When the next generation does not want to join,,

Two related articles in the FT, “Tears in Tokyo” and “Dealmakers salivate over succession survey” caught my eye. The articles deal with the lack of succession planning, and the first article speaks about how small and mid sized organisations are being sold to other buyers.  The second article describes how the M&A firms are awaiting the results of a survey, which the listed companies have been asked to fill in, by the Govt. of Japan seeking responses for their succession plans. the lack of which, indicates suitable M&A targets.

In a traditional economy like in Japan, large number of businesses are still family owned and family run. The lack of successors and/or succession plans have led to the existing generation seeking to sell these off, with the co-operation of the next gen who would prefer the sale proceeds to start their own new business with, rather than take over the headaches of the family business.

This is a sign of things to come, and if the current trends are any indication, then it is a matter of time before we start seeing similar scenarios playing out in india too. Families will have to overcome their long held beliefs that the family firm is a long term family wealth, and maybe, this would also influence successor traits in the long term as each successor would be expected to operate like an investor rather than as a family business owner. This would have repercussions on the training and expectations of the next gen. This would also need a separate skill sets for these next generation family members are expected to continue in the longer term.

this would mean that families would have to consider including these skills in the training of the next get. are we ready?

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