Family businesses are a vital component of the U.S. economy, contributing significantly to GDP and employing a large portion of the workforce. Deloitte’s 2024 Family Enterprise Survey explores the challenges of managing these enterprises across generations by examining the differing perspectives of current and next-generation leaders. The survey provides valuable insights into how these businesses can navigate generational gaps to ensure long-term success.
One key insight from the survey is the difference in experiences between current and next-gen leaders. Current generation leaders typically have extensive operational knowledge from working within the family business, while next-gen leaders bring diverse experiences from outside the enterprise. These external experiences are valued for introducing fresh perspectives and potential growth opportunities, with a higher percentage of next-gen leaders expecting to be involved in senior management roles.
Significant differences in perceptions and plans for the business are highlighted in the survey. Current generation leaders are more likely to believe that the next generation has a high level of participation in decision-making. However, a portion of next-gen leaders are considering selling the business, indicating a potential shift in priorities. Open communication is crucial to bridge these perception gaps and align on a shared vision for the enterprise’s future.
Trust is identified as a cornerstone of successful family businesses, with the survey revealing differences in trust levels between generations. Building trust involves recognizing and valuing the competencies each generation brings to the table. Technology is also recognized as a critical driver of business growth, with generational differences in the emphasis placed on digital transformation and cybersecurity. Despite these differences, both generations agree on the necessity of technology and digital transformation for future leaders.
The survey uncovers varied risk perceptions between generations, with the current generation more concerned about hiring challenges, climate change, and capital structure. Effective risk management and leadership succession require understanding and addressing these divergent views. Succession planning emerges as a critical area where generational differences are pronounced, highlighting the importance of clear communication, robust governance structures, and involving the next generation in strategic roles.
In conclusion, Deloitte’s 2024 Family Enterprise Survey emphasizes the importance of communication, trust, and innovation in managing multigenerational family businesses. By leveraging diverse experiences, aligning on a shared vision, and prioritizing technology and succession planning, family enterprises can navigate generational gaps and foster long-term success. Understanding and addressing these disparities through open communication and strategic planning can help family enterprises thrive across generations.
