Family Business Successor:Heirs or Trailblazers? Guardians of tradition or drivers of change? This is the question that seems to arise regarding the successor of a family business. On the one hand, successors are often cautioned to maintain tradition because it has proven its efficacy: the family business has successfully grown. But on the other hand, successors are required to adapt to the times.
For families, the family business is not just a source of income and livelihood. More than that, it is a source of family pride and identity. Family businesses are also a manifestation of family values. All of this is passed down through generations. The problem is that the successors (will) operate in a different era from their parents.
Family Business Successor:Heirs or Trailblazers?
There are a number of reasons why successors maintain family traditions. Successors feel a moral obligation to maintain the values instilled by their predecessors. Thus, the sacrifices of the predecessors are not in vain. This is also a form of respect for the services of parents. Also, to show the successor’s commitment and loyalty to the family business.
Another reason is to reduce risk. There is no guarantee that the family business will remain successful if it breaks tradition. Not to mention the risk of disputes with the family.
However, maintaining tradition is not without its problems. Especially when it comes to economic, socio-political, legal, technological and market developments. If too tied to tradition, family businesses are in danger of losing their relevance. It becomes difficult for the company to adapt to the times.
No wonder the successor wants to be the one to break the tradition. What’s more, family businesses must compete not only with domestic competitors, but also abroad. There is another factor. With fresher knowledge and skills, successors feel capable of taking the family business to new heights. Especially through digitization and the use of artificial intelligence (AI). They are more aware of the latest technology and have broader horizons. Successors are also often able to identify opportunities that their parents missed.
However, successors and predecessors are two different people. Successors want to create something that is uniquely theirs. In other words, successors want to have their own identity, distinct from their parents. They don’t just want to be remembered as the children of parents who successfully started and grew the family business. Successors want to be known as great innovators.
However, just like maintaining tradition, breaking tradition is not without its problems. The problem that is often encountered is the resistance of the senior generation. Especially if the senior generation still has a strong influence even though they have officially declared their resignation. In addition, not all innovations are successful. This failure can be a kind of ammunition to fight change.
So what to do? In fact, there are many family businesses that are loyal to tradition, but also become breakthroughs. The Ferrero Group is an example. Ferrero is an Italian multinational company headquartered in Alba. Ferrero is a manufacturer of branded chocolate and confectionery products, and the second largest chocolate manufacturer and confectionery company in the world. The company cares deeply about quality and tradition in the recipes of iconic products such as Nutella and Ferrero Rocher. It is also notoriously private and conservative in managing its finances. Despite this, the company is keen on making acquisitions, to expand its business to keep up with the times. This is especially true under the current leader, Giovani Ferrero. He is the second generation, son of Michele Ferrero, the company’s founder. This includes acquisitions of Nestle and Kellogg products. Aside from being diligent in his acquisitions, Ferrero also encourages sustainable initiatives.
Another example is Lego. The Danish company known for its plastic toys prioritizes creativity, family-friendly products, and family dominance for every strategic decision. But with the times, Lego is more flexible. Lego integrates digital experiences, such as video games and augmented reality (AR), with the company’s physical products.
Hermes, a famous French luxury goods manufacturer, is known for its emphasis on handicrafts. Many of the company’s products are still made by hand. Hermes values exclusivity, quality and reputation. However, Hermes understands the changing times. The younger generation has their own tastes. Technology has made the production of goods more efficient and higher quality. Therefore, Hermes utilizes digital marketing to sell its products. Hermes also works with contemporary artists and influencers to keep its products in line with modern trends.
This means that successors can be both heirs and reformers. Innovation is important, but it shouldn’t just roll off the tongue. The ideal way to innovate may be gradual. This way, stability can be maintained.
Indonesia’s first president, Soekarno, once said never forget history. Presumably, this sentence is relevant if applied to successors. This means that successors should not just throw away the legacy of their predecessors. Keep what is still relevant. Adjust them if necessary.
Successors and predecessors must communicate with each other regularly. The goal is for all parties to understand each other. Predecessors must learn and understand the times. Meanwhile, the successor can learn from the founder’s experience and wisdom.
Conflicts often occur in family businesses, including conflicts between children and parents. To minimize the risk of conflict, one of the keys is to apply professionalism, especially in the selection of people.
Family Business Successor:Heirs or Trailblazers?
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