Jay Hughes is one of the gurus of family business whose thinking on business families and subjects like succession and wealth transfer has been followed for decades.
Yesterday, along with 200+ other attendees at the annual Rendez-Vous of the Purposeful Planning Institute, I had the pleasure of hearing him speak live for the first time, and he did not disappoint.
Hughes talked at length about a variety of subjects, his points of view being described as “spot on” by some, “controversial” by others, and “an evolution of his thinking from just a couple of years ago” when he also delivered a keynote at the PPI gathering.
But one thing with which nobody I spoke to could argue, was the terminology he was encouraging us to use with respect to the various generations in a family business. Practitioners have long used the letter G (for generation) and then the series of numbers to describe the different generations.
While useful for some purposes, the continued use of this system when discussing current and near future issues can lead to plenty of negative connotations, and the entire missing of the point of much of the exercise.
You see, it is all well and good to say that XYZ-company is currently being managed by G2, and the founder (G1) has recently passed away, and some members of the cousin consortium (G3) are currently beginning to join the operations while others are starting college.
But with this numbering system, if I am born into G2, I will always be a G2, and my kids will be G3 and my grandkids G4. The usefulness of this nomenclature is limited, as it describes people in a static fashion, within their family/company only.
If I have a family client being run by G3, with G4 up and coming through the ranks, that G4 will have more in common with another client where the founding G1 is running the show and G2 is preparing to take more control. The G4 and G2 labels lose their benefit very quickly.
So here comes the “Rising Generation” to the rescue. Hughes pointed out that when we refer to the rising generation, it helps keep everyone focussed on the fact that every person, and hence every family, and every business, has a life cycle.
Some founders need to be reminded that they will not live forever. If they aspire to have the business continue to future generations, there will be some work required to instill the changes in leadership from the current generation to the next, and then from that one to the following one.
They do not have numbers in common as we repeat the cycle, but what we clearly do have is a sequence of “rising generations” whose roles, challenges, and responsibilites resemble each other in sequence, scope, and detail.
Any vocabulary that helps emphasize the importance of involving the next generation is a plus.
I recall about a year ago, when first hearing the term “continuity planning” to replace the worn out and misconstrued “succession planning”, I felt compelled to write a blog about it.
Once again, I am compelled to show my support for new terminology, so let’s hear it for the “rising generation”.
And here is hoping that many families take this to heart and will also be able to soon say “let’s hear it for the rising generation” when speaking of how well their up-and-coming family members are succeeding in leadership roles in their family enterprises.
And here is to family business advisors use of the term to keep the rising generation at the top of the agenda in all of their work, for the good of the business, and the good of the family.