Bringing Together the Rising Generation

Why did you create this program?

Christina Wing: Today, family enterprises are powering the global economy. They represent the majority of wealth creation—about $8 trillion in revenue globally. HBS offers a portfolio of programs for the people involved in these businesses. However, we gradually came to realize that the "rising generation"—the individuals who are candidates for taking over the reins of their family enterprise—have very specific challenges and opportunities that aren't fully addressed in our other programs. We created Rising Generation in the Family Enterprise to explore their issues and provide an opportunity for them to learn alongside people at a similar inflection point.

How is the world of family enterprises changing?

CW: Family enterprises as a whole used to have a rather staid, conservative image. As a result, they weren't always an attractive option to new college graduates. That's changed significantly. Today, many family enterprises are the leading firms in their spaces, and their economic power is growing. They can offer a great career path or career move, either in the core business or a related component.

Why do you use the term "family enterprise" in the program name instead of "family business"?

Lauren Cohen: When we talk about a "family business," we typically mean the operating business that is generating family wealth. If your family has a successful business, running and growing that business will produce a surplus over time. Most of that surplus will initially be reinvested in the business, but capital will accumulate eventually. As a result, different types of leaders within the family are needed, such as individuals who lead and operate the business that is generating the revenue, as well as those who manage that wealth on behalf of current and future generations as part of the family office. The family might also create a philanthropic arm to support social or environmental issues. Someone needs to manage that as well. Each of these areas is a distinct business. "Family enterprise" is a term that encompasses all of them.

Who is an ideal fit for this program?

CW: The program is appropriate for individuals from family enterprises at any stage—from companies that have been established for many generations to new companies that haven't yet had a generational transition. Looking beyond company size, the program is designed to meet the needs of individuals at a transition point. For example, an individual’s role might be changing. They might be taking all or part of the reins of a family enterprise. They might be engaging in entrepreneurial ventures connected to their family's business. They might be looking to take on managing the family wealth. Perhaps they are still considering whether they want to do any of these things. This program will help them address questions like: What is your skill set? What is your passion in life? Where do you fit in the family enterprise?

LC: At some point, the people who have been running a business will retire and a new generation will need to take the helm. If you are part of that rising generation, you are about to have a lot of responsibility fall on your shoulders. Our goal is to help individuals make the best decisions and to approach the transition in a systematic way that creates the best possible outcome for all stakeholders.

Can non-family members attend this program?

LC: Unlike our other family enterprise programs, this program is specifically for family members. They might be descendants, spouses, or in-laws, but they're part of the family. This program is not appropriate for non-family executives or for consultants.

What kinds of challenges will this program help the rising generation address?

CW: Family leadership transitions are really difficult. Many owners don't have a succession plan. Even though 70 percent of owners expect to pass the reins on to the next generation, only 30 percent successfully do so. Many individuals in the rising generation will be given the opportunity and/or the obligation to move into a family business, but in many cases, they move into a role for which they aren’t the right fit or for which they are not yet qualified.

LC: You can think of this as a relay race. Your team can have the fastest runners in the world, but if you mess up handing off the baton, it's all over. In the race, that hand-off may look easy, but it's not. Teams practice it over and over again. So, consider a multi-billion-dollar family business. During a leadership transition, it's easy to make missteps and topple all of the work that has gone before.

CW: We want to help participants navigate that transition so the family enterprise can endure and succeed well into the future. Whatever role an individual takes on, they can have huge impact on their family and even on society at large if they get the transition right. This is true whether or not they choose to become a business leader. Even learning how to become a good stakeholder can be impactful.

What topics does the program cover?

CW: We start with family business operating fundamentals and the role played by family dynamics—What would joining your family business look like? What would it mean if you left the business? Then, we explore the family office—What is it? How does it get set up? Who should work in it? Finally, we discuss legacy—How do you create a legacy for yourself as an individual and also as part of the family? This includes exploring what your family has meant in the past and what it will mean in the future. This helps the rising generation preserve what previous generations have built while also putting their own stamp on it.

LC: Family enterprises involve many different areas—finance, accounting, entrepreneurship, organizations, management, strategy—you name it. To bring expertise across all of these disciples, we've assembled a teaching team from several different units within HBS. We're excited about the many cases we have to draw on for this program. We've been building them up over the years, and today we have more than 60 cases on family enterprises.

Why should current leaders of a family enterprise consider sending members of the rising generation to this program?

LC: Members of the rising generation are the ones who will actually attend the program, but everyone involved in the family enterprise will benefit by having the right people at the helm and ensuring that the next generation is as well prepared as possible. The retiring generation wants to know that the family enterprise—and their legacy—will be in good hands. This program can help make that happen.

What are the key takeaways?

LC: Participants will learn a great deal about addressing the responsibilities and challenges that come with running a family enterprise. We also prepare them to make decisions about what roles they should take on. We give them insight and tools that will help them make this decision and feel confident that they're ready for whatever path they decide to take.

CW: We also help them prepare for challenging conversations that they need to have upfront with the older generation. For example, it's important to pin down job responsibilities or salary, as in any job, but these discussions can be difficult between family members.

LC: Another important benefit of the program is the realization that you are not alone. Participants might start out thinking their family has unique problems, but they'll quickly realize that other families face similar issues. Members of the rising generation will meet peers with whom they can share concerns and ideas—and perhaps stay in touch with to support one another after the program ends.