Up-and-coming family business leaders have a lot to juggle. Not only do they need to deal with the pressure and expectations that come with their last name, they also have to build their own knowledge and learn as much as they can from the older generation before they take over the reins.
PwC's latest Next Gen Survey showed the biggest challenge for future family business leaders is building credibility.
This means different things in different situations - being credible in front of staff means having a deep understanding of the business, while credibility within the family means showing leadership potential and a willingness to learn.
Using insights from the PwC Next Gen survey, we've created a list of ten golden rules, lessons that successful next gens follow as they transition into leadership roles.
1. Get outside experience first
Family businesses are certainly moving with the times, and many of our next gens are seeking experiences externally before they transition into a leadership role. Often it's also the current generation of owners who are pushing them towards these experiences. Of course, this isn't a hard-and-fast rule.
Many of our next gens are still finding they are able to build the same credibility by moving straight into the family business from school.
Even those who do seek outside experiences are still coming back to the family business in a junior role and then working their way up.
2. They try before they buy
For those who do choose to go to university or another company first, our research found it's incredibly important to build and maintain links with the family business.
Successful Next Gens keep in the loop about how the company is developing and the trends and issues it's dealing with, even if they aren't there at the coal face.
3. They only accept the right role
Starting in junior roles isn't just about learning the ropes, it's also often the part of the business which next gens are best suited for.
Successful next gens are those who know their skills and take roles that match them - they don't invent their own role with poorly defined responsibilities and they don't run before they can walk.
4. They understand the importance of perception
Every next gen will be under scrutiny from their fellow employees - it may not be fair, but it's a fact, and there's no real way to change it. Next gens are also in a unique position, with a number of different hats they have to wear beyond simply 'employee'.
Finding success as a next gen means being aware of people's perceptions, but also not kowtowing to popular opinion. Developing their own 'brand' and work ethic is essential for establishing credibility.
5. They don't put pressure on themselves
Being a next gen doesn't mean that taking over the reins is guaranteed.
As a company grows and becomes more complex it also becomes harder to reach the top. Successful next gens are aware of where they want fit within the business and are working towards that, without putting unnecessary expectations on themselves.
6. They insist on a proper appraisal
A professional, objective appraisal can be hard in a family business, but it's something that next gens need if they want to thrive.
Without this objectivity, how can anyone grow and develop?
7. They handle change with care
Many next gens have big plans - 79 per cent have lots of ideas about how they will take the business forward. However, it's important to ensure these ideas are being approached in a way that is sensitive to the feelings of the rest of the family and other key stakeholders.
Even relatively small changes - like bringing in new systems - must be done tactfully and backed up with a strong business case. Even as the current generation take a step back, they will still have a say in the business and may have a very different risk appetite than younger generations.
8. They communicate, communicate, communicate
When the line between professional and family affairs starts to look blurry, effective communication is essential for keeping everyone happy and on-side.
Succession is perhaps the most obvious area where these lines can blur - many current owners don't want to think about how they will hand over the business.
That's why these issues need debating and next gens have to be sensitive around this, but do find ways of actively communicating what it is they want and need from the older generation.
9. They make sure succession is a process, not an event
Speaking of succession, successful next gens are those that are starting earlier and putting time into planning ahead, sometimes years in advance of the current generation leaving the business.
This is an important stage, when next gens will make sure they have the skills and credibility they need, and then plug any gaps with a comprehensive development programme.
10. They enjoy it!
There's a lot to enjoy about being in a family business, and being a part of something bigger than themselves is one of the biggest reasons for next gens to stay in the company. Many of our respondents are also excited about the chance to pass on the business to the generation who are following them.
The result: Becoming a credible next gen
Stepping into a leadership role within a family business is no easy road, but building credibility internally makes this process as easy as possible.
Once they have this credibility, next gens will be in an even better position to achieve their own goals and put their own stamp on the business, and to continue building on the success that those who have gone before them have created.