IFB with UCG 13th National Conference

Encouraging innovation &entrepreneurship in the next generation

Jonny Wates, Wates Group

Ruby Paxton, First Habitat Group

Juliette Johnson, Juliette Johnson Consultancy

Guy Rigby, Smith & Williamson

Every family business starts with either

•a great innovation

•a great entrepreneur

•or both

But as you move away from the founder, does a family business lose that entrepreneurial spark?

In the beginning...

• How important is it to encourage entrepreneurship and innovation in the next generation?

• What opportunities exist in and around your business to encourage entrepreneurship in the next generation?Can anyone give any examples of how they are doing this in practice?

Questions for discussion

How other families are encouraging entrepreneurship...

The ‘fish and chip’ fund

• Fund was created for the family to co-invest in solid business ideas from the next generation

• Strict criteria and guidelines were agreed

• Fund was built up over time out of the dividends of the company

• The family vision was to build a diversified portfolio over time and to build a solid platform to support the entrepreneurial ambitions of the next generation

How other families are encouraging entrepreneurship...

Dragon’s den

•Next generation were given £20k from the Family Foundation to collectively agree to support a Social Enterprise initiative

•All the cousins were tasked with researching various Social Enterprises, to pitch their ideas and then collectively agree what they want to support.

•In addition to the money, the next generation give 2 days a year to work together on a project linked to their chosen Social Enterprise. Process is repeated on an annual basis

How other families are encouraging entrepreneurship...

The enterprise challenge

•A group of siblings were set a challenge by their parents...

•Each were given £5k and told to find the best way to grow it over a 12 month period

•The most successful was awarded a special trophy but all were allowed to keep the profit they generated

•This has now become an annual event for the family and has driven some amazing entrepreneurial activity

How other families are encouraging entrepreneurship...

Corporate problem solving

• Every year, these next generation are taken to one of the companies in their group

•They meet with directors/senior managers and are provided with an insight into that company•They are then given some background information and presented with a specific problem which that business is currently tackling.•In teams, they are tasked with working through the challenge and formally present their ideas back

How other families are encouraging entrepreneurship...

Reverse succession

•These next generation were supported and encouraged to set up their own business alongside and complimentary to the main family business

•Once they had made it a success and proved their capabilities, the two businesses were brought together and the next generation took over the running of the business

How other families are encouraging entrepreneurship...

Family internships

•This family had 8 different businesses across 14 different countries

•They built a structured 1-2 month internship programme giving all next generation the chance to experience different businesses in different locations

•All internships were project/challenge based rather than based on more traditional functional roles

How other families are encouraging entrepreneurship...

The ‘family university’

•This family organised for their next generation group of cousins to go away for 3.5 days.

•2 days they spent having crash courses in areas such as finance, marketing , branding etc... from experts and academics

•In groups, they were tasked with working together on creating a business plan and presenting it back to the family council

• Real entrepreneurship can’t be taught but it can be nurtured...What can you be doing to encourage your NxG to think and act more like entrepreneurs?

• What opportunities are there to strengthen their connection to the business and get them more involved in different ways?

• Could a platform be built to support the aspirations and innovations of the next generation, either within the Group or outside?

• Have you got the right balance between structure/rules and encouraging individuality and creativity. Does your governance support or stifle entrepreneurship?

• To what extent do you encourage risk taking within NxG (albeit with some controls in place)?

• Sometimes you learn more from failing than being a success..... Are you giving your next generation the platform to try?

Some things to think about...