Dynastic wealth is back. Many enterprises cre-ated in the recent global leap forward remain family owned and their continuance depends on the next generation being capable of sustaining their growth.
Families need clear strategies about preparing their children to take control of assets. There are some experts who provide career mentorship and life skill training; private banks have developed some short ‘next generation’ courses. But what should be a developed profession is still in its infancy.
Such families need steering around four main pitfalls:
1\. Basic life experience and life skills are assumed. It is vital to differentiate between experience of work and ‘work experience’. The way to learn how to motivate employees is to experience being at the bottom of an organisation. Perhaps a summer spent stacking shelves or washing dishes should precede a summer job shad-owing executives.
The place to learn to sell and cope with rejection is not in a large marketing department but cold calling door-to-door or in a call centre.
Work experience in a small business or charity does not have the CV ‘wow’ factor of an internship in a bank, but in a matter of weeks, a keen intern will have learnt the work-ings of the enterprise and be an important contributor.
Do not assume basic life skills for the work place – networking, dressing appropriately, punctuality, CV and covering letter writing – will be taught at home, school or university. A ‘career mentor’ can help with such things.
2\. University is perceived as training, not education. Academic education should be extended for academic students – leave training until later. A serious miscon-ception is that a degree in business, accounting or eco-nomics is a prerequisite for a career in commerce.
Far better to read an academic subject; even the most esoteric courses at good universities develop the cogni-tive skills required for business: structuring; modeling; analysis; and lateral thinking.
For students who are not academic, vocational courses or apprenticeships may be preferable to busi-ness courses at low ranking universities. MBA courses are useful, but students need serious experience in full time work to gain real benefit from them.
3\. Professional training, outside the family busi-ness, is underrated. Some of the less fashionable grad-uate training programmes spend far more on training than lower ranked university business degree courses: accountancy qualifications remain exceptionally robust groundings; a commission in the British army develops leadership, communication and organisation skills second to none.
In addition for those ‘next gens’ who are not suited to competitive graduate training schemes, a career mentor can assist, guiding them to small enterprises or set up on their own, where they can make mistakes without damaging family assets.
4\. ‘Next Gens’ are discouraged from playing to their strengths. A prerequisite for dynastic stability is disci-pline and work ethic.
Too many next gens are pushed towards courses in finance, for which they lack aptitude or motivation. But they do have the intrinsic motivation and creative skills to succeed elsewhere.
Students who follow their talents will develop life-long qualities of hard work, perseverance and ingenuity. They may end up succeeding in vocational careers, but will develop maturity and creative insights and will command the respect required to be stewards, if not CEOs of family assets.
Perhaps the most useful advice in this daunting task of next generation planning is – don’t rush and give too much too soon.
As a basic tenet, remember Warren Buffett’s advice – give your children enough to do anything but not enough to do nothing.
