About 40% of family businesses all over the world would pass the business to the next generation in the next five years. Ensuring business continuity by creating succession plans around senior roles is thus very critical.
A majority of Indian family businesses have already involved next generation members and assigned them senior roles. It is at this juncture that "emotional ownership" becomes a critical factor in motivating members of the next generation to continue in the family business. It would ensure that the next gen members dedicate their energy and time to the organization with a sense of pride.
“Emotional Ownership” is the golden thread that underwrites the subsistence of the family business. It will make the members of the next gen act with commitment resulting in active stewardship of the enterprise. They will further recognize that while financial values are important it is only one of the many values that provide the foundation for the family enterprise and that wealth passed on to future generation without values will be in peril.
Emotional ownership can come from two places:
- A self generated positive feeling among the next gen members that family business will belong to them as a reward for their commitment and loyalty.
- A belief in the words of the current generation who have reiterated that “the business will be yours someday”.
Emotional ownership can be harnessed and nurtured in the following ways:
- By identifying the family's core values
- By clarifying the family and business vision for the future
- By ensuring that the vision matches up to the expectations of the next gen members
- By setting specific goals to pass on the leadership to the next generation
Great benefit can be derived by family members across all generations when the link between emotional ownership and actual ownership is clearly defined and comprehended.