We've all heard that the pandemic accelerated businesses' digital transformation plans, shifting the "future of work" unequivocally into the present. In an ever-evolving landscape, technologies such as AI, machine learning, and blockchain are shifting away from early adopters and becoming more accessible for all types of businesses.
While it's tricky to find the balance between tradition and progress, no family enterprise wants to get left behind in the new digitized economy. And from our perspective, the key to seizing opportunities with new technologies lies with those family members on the cusp of adulthood—the "rising generation," as they are sometimes called. Why? Because they are also known as "digital natives."
In the recent Family Enterprise Foundation (FEF) study, "Who are the guardians of family legacy" (sponsored by KPMG Family Office), pursuing a career in the family enterprise is appealing to many younger family members poised to begin their careers. The research also found that younger family owners appear to be at least as—if not more—committed to building a sustainable family business as their elders.
"Next gens understand that business and wealth change forms over time," the FEF study notes, adding that "the skills needed to build the business may be different from those needed to sustain it." Providing this generation with meaningful opportunities to use their digital talents and involving them in the family business could help lead the push to diversify and bring new direction to the family enterprise.
Indeed, giving the rising generation a seat at the table can also help family enterprises address critical skills gaps. In KPMG's recent business outlook poll, "Canadian businesses struggling to find skilled talent," 80 per cent of businesses said they need more workers with digital skills; 89 per cent are investing in developing their workforce's skills and capabilities; and 68 per cent are having a hard time hiring people with the skill sets they need to grow. While many organizations are willing to invest in digital talent, these skills are hard to find in today's tight labour market. Engaging the family's digital natives can help close the skills gap and create a bridge between generations.
If your family business is thinking about how the rising generation will impact your future, consider the following ways to engage them:
Foster open communication and transparency. Candid conversations with digital native family members will help you to understand their aspirations and communicate your own. Determine their interest level in the family enterprise, the skills needed to lead the business in the digitized economy, and how to further develop those skills.
Define clear structures. Given the dynamics of family, business, and ownership, it's common for conflicts to arise. Start thinking about a clear division of roles, responsibilities, and progression pathways for your next gens. This will help reduce misunderstandings, create accountability, and enhance multigenerational cohesiveness.
Align the rising generation with a shared purpose. Today, younger employees aren't just driven by financial incentives, they're also driven by purpose. They want to feel their work has meaning and that they're making a difference. To cultivate a purpose-driven enterprise, ask yourself: Why are we in business together? Invite your digital natives to rediscover and influence your shared purpose and values.
While every journey will look different, each one starts with a vision for your family enterprise of the future. From there, it's about figuring out how to harness the next generation's talent, and then reimagining the business to drive growth and adapt to the new digital world. It is a journey, but if you and your digital natives take it together—openly, clearly, and with shared purpose—it's a journey whose progress will be its own reward.