 2020 to 2021, many families have been navigating handovers from one generation to another. There could be a number of reasons for any next-generation transition, but over the past two years, many have been brought about by the ongoing pandemic, while others from the simple recognition that it’s time for a change.

Does the next generation want to take over?

Whatever the reason for the handover, one of the biggest elephants in the room is the question, “Do the next generation want to transition into the family business or family wealth?” The assumption that it is their birthright and they must take over has been a long-drawn conclusion for most families. Conflict arises when they realise that the next-of-kin wants to remain kin without the trappings of responsibility. With family dynasties, this causes a lot of anger and heartbreak, leading to many misplaced assumptions about what is the right and wrong protocol. To some extent, this can also lead to anger about entitlement and what a family member believes they’re due. However, one of the startling realities we have learnt from the rising generation is the need for self-actualisation. Many of them want to have their own identity beyond that of the family, which means that they want their own legacy, achievements and life outside the perceived chokehold of their family name and wealth.

About the Authors

Tsitsi Mutendi

Tsitsi Mutendi

Succession & governance

Tsitsi is an award-winning entrepreneur and consultant for family business and offices. As a third-generation family business owner, Tsitsi has extensive experience in international business and family business dynamics.

Connect with Tsitsi Mutendi

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