Entrepreneur 2.0: A Better and More Successful Second Generation
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It is true that compared to a freshly launched or boot-strapped start-up, second-generation entrepreneurs have a certain degree of advantage. However, that is only the initial benefit of getting a chance to run a brand built by the previous generation instead of creating a brand from scratch. At the end of the day, in a modern business scenario, irrespective of the inheritance, it is the talent, acumen and the knowledge of an entrepreneur that makes a difference, not their inheritance. Inheriting a successful family business is a double-edged sword.
The Second Generation
Since a second-generation entrepreneur gets an opportunity to lead a flourishing business, his/her abilities and actions are always under the scanner. Gone are the days of idolizing the next generation by loyalists. In modern business, if the heirs don’t bring strong credentials and entrepreneurial skills to the table, it becomes difficult for them to gain acceptance and command as a leader, even for the family-based businesses. It is important to make value additions and display the ability to handle tough situations.
In most cases these days, the second-generation entrepreneurs enter the family business at a mid- or senior-management level, and it is only after they hone their skills and demonstrate their abilities ‘hands-on’ that they are handed over the reins of the business. It is no longer a walk-in-the-park to enter the office and occupy the CEO/owner’s chair, even if one is the only legitimate heir to it. Added to it is the challenge of maintaining and expanding the reputation of the brand.
Do Founders Fail?
Contrary to popular perception, it is easier for a start-up founder to fail, but, for someone who receives the business in legacy, failure is not an option. There are lofty standards and high expectations to meet, keep the stakeholders, employees and clients happy. Whatever good work the inheritor does is seen through the lens of ‘easy for him/her’, and on the other hand, every mistake made is seen as a ‘lack of competency’ or ‘unworthiness.’ Once the incumbent takes over the reins and manages through the grind of being scrutinized in various roles, there is the challenge of taking the business to new heights.
Maintaining the Goodwill
While it is critical to maintaining the existing goodwill and market USPs, the second-generation entrepreneur also needs to innovate and establish his core team. This is the team to which he can delegate some of his tasks and keep his control over various management functions. For this purpose, it is essential for the businessman to be a good judge of talent. A team will be needed to assist his vision for the company.
The new business leader will have to precisely know what kind of talent is needed to carry out his plans and he/she will hire resources accordingly. In today’s globally connected business community, it is no longer feasible for a growing business to restrict itself to a regional or a local market. Strategic manpower and asset acquisition must be done to expand the company’s footprint on an international scale.
There is a constant need to stay updated with the technological developments and the latest trends in one’s respective domain. An entrepreneur has to align his business goals with the prevalent need for sustainability and innovation. It is no longer possible to simply maintain status quo and keep enjoying the riches of inheritance.
Today’s second-generation entrepreneurs must lead their companies through a transformation that keeps the business relevant despite all the disruptive emerging technologies and practices. Hence, if at all there is any extra that the second entrepreneurs have compared to the first generation rookies then it is the ‘extra’ pressure to deliver superior results unfailingly!