A digital mindset, entrepreneurial culture and competitive jobs market are combining to revive interest in younger generations in taking on family businesses, according to KPMG Private Enterprise.
The professional services firm says that the emerging generation of ‘digital natives’, meaning those born after 1980, could have a transformational impact on family businesses as attitudes towards inheritance shift from obligation to an opportunity to make their ‘mark’.
David Bywater, KPMG Private Enterprise Partner, believes ‘Millennials’ are embracing the chance to use their digital native approach to significantly impact the businesses they are inheriting.
David said: “In the past, family businesses have often struggled to encourage the next generation to take over the reins. It’s still the case that only a third of family businesses survive past the first generation, as young people can be reluctant to simply step into their parents’ shoes and run the company in the same way.”
“However, a new, entrepreneurial generation is emerging and one that has been immersed in technology and the internet. As such, they have a completely fresh perspective to offer and can have a significant impact on transforming a business’ operations and strategic direction. What’s more, older generations now appreciate and value the digital skills that their children can bring.”
Owner and chairman of the Arora Group, Surinder Arora, is one businessman experiencing the benefits of insight from a younger generation. His son, Sanjay, is managing director of Grove HR, the group that runs four of the hotels in the family’s portfolio.
Surinder said: “Digital skills make any committed youngster a great asset to a company, regardless of whether it’s family-run or otherwise, but I think it does contribute to Sanjay’s enthusiasm for being involved in our business because it allows him to think differently.”
Sanjay, who is now 26 years old, started working for the family business at the age of 13. During the summer holidays he would help out in the different teams, from reception and concierge to food and beverage, learning about how the business worked from the bottom up.
Surinder never went to university, but always wanted his children to have the opportunity of higher education. Sanjay studied Business Management as an undergraduate and is currently finishing his MBA before joining the Arora Group full time in January 2016. In between, he spent a few years working in finance, something his father thinks benefitted Sanjay and the family business “without shadow of a doubt”.
Sanjay said: “It was always the plan that I would spend a few years outside of the family business and bring what I learnt outside of it back in, especially as it’s something my father never had the opportunity to do. I think that the more diverse your experience, the more you have to contribute.
“When I join full time I intend to get stuck into the Developments side of the business, to promote growth and take a key role in pipeline projects so that I can be there from the beginning and take new activity through to completion.“
I think that being a part of the ‘internet generation’ definitely gives me a different insight into the hospitality industry. These days, the places that people choose to stay at are hugely influenced by word of mouth and peer reviews, so the importance of social media and review websites can’t be underestimated. Our strategy on this is something I’d like to get involved with and shape going forward.”
Surinder said: “I would never have forced Sanjay to take over the family business, but I was pleased that he has always shown an interest – all parents hope to leave a legacy for their children. He has always told me that he’d like to do things differently one day and I look forward to watching him succeed.”