Tomorrow’s entrepreneurs need to combine essential skills and real-life experience with the right theoretical education; therefore, studies in hospitality management can prove to be a powerful tool for them.

Family businesses account for two thirds of all businesses worldwide, generating about 70-90 percent of annual global GDP and creating 50-80% of jobs in most countries (Family Firm Institute, 2017). However, it is estimated that 43% of family businesses don’t have a succession plan in place (2016 PwC Family Business Survey).

In the Asia-Pacific region, family businesses account for 85% of all businesses and include some of the largest businesses in the world. Internationalization has played a significant role for many of these businesses’ massive growth. According to Mike Wright, Professor of Entrepreneurship at Imperial College Business School, younger generations who have received an international education are equipped to drive strategic change for their companies.

Mentoring the new generation to take over the family business entails helping them select the ideal education, acquire real-life work experience and develop the right set of skills in order for them to become successful business leaders.

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Here are some key aspects to consider when planning ahead:

Succession planning is a long-term project

Succession planning takes a lot of time and one should estimate a 10-year period in order for the transition to be completed smoothly according to Dr Jean-Philippe Weisskopf, Assistant Professor of Finance at the Ecole hôtelière de Lausanne (EHL).

One of the first questions to answer is whether a member of the younger generation wants to take over the business and when this will happen. It’s also crucial to determine what competencies this person has and how he can familiarize himself with the family business, including its culture and challenges, early on.

Moreover, time should be taken for the new generation to gain experience of management and business practices independently, outside the family business.

Working with a family business advisor might be useful as they can help professionally in various ways: assist with strategic positioning, clarify the advantages and disadvantages of having a family member taking over instead of selecting an outsider to run the business, and establish a coherent succession document which everyone can use as a reference.

When the succession is successfully completed, the senior generation should give the next generation the freedom to manage the business in their own way, to make their own decisions, mistakes and innovations.

Essential skills and competencies

Business leaders and research reveal that soft skills will be critical for an entrepreneur’s future success. According to the World Economic Forum report entitled “The Future of Jobs” based on answers from chief human resources and strategy officers from leading global employers, the three essential skills within the workforce by 2020 will be complex problem solving, critical thinking and creativity.

Other important skills include people management, coordinating with others, emotional intelligence, judgement and decision making, service orientation, negotiation and cognitive flexibility.

While preparing the next generation of leaders, it’s important to choose educational institutions and programs that actively focus on developing these soft skills as well.

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