The Missing Link in Family Business Transitions:
How Emotional Disconnection Threatens Family Legacy
A significant disconnect exists between Founders/Current Owners and Next Generation in how to best equip themselves for future ownership and wealth transitions that stem from a continued lack of communication and alignment between the generations
The Founder/Current Owners top 2 emotional challenges were cited as 1) rivalry and 2) entitlement, challenges generally associated with and used to describe the next generation indicating the Founders/Current Owners see the emotional challenges as being in the next generation. The top 2 Next Gen answers were 1) communication (or lack thereof) and 2) control, challenges they see as being caused by the Founder/Current Owner generation, not getting the information they feel they need and not seeing a path for their future involvement
Founder/Current Owners
Top Emotional Challenges in Family-Owned Business.
Can you Relate?
Next Generation
Top Emotional Challenges in Family-Owned Business.
Can you Relate?
When we asked both generations if their existing governance documents address the emotional issues and family dynamics, 64% of Founder/Current Owners and 76% of Next Gens said they do not. As we presented earlier, emotional challenges are part and parcel of this journey. In fact there was not a single respondent who said that none of those 6 emotional challenges exist in their family, but families continue to avoid dealing with or addressing these emotional challenges sufficiently in either generation.
Founder/Current Owners
Does Your Existing Governance Framework Address Emotional Issues and Family Dynamics?
Next Generation
Does Your Existing Governance Framework Address Emotional Issues and Family Dynamics?
Today, when the vast majority of future owners and inheritors have had the opportunity to advance their knowledge and skills through the best education and work experience available in the world, what really differentiates one Next Gen inheritor or owner from another? Instead of their knowledge, analytical skills and entrepreneurial DNA, could being comfortable with one’s own identity, safe within one’s own individuality and family role be the ultimate difference in being ‘adequately equipped’?
Founder/Current Owners
As a Founder/Owner in a Leadership Role, What Are You Doing to Develop an Interest in the Next Generation to Take Over?
Next Generation
What Do You Believe ‘Adequately Equipped’ To Take Over Ownership or Inherit The Wealth Means?
Adam Browne is the Managing Director, and second generation family member of PharmaCare PharmaCare, an Australian-born and built success story and remains a 100% Australian family-owned and operated business. In this short video, Adam explains how Veritage helped his family to develop a sustainable succession plan, to ensure they were equipped and prepared to navigate the future without worry.
Is There a Clearly Written Path Mapped Out for You to Take Over Ownership or Family Wealth Decisions?
Succession and transition planning, ideally, should be done with and not for the next generation. Yet, in our survey sample, the next generation members are not being included to the extent that we believe they should be. When asked if everyone in the family was included in the succession and transition process, 68% of the Founder/Current Owners said yes they are whereas only 41% of next gens agreed. Perhaps it is not overly surprising then to learn that more than two of every three next generation members surveyed do not see a clear path mapped out for them to take over ownership and wealth decisions.
A strong majority of the Founder/Current Owners (94%) felt they were heard and understood, whereas only 65% of the next gens felt the same way. On the surface, this may not seem like such a major disconnection but it is. To put it in perspective, for every Founder/Current Owners that doesn’t feel heard or understood, there are six Next Gens who feel the same. That’s six times the amount of Next Gens that don’t feel heard and understood compared to the Founder/Current Owners. This is a significant risk to future planning of the family and wealth.
Founder/Current Owners
Do You Feel Your Voice is Heard and Understood
in the Family?
Next Generation
Do You Feel Your Voice is Heard and Understood
in the Family?
Marina Paperny is a former Justice Court of Appeal in Alberta and is the eldest of four siblings working in their family business. Marina shares her experience of working with Veritage and how the process helped her family to communicate openly and honestly and to break through barriers they had previously been unable to do.
Scan this QR code or click here to assess the emotional challenges in your family.
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