In this blog I have discussed change several times and the need to constantly question everything. I would like to return to the subject again, this time in the context of generational transitions because recently I happened to read some important data in a survey carried out by Assolombarda, Bocconi University and AIdAF (Italian Association of Family Businesses) on this issue:
– 23% of family businesses leaders are aged over 70 and companies guided by the over-seventies demonstrate lower profit performance compared to others;
– in generational transitions only 30% of companies survive their founder and only 13% pass to the third generation.
Given that probably if we looked at similar surveys carried out ten years ago a completely different set of data would be apparent, I would start by saying that I’m not at all surprised that companies run by seventy-year-olds have lower performance, firstly because people of that age – despite being completely lucid and capable in their work, as well as in business management – experience greater difficulty in adapting to change, especially at a momentous time like this with the work context changing so suddenly. And I feel I should say this because today I myself struggle much more to adapt to change than twenty years ago. It is therefore probable that, irrespective of the context, those aged over seventy continue to work with the same method used ten or perhaps even twenty years ago.
The fact is however that – given the speed with which the world of work changes today – if our company were also only exactly the same as the one we had five years ago, the chances are that something has gone wrong. As such, it is precisely because of these sudden changes that generational transition can only be positive and I say this essentially for three reasons. The first is that young people today have on average a higher cultural level that results in them being more open-minded which can only be a good thing. Added to this is the knowledge of foreign languages which today are indispensable in the business world. The third and final reason stems from the fact that new generations of today enter this world of work fully computerized with the right approach.
That’s why I believe that those who begin to work today with no experience but with a particular mentality and with certain “baggage” can benefit their company more than those who bring with them a mental approach and working method that are obsolete which they struggle to leave behind them.
It goes without saying that a period of coaching, of co-existence between the two generations, is essential, even if sometimes the problem is precisely that. And I speak with knowledge of the facts because I have experienced it first-hand. In general the problem lies in the fact that two people who have a certain relationship (as might be the case between father and son) do not have the detachment that could perhaps in these cases be beneficial.
The solution to this problem is that at some point the older generation passes the control stick to the new one. With certain exceptions, in fact, shadowing for too long could be detrimental to the company: the advantage of taking with you many years of experience inevitably collides with the desire to innovate and change.
I would end by mentioning the seven tips listed in the Assolombarda study regarding a successful generational transition: