Should you encourage your children to study a particular field to prepare them for working in your family business? It’s not essential, and the best approach is giving them the freedom to follow their passion. Inevitably, success will follow.
Working in family businesses can be difficult. That’s why it’s so important that the people involved are passionate about what they do. They have to love the business so much that they are willing to overcome obstacles to make it work. Most first-generation family businesses have a founder who cares deeply about the company. It’s almost like their baby. You want the next generation to share that sentiment.
As the family and the business grow, new generations come along who may or may not share that passion. Forcing unenthusiastic family members to work in the industry does a disservice to the business, the family, and the individual.
If they are joining a family business in the technical field but are more interested in the soft skills and business side of things, they should go that route. If they pursue a general degree that deals with marketing, finance, and business, they can utilise it in the core of the family business. If they follow their passion and apply it to a critical element of the business, you’ll be well on your way to successful succession.
Of course, there are some caveats. If you want to bring in the next generation to run your engineering firm, a university degree focused on theatre may not give them the skills they need. However, your mandate to them should be to make the family business their own – and the path they take is up to them.
You do not want to squeeze a square peg into a round hole in your family business. They simply will not realise their potential and have the impact on the business that you want.
If they don’t have a driving passion for a particular field, any degree that gives them a basic understanding of business, finance, or marketing will be a great asset. Operations, sales and marketing, and finance are the three core functions a business needs. As long as they know enough so that someone cannot pull the wool over their eyes, they have what it takes to enter the family business with confidence.
Let us take a closer look at how these areas of study pay off in a family business.
The business degree
Studying business is not just about acquiring technical skills and theoretical knowledge. It’s also about developing the ability to think critically, solve problems, and understand real-world issues. With a business degree, you will gain an understanding of basic management concepts, international business environments, leading change, corporate responsibility in a global context, strategic management, economics, and more.
The marketing degree
A marketing degree provides the skills necessary to successfully market and promote a business, reach the right customer base, and generate revenue. In addition, a bachelor’s degree in marketing often covers a wide range of business topics, such as accounting, finance, and management.
The finance degree
A finance degree allows students to analyse data, manage risk, allocate resources, and develop investment strategies. These skills are essential for success in the modern business marketplace.
To MBA or not to MBA?
Studying an MBA is more suited to those who want to pursue a path in large corporations. They train a particular way of thinking that is not very entrepreneurial. In a fast-changing world, it’s important to be adaptable and flexible to succeed. That means being willing to change what you sell and how you sell it to stay ahead of the competition. It’s also important to be on the lookout for new opportunities and be willing to experiment to find cost-effective ways to pursue them. This requires an entrepreneurial spirit that is resourceful and takes risks. With an MBA, you learn to think in a certain way that can quell that growth mindset.
Not now but maybe later
If a member of the next generation simply isn’t interested in business or the industry you work in, it may not be right for either of you. But that does not mean it’s the end of the road. If you encourage your heirs to invest in continuous learning, their interests may develop. And there may come a time when the knowledge, skills, experience, and maturity they have gained create a place in the family business where you both see they can add value.
But there is also a flip side to the coin. If they choose to enter the family business with the requisite university education, there’s no reason they can’t dig into the job while studying in areas that interest them. From philosophy to psychology to IT, if they keep their inner fire burning with further study, they will become a person who feels fulfilled.
What skills are needed to future-proof the family business?
Leadership skills, curiosity, strategic thinking, and soft skills are what will take your family business into the future. This is especially important as businesses evolve into hybrid work models. Those planning a career in family business need to be excellent communicators who do not have to stand at the “water cooler” to make meaningful connections.
As the world evolves, it is essential to consider the next generation and how they will take care of the family business. Formal education, job training, and financial literacy are important, but they are not the only things that matter. Passing the management of a family business from one generation to the next should be viewed as a long-term project involving the next generation and encouraging them to participate.