Succession planning is a valid concern for all affluent families across the map. However, due to various geographical and cultural factors, the Middle Eastern family businesses need to approach the issue slightly differently. Below are three key areas to tailored Eastern outlook towards considered succession: core values, family size, and generational transition.
Traditional Middle Eastern values have been around for centuries, while the majority of modern business trends are barely a decade old. This makes combining tradition with innovation challenging in the least. Therefore, family business leaders begin to proactively re-prioritize established core values. By taking a fresh look at the way the business was previously operated and comparing it with the rapidly-evolving corporate scene of today, families can evaluate whether their model is forward-looking enough, and make appropriate adjustments if it isn’t.
The next obstacle on the path to effective succession planning for Middle Easter families is the number of relatives. According to statistics, an average family in the Middle East is at least twice as large as in the United Kingdom or in the United States of America. This can be potentially problematic on several levels. For instance, some heirs might easily be overlooked in the process of future role allocation, which can result in counterproductive disputes and conflicts.
On the other hand, big families also mean widespread portfolios and geographies. The more members there are in the family, the higher is the chance that they will take residence in a variety of countries and find interest in different industries. This can become a complication for effective governance and visibly slow down the progress due to the number of organizational matters. The good news is that an establishment or employment of a family office can notably improve the supervision over the multi-layered, globally spread structure.
Finally, the transition between generations has always been a significant challenge for affluent families and their businesses. Apart from the family size and value prioritization, the biggest concern of family heads is that their heirs are simply unfit. Of course, this can be approached with a variety of mentorship and educational measures. However, if the successor is openly unwilling to take a certain position, not much can be done to change that.
In this case, the most optimal solution is to open a conversation. Most of the intergenerational challenges arise from lack of communication, so taking one step towards connecting makes a lot of sense. Even considering the distance between family members, there are a lot of ways to hear each other out and find a solution that will be suitable for each side.
Finally, the families in the Middle East, as well as all other affluent families in the world, should focus on shifting from family business to business family mindset. This will ensure that young successors are fully comprehending the gravity of their inheritance from a really early age and at the same time adopt a behavioral line that will positively contribute to the family’s reputation.