Business is the fundamental agent in the recovery of an economy struck as dramatically by the pandemic as Italy’s has been. To determine whether that recovery will be a success we need to consider the system’s economic armature of countless small and medium-sized family-run enterprises. Today’s generational hand-over becomes even more important than it has been over recent decades. At stake is the result of the major challenges awaiting national manufacturing: the digital transformation and the environmental transition.
According to an Intesa Sanpaolo study, the process of handing over to – or better yet, facilitating – the next generation has lost momentum over the past decade. The average age of company executives has gone from 53 to 60, while slightly less than one-third of Italian firms are run by over-65ers. The short-term future and the unknowns about the post-coronavirus economic reconstruction, offer two possible scenarios: either further suspend all change or accelerate turnover, this latter being the only way to seize the opportunities offered by the recovery.
Indeed, encouraging new generations’ inclusion on boards of directors has proven beneficial in terms of business competitiveness while at the same time accelerating innovation and sustainability, two essential growth drivers. Nevertheless, the new generations are not always interested in or prepared for the handover. That is why it is important to distinguish between the maintenance of company property and that of management. In the latter case, a step back by the family and the introduction of external managers, even though part of a long and complex process, undeniably leads to long-term benefits and often goes along with availability of capital, which remains a major expansion catalyst.
Key elements in steering and supporting the critical steps in a company’s growth are preparation and training. Even stakeholders need to be educated: while products and services can change over time, founding families remain the custodians of the values on which a company is founded, and can continue to prosper. Preparing the new generations must be a shared, broad-based process in which outgoing generations must learn to be good mentors to incoming ones; in turn, the new must be capable of teaching the previous generations the importance of new instruments, starting with technology, in a kind of reverse-mentoring process.
Only this sort of intergenerational support and exchange of skills within a context of adequate governance can allow the countless Italian SMEs, with their wealth of post-WWII artisanal know-how, to continue to grow and become international leaders in their respective sectors, while also ensuring Italian industry a promising future.