• Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 12/4/2013

Intergenerational issues and failure to change 

Intergenerational issues and failure to change
Many family businesses are built on the assumption that the business will pass through the family ranks to the next generation or that two generations can work side by side, learning from and supporting each other. However, these scenarios might not as simple as they initially seem. The generation gap can mean more than just a difference in age.

Recent research by KPMG in the UK revealed that with older workers delaying retirement (due to a lack of retirement savings and longevity), many younger workers – Generation Y – feel that their career prospects are under threat.

They believe that the continued presence of Generation X could slow down productivity, and that there actually isn’t that much to learn from older, more experienced employees. This in turn can lead to tension between the generations…

The next generation

While both generations value elements such as flexibility and autonomy in the workplace, there’s also a shift in attitudes to work between Generation X and Y.

Younger employees are looking beyond salary to what companies can offer them in terms of ethics and career opportunities, even showing a greater willingness to move to a different employer if necessary.

In contrast, older employees value loyalty to a company or position and can struggle with what’s seen as the younger generation’s willingness to challenge authority.

The generation gap

Other issues that arise include different viewpoints on how to run the business, diverse responses to changes in the market place and the world, and the fact that younger employees tend to embrace an ever-evolving technology much more easily than their older counterparts.

Younger employees may also want to change things in order to carry the business into the future while older employees will put more faith in tradition and experience (an often undervalued but essential component of business success).

When it comes to a family business, generational tensions are often exacerbated by the personal nature of working with loved ones or in a small company, where management structures tend to be quite flat and interactions tend to be informal.

Career prospects under threat?

Emotional relationships are part of family business and they can make disagreements and differences between generations more difficult than in traditional corporate structures.

Leaders in the business should acknowledge this and put in place strategies to deal with these relationships, especially when it comes to areas such as succession planning, where the head is a better ruler than the heart.

It’s important to remember that future generations will ultimately decide whether the family business continues so managing the expectations and growth of potential successors should be high on the business agenda. In order for a business to survive, intergenerational issues must be tackled and resolved as best as possible.

Different viewpoints on how to run the business

Each family business is different but certain key processes can help individuals to deal with intergenerational issues and help ensure the legacy and longevity of the business. These include:

  • Ensuring effective corporate governance with established policies and procedures
  • Introducing more formality when it comes to business meetings and interactions
  • Including an outside expert or adviser (with experience and objectivity) in key business decisions
  • Encouraging dialogue and learning opportunities between generations.

Generational tensions

Along with encouraging employers to embrace the innovative and challenging propositions brought by younger generation employees, Robert Bolton, partner in the UK member firm and global co-lead of KPMG’s HR Centre of Excellence, notes that there’s great value in individuals learning to work across generations:

“As people remain in the workplace for longer, older workers will inevitably constitute a larger proportion of the workforce. Although this may breed the pernicious perception that the younger generation will lose out, this does not have to be the case.

Far from it – an older workforce brings a wealth of experience and Baby Boomers can potentially adopt the invaluable role of coach or mentor to those entering the workplace. The companies who succeed will be those who take advantage of what older workers can bring to the table, in a way that is both innovative and inclusive.

They will be the ones who can find a way for the Baby Boomers in their workforce to be enablers for the young rather than blockers.”


Christophe Bernard

Christophe Bernard
I am a KPMG partner based in the French firm’s Paris office, responsible for encouraging the growth of our firms’ middle markets practice across Europe, Middle East and Africa, a majority of that market comprises of family businesses.

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