Are You Ready for the “Already but Not Yet” Time in Family Enterprises?
No doubt, these last months have offered multiple opportunities to reflect about time, and in particular about how much time we have and how we use it.
In our work with families, this reflection can assume a very special connotation, especially when it comes to the rising-generation of family business owners. Despite a high degree of engagement and experience among family members, it is common to hear concerns or complaints regarding the lack of actual decision-making authority as the next generation of owners take over leadership positions. I refer to this as the “already but not yet” condition.
Specifically, rising generation members are often in a position of having been formally granted ownership of the family’s business through equity stakes, but are still struggling to legitimize their control over significant decision-making related to the enterprise and develop their own persona in the shadow of their predecessor. That means they are already owners but are not yet able to exert the degree of control reflecting this ownership on the firm or broader enterprise context.
While the “already but not yet” phenomenon can be frustrating for young owners, I believe there are cases where advisors can help them reframe this time as an opportunity to develop themselves as even more capable owners and decision-makers, for the benefit of themselves, their family and the broader set of stakeholders.
How to do this?
First, it is essential to understand why “already but not yet” can be frustrating. Rising-generation members are often granted shares in the business for tax-related or other financial/legal purposes. At the same time, previous generations retain control over decisions related to areas, including the enterprise’s overall vision, growth, risk, liquidity, dividends, family employment and many others.
Quickly, the rising generation can see evidence that they are “not yet” able to take over leadership functions as proof of their lack of influence and agency, or their parents’ lack of trust. So, they will likely feel they are owners in name only, like an athlete who makes the team only to be kept on the sidelines indefinitely. This frustration cannot be overlooked and can result in successor disengagement.
Rather than dwelling on this justified sense of frustration, as advisors, we may help young owners recognize that there are benefits to not having full, immediate control over significant enterprise elements. Indeed, there are many dimensions on which they need to gain better knowledge and capability before stepping into their predecessors’ shoes, particularly if they are going to share ownership with other family members. Beyond business/ownership knowledge, there are some crucial skills that they need to develop as a team to increase their effectiveness, including decision-making, problem-solving, conflict management, communication, as well as boundary and reactivity management.
While each of these skills could be examined extensively, I focus on the last two, as they are less discussed. Boundary management refers to the crucial ability for owners to navigate through the three-circle model both differentiating and coordinating between roles and responsibilities. Reactivity management indicates the ability for individuals and groups to deal with “emotional hijacking” in a way to minimize the potential costs of misinterpreting some interactions as threatening, and therefore to respond heatedly or protectively. This is one of the most important
skills to develop for the long term effectiveness of family members owning and managing their business together. This is a lofty goal for any family and takes ongoing work over a lifetime to master; also, it represents a unique opportunity for us advisors.
If we could help younger owners stop confusing having shares with having skills, experience and perspective, they will not only accept that there’s time before they take on full ownership responsibilities, but also use the “already but not yet” period to gain individual and collective knowledge and capabilities in the areas above to maximize their future impact. That includes not just skill-building but developing critical relationships with fellow owners and other enterprise stakeholders, such as senior executives and directors. To succeed in their future roles, young owners would benefit from learning to navigate these bonds with confidence, empathy and the ability to build consensus.
When rising owners use their runway to professionalize, they will gain critical ownership knowledge and skills and likely accelerate their timeline to full control over the enterprise. That is because the senior generations will see their successors’ increased capabilities and may feel more confident placing the enterprise in their hands.
The invitation, then, is to support those in the “already but not yet” phase of their leadership to embrace this ambiguous time for what it can be: a gift, a period of critical development, in which they can proactively build skills, experience and relationships to make them even more effective decision-makers for the family enterprise and its current and future stakeholders—including the offspring making up their next generation of owners.
Finally, knowing that from a developmental standpoint, patience is not typically the strongest suit of younger people. I quote Prince William who seems to have learned a deep appreciation for the time he has as “King in the making”: “I certainly don’t lie awake waiting for or hoping for being
King, because suddenly means that my family had moved on and I don’t want that.”
Let’s facilitate intergenerational conversations to make sure our clients can be strategic about how to use this time, waiting for the full potential to manifest.
Gaia Marchisio is the Executive Director of the Cox Family Enterprise Centre at the Kennesaw State University and the Aronoff Professor of Family Business. As a tenured Associate Professor, Gaia developed several curricula for family business classes, and teaches undergraduate and MBA courses on family business, management and behavioural sciences, and consulting services.