How digital solutions are keeping business families together across generations
As business families grow, ownership stakes start to vary, members disperse geographically and governance of the growing organization becomes more challenging.
If you are lucky, new generations will eventually take the reigns. In some cases, millennials drive new and innovative ideas to maintain the smooth running of the organisation, but unfortunately, they do not always succeed.
The Family Business Institute discovered that only one third of family-owned businesses survive the second generation of ownership, with the success rate dropping to 12% when third generations take over. There are many contributing factors to this, but communication and management are becoming increasingly difficult due to millennials residing in locations which are detached from their native origins and families. Gone are the days where family businesses operate from the same town or city, as they grow, family members and offices are more likely to disperse across the globe.
However, there is still a wide range of successful business families who have passed their legacy onto new generations. Here are two prominent examples:
Nike – Valued at $29.6 billion, Nike is considered one of the largest designers and manufacturers in the sporting goods industry. Phil Knight founded Nike in 1964 and after 52 years as chairman, stepped down in 2016. This has allowed his son Travis to continue the family legacy.
Samsung Electronics – Lee Kun-Hee helped his father grow the Samsung Group into a global conglomerate. Lee is now the chairman of Samsung Electronics, the world’s largest consumer electronics manufacturer whilst his son, Jay Y is vice chairman. Both of his daughters, Boo-Jin and Seo-Hyun, also hold executive roles within the business.
As organisations grow and expand it becomes harder to keep everyone on the same page. For example, face to face meetings and conferences become impossible when you have CEO’s, directors, and owners scattered across continents. Fortunately, advancements in technology have provided digital solutions that have allowed family businesses to successfully operate across generations from all over the world!
Communication has now become instantaneous from wherever you are based. The need for face to face interaction has diminished as instant messenger, video calls, and file sharing have allowed businesses to maintain organisation from anywhere in the world. Millennials are extremely tech savvy and as they move into more senior roles within organisations they are utilising these skills within business.
A recent report by Radicati predicts that the number of instant messenger (IM) accounts will be over 8.3 billion by 2021. Employees now use IM in the same way as email, causing the business use of instant messenger to grow at a much faster pace than the use use of IM by consumers. This is because IT departments within the workplace can tightly monitor and control the use of IM, making it a popular platform within businesses.
If family businesses want to expand and succeed it is vital they stay up to date with the latest advancements in technology, as it is clear that these new generations expect most communication to be conducted via digital devices.
At Trusted Family, we understand how difficult it can be to maintain a family business when offices and family members become dispersed over various countries. That’s why we have invested time into developing a wide range of products and services which allow you to successfully communicate with board members, shareholders and family members. From managing meetings, distributing sensitive documents, to tracking statistics and creating private vaults, we can help you boost productivity by keeping everyone in the loop! If you would like to discover more then please don’t hesitate to get in touch, our team is always happy to answer any questions!