The impact of business succession on the work-life balance of the next generation is obviously considerable. Within this theme, however, some nuancing has taken place over the past two years. We discussed this with Maarten Vijverberg, partner and specialist in business succession and acquisitions at Clifton Finance. We talked about the increased role of sustainability, the influence of the coronapandemic and mixed forms within business succession.
Younger generations, in contrast to the self-sacrificing previous generations, have no intention of making major concessions. The younger generation also wants to have a vibrant private life. Friends, family, the occasional Saturday afternoon on the sidelines of the soccer or field hockey field. This image does not include working for the company seven days a week. This was the – until recently – prevailing view regarding business succession and how the next generation views its own work-life balance. Maarten Vijverberg also spoke about this in similar terms with Fambizz in 2019.
How different does the world look in 2021? No, the younger generation still does not necessarily want to sit in an office seven days a week. But they don’t have to anymore.
The corona pandemic has made the business world realize that working from home is also fine. Just as, across the board, the digitisation issue has become even more important within the family business. Vijverberg: “As of March 2020, the business world could no longer continue in the usual way.” As a result, nowadays the boardroom is no longer just about operational excellence. “It is also much more about digitization themes such as cybersecurity and future-proof networks. Topics that are much more within the area of interest of the younger generation of leaders.”
Vijverberg sees that the younger generations are indeed taking responsibility for the latter themes. “In the area of digital transformation, they can really take a leading role, which greatly increases their commitment to the family business.”
Another theme that has gained momentum in the past two years and with which younger generations are preparing for a prominent role within the family business is sustainability. “We have become even more aware of our ecological footprint, and how family businesses can contribute to this .”
Sustainability is also a topic that younger generations are much more attracted to. “They are picking up this gauntlet just as well, where the incumbent, older generation cannot always imagine it.” Vijverberg recently experienced this up close, within a family business in which he is involved from Clifton Finance. “The younger generation emphatically pushed this subject forward as a spearhead. Although it was not immediately clear to the incumbent management what this would entail. The company did eventually adapt to this and the family business has taken a sustainable turn.”
Their interest in and commitment to themes such as digitization, cybersecurity and sustainability mean that succeeding generations become more involved in the family business on a project basis. “In this way, you enthuse them more on a part-task basis, rather than requiring them to take an interest in the entire family business at once. The latter can be a challenge in some cases.”
Mixing forms within succession
Boarding up and setting out lines of communication in partial areas within the family business illustrates another change that Vijverberg has seen take place over the past 2.5 years. Vijverberg: “There are many more mixed forms emerging in which the family remains involved in the family business, but is no longer necessarily active in an operational role. For example, they only take on a supervisory role, while third parties manage the company. In doing so, they do take on a major involvement. Or the family is only involved in the company on a project basis. This can be in the area of the aforementioned themes. However, this can also be done through other projects that are important and to which the family can make an additional contribution.”
A development that, in turn, fits in perfectly with the previously mentioned desired work-life balance, to which younger generations attach so much importance. “The time they put into the family business, they spend on themes and projects they like. This is where the younger generation can put their energy and expertise. As a family you must of course be open to such constructions.”
It is not only the next generation that benefits from these blends: the family business and the management – which in more and more cases still barely contains family members – also benefit. “As a board of directors, you have additional assets in this way when you can involve people from the entrepreneurial family in projects whose sole purpose is to improve the organization.”
Letting go also becomes a lot easier for older generations in this way. Vijverberg: “It naturally inspires confidence when successors can focus purely on areas with which they themselves have a great deal of affinity. It is fantastic that the currently important themes fit in well with this and this offers room for new forms of business succession.” The current era lends itself perfectly for this, according to Vijverberg. “Thanks to developments at the macro level, as a family business you now have the opportunity to give younger generations an important role. This can be done by involving the younger generation precisely on a project basis and not only in terms of supervision.”
Many more mixed forms of business succession are emerging, where the family remains involved in the family business, but is no longer necessarily active in an operational role.