Five approaches for engaging the next-generation
For many family offices, succession is the most complex and significant challenge faced over the course of their life cycle. Next-generation engagement is fundamental in ensuring that their legacy continues well beyond their tenure. But intergenerational wealth preservation is not a one-way street. Family leaders embrace change to ensure that their operation is desirable to the next generation. Here are five approaches to facilitate next-generation engagement.

By Francois Botha
Published on Simple November 16, 2020

The greatest wealth transfer in history is already underway and will continue for the next three to four decades according to Accenture. Some of the world’s wealthiest families are already placing their empires in the hands of the next generation and subsequently transforming the private wealth space.

For families looking to create as seamless a succession as possible, next generation engagement should start early. When using the right combination of approaches as outlined above, succession can be strategically planned for and executed – ultimately empowering the next generation for a prosperous future.

Leaders of the baby boomer generation are aiming to sustain their legacies by ensuring that the next generation are poised to take the reins. But intergenerational wealth preservation is not a one-way street. Family leaders must not only deal with the tasks typically associated with engagement and succession, but also adapt their operation to ensure it is desirable to the next generation.

By adopting a curious approach and exploring new frontiers such as health & wellbeing, families can embrace change and transform themselves into a future-fit organisation. These five approaches can help families to achieve this.

1. Going digitally “native”

Regardless of whether they were born in 1978 or 1990, the next generation are more digitally savvy than any generation before them. Their connection to digital is intuitive and plays a constant part of their daily lives. Through implementing software stacks and apps in your daily operations, family leaders are able to too become ‘digitally native’ – and speak in a language that the next generation understands.

The use of digital tools and software enables the next generation to enhance their interactions, communication and collaboration. They are already lightyears ahead of the original vision of ‘going paperless’. Advanced data analytics, artificial intelligence and machine learning are fast becoming the norm in the business world of today. As the next generation leaders will begin their tenure in the rapidly evolving environment, they need to be equipped with agile working styles and tools from day 1. In the near future, most business operations will have gone ‘virtual’ with technology doing the heavy lifting. As a result, business operations will be structured around dynamic workstreams with leaders making ‘at a glance’ decisions based on data. This embedded use of technology will further allow the next generation to professionalise operations which are resilient and able to compete on a global field.

The greatest wealth transfer in history is already underway and will continue for the next three to four decades according to Accenture. Some of the world’s wealthiest families are already placing their empires in the hands of the next generation and subsequently transforming the private wealth space.

For families looking to create as seamless a succession as possible, next generation engagement should start early. When using the right combination of approaches as outlined above, succession can be strategically planned for and executed – ultimately empowering the next generation for a prosperous future.

Leaders of the baby boomer generation are aiming to sustain their legacies by ensuring that the next generation are poised to take the reins. But intergenerational wealth preservation is not a one-way street. Family leaders must not only deal with the tasks typically associated with engagement and succession, but also adapt their operation to ensure it is desirable to the next generation.

By adopting a curious approach and exploring new frontiers such as health & wellbeing, families can embrace change and transform themselves into a future-fit organisation. These five approaches can help families to achieve this.

1. Going digitally “native”

Regardless of whether they were born in 1978 or 1990, the next generation are more digitally savvy than any generation before them. Their connection to digital is intuitive and plays a constant part of their daily lives. Through implementing software stacks and apps in your daily operations, family leaders are able to too become ‘digitally native’ – and speak in a language that the next generation understands.

The use of digital tools and software enables the next generation to enhance their interactions, communication and collaboration. They are already lightyears ahead of the original vision of ‘going paperless’. Advanced data analytics, artificial intelligence and machine learning are fast becoming the norm in the business world of today. As the next generation leaders will begin their tenure in the rapidly evolving environment, they need to be equipped with agile working styles and tools from day one.

In the near future, most business operations will have gone ‘virtual’ with technology doing the heavy lifting.

As a result, business operations will be structured around dynamic workstreams with leaders making ‘at a glance’ decisions based on data. This embedded use of technology will further allow the next generation to professionalise operations which are resilient and able to compete on a global field.

By embarking on a digital transformation journey today, you are able to build bridges between yourself and the next generation. Through utilising tech-based operational programs and systems, a culture of transparency and inclusivity is fostered. Software and applications further promote interactive learning and training, whereby individuals onboarded to both general topics and advanced topics. These programs can function as virtual simulations, where company data gives future heirs a real-world feel and hands-on experience.

Software and applications will never entirely replace face-to-face communication or emulate human touch. But when used strategically they can be a powerful engagement tool and vehicle for transformation.

2. Networking Knowledge

Whether digitally or at physical conferences and events, the next generation is adept at gathering knowledge from multiple sources. Organisational agility is enabled by digital connectedness and being ‘asset-light’ – but this is only part of the story. Understanding that you’re part of a network and fostering connection with others is just as important. Knowledge sharing events are a fundamental way to activate this network both online and offline. Events such as SXSW, Design Indaba, Norrsken Impact Week and TechBBQ offer exciting and inspiring environments to learn from a variety of practitioners. In the wake of the COVID-19 pandemic, many of these events have transitioned online or operated on a hybrid model. Though the format has altered significantly, the content remains highly relevant with a vast number of topics being covered. Depending on the conference, these include everything from business and financial issues to softer factors such as sustainability, impact and purpose. Through attending these events, families can gain best-practice tips and industry benchmarks, alongside using it as a source of inspiration. Just as exploratory research is key to having a forward thinking organisation, so is fostering connections and crowdsourcing knowledge. As the saying goes ‘we do not know what we do not know’. By putting oneself in new situations the unknown can be explored.

Another benefit of gaining this exposure is the ability to form smaller communities based upon shared values and experiences. All of this can contribute to next generation excitement for getting more involved in various aspects of business.

Forging these connections – either virtually or physically – provides an opportunity to share as well as learn. The value of attending networking events often relies on delivering a razor sharp pitch For a generation with a significant focus on personal branding, networking events present the perfect access point for getting involved.

Next-generation engagement is fundamental in ensuring that their legacy continues well beyond their tenure.

3. Mind, Body and Soul

A growing body of evidence suggests that Millennials and Gen Zs value experiences and self development, over possessions and ownership. Wellbeing for body and mind are fast becoming a key consideration for businesses everywhere.

Retreats are a way to begin engaging with these topics, whilst aligning with your family on issues such as new ventures, future planning and succession. 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.

As business at large begins to place a value on employee wellbeing as much as commercial success, family offices should take heed.

This reconfiguration of values can further help to bridge the generation gap. Immersive experiences which are set atypical environments enable generations to engage with each other on another level. Family members are able to embark on a personal journey that continues well beyond their return from the retreat. Alignment of intention, purpose and commitment in an external setting offers space for the unexpected to occur.

4. Giving Back

At the core of millennial and Gen Z generations is the idea of 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 organisation enable even the youngest family members to get involved at an early age – and become 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. Doing Business and Doing Good

According to the 2019 Global Family Office Report, millennials are significantly 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.

As these types of investments offer market-related returns, they are capturing the hearts and minds of future generations. They, therefore, serve as useful engagement tools that can be aligned with the organisation’s higher purpose and goals.

About the Authors

Francois Botha

Simple Founder. Strategy Advisor

Francois believes that the next generation of family leaders need new, simple tools and trusted experts with a fresh outlook.

Connect with Francois Botha View Francois Botha Profile

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