DRAWING from my experience, a worrisome pattern emerges among numerous next-generation leaders — a blend of comfort zone, entitlement, and complacency impacting around seven out of 10 individuals.
The journey of a first-generation entrepreneur often reads as a saga of triumph over myriad obstacles, as they lay the bedrock and cultivate the business. However, as the enterprise ascends to newfound heights and secures its footing, successive generations might incline toward their comfort zones, shying away from the audacity for risk-taking that characterized their forebears.
Nurtured within the shelter of a thriving family business, the next-generation members may unwittingly develop an air of entitlement and complacency. These traits can deter them from embracing risks and confronting challenges with the same ardor exhibited by their ancestors. An all-too-familiar narrative unfolds—a narrative in which the ensuing generation finds solace within the cocoon of comfort zones, spurred by roles they’ve inherited, financial security, and preconceived notions. This comfort-driven disposition can curtail ambition, stifle innovative pursuits, and hinder personal growth. While comfort, per se, is not inherently harmful, an excessive attachment to it coupled with a lack of exposure to challenges and responsibilities can hinder personal development and resilience.
Factors Influencing the Next Generation’s Attitude toward Wealth and Business
An intricate interplay of factors shapes the decisions and behaviors of heirs, ultimately influencing the trajectory of the wealth and business they stand to inherit. Here, we shed light on key factors sculpting the path of the next generation as they step into the monumental shoes of their visionary founding parents:
Lack of Experience: Unlike their pioneering predecessors, the second generation might lack the crucible of life’s adversities, undermining the development of survival instincts and resilience.
Unrealistic Expectations: Inherited wealth can nurture unrealistic expectations about sustaining lavish lifestyles, potentially triggering overspending and neglect of prudent long-term financial planning.
Lifestyle Inflation: The influx of wealth can spark an elevated standard of living, potentially straining resources and leading to asset depletion.
Lack of Responsibility and Entitlement: Heirs who didn’t actively contribute to the wealth’s creation might misconstrue entitlement, failing to grasp the effort and sacrifices behind its establishment and safeguarding.
Limited Ownership: Second-generation members might not share the same level of ownership and commitment to the business’s survival as its founder, dampening their resolve.
Varied Interests and Ambitions: Family members’ interests and aspirations can diverge significantly. Some may opt for different careers, diminishing the drive to uphold the family legacy.
Evolving Market Dynamics: Market landscapes shift post the business’s inception, unveiling fresh challenges that demand new survival strategies from the next generation.
Internal Turmoil and Disputes: Conflicts over wealth distribution and management within the family can deplete resources through legal battles or divisive fragmentation.
Divergent Goals and Interests: Across generations, individual financial objectives can stray substantially, complicating consensus on wealth, business, and family strategies.
Absence of Accountability: In the absence of robust family governance, heirs might lack oversight, exposing them to imprudent financial choices.
So, what will it take for the next generation to break this cycle and embrace the values and work ethic that underpinned their founding parents’ initial success?
Discover more this September when W+B will launch its inaugural Webinar series Titled “Stewardship + Succession + Wealth = Legacy: A Family Guide to Building and Sustaining Your Wealth,” W+B Family Governance and Stewardship Workshop is a comprehensive 3-part webinar series to be held on September 8th, 12th, and 16th, from 9 a.m. to 12 noon. Slots are limited; hence, we encourage you to secure your seat now for only P6,800. This investment will ultimately mark your journey towards safeguarding your family business for generations to come – a legacy poised to thrive for an entire century!
For inquiries, contact Doms at 09178981493 / 09123571049 or email dlagco@wbadvisoryasia.com./PN
