According to PWC’s 2014 survey:
• 88% of second generations in family business say they have to work even harder than others in the firm to ‘prove themselves’
• 72% of second generation respondents see this as a significant concern, compared with 57% of those in later generations
• 59% say that gaining the respect of co-workers is their single biggest challenge
• 7% of the next generation had gone into the family business straight from school
• 31% went to university first and,
• 46% had worked for another company before taking a role in the family firm
That’s the situation second-generation members of families that run business often face.
Today, however, most of Indonesian Chinese family business faces a serious challenge as its first generation of entrepreneurs struggles to create family businesses with the next generation, because of a lack of attention to planning for their children’s participation as executives, directors or owners.
In Indonesia, the local Chinese people still had this strong family business legacy that causing cultural barriers related to respect, communication and hierarchies. So what can Chinese entrepreneurs learn from other family businesses around Asia and the rest of the world? Here are some tips that may help your succession planning smoother!
• Communicate clearly
It’s important to have some formal framework in place for regular communication. One of the most important topics is to clearly define family member’s roles and expectation. It’s a smart idea to figure out who is good at what aspects of the business and use those strengths to help define roles, instead of each family member trying to do everything.
• Be respectful
For you, successor to be, you need to realize that you’re not starting your own business—you’re carrying on the legacy of someone else’s vision. That doesn’t mean that you can’t make it your own in time, but it’s important to be respectful of the original business’s integrity. Consider building on established success rather than taking a sharp turn in another direction.
• Don’t always let family come first
The interesting thing about family businesses is that they have a tendency to sometimes make decisions that are better for the family than for the business.
• Focus on the present, as well as the future.
Succession planning tends to dominate the management conversation at intergenerational businesses. But you should also spend time looking for ways to get the generations working productively in the here and now. Who wants to train somebody so that they become obsolete? We need to learn to put more of a focus on working together and leveraging the best. To use one another abilities to propel business forward, not on propelling people out.
• Get an outside help
Don’t wait until it’s in serious trouble to bring in a professional to help your family business. The best time to engage a professional is before there’s a problem. Think of using a family business coach in much the same way you would think of using an attorney or a management consultant. You want some guidance and direction to help you prevent problems and make your family business better. They can help families understand the communication pattern and coach the family members on communication skills.