Written by: Intrapreneurial Initiative
There is a remarkable change occurring in the Canadian economy that is being overlooked. This change is a fundamental shift in Canada’s demographics, whereby seniors are expected to make up 25% of the country’s population within the next 20 years. With this segment of the population greater than even before, this phenomenon will not only have a societal impact on our population, but it will also impact the leadership and operations of our businesses. Canada is at a turning point, and it is the companies that will effectively prepare for this changing economic landscape that will endure.
Our Ownership Generation
As the baby-boomer generation prepares for retirement, the key challenge will be to ensure the longevity and sustainability of our businesses. A recent survey by the University of St Gallen and the EY Family Business Center identified that in the next 10 years approximately 70% of our private businesses will transition ownership. Within this group, only 38% of current owners were found to have an informal succession plan and 52% had no plan at all2. With so few owners having a formalized succession plan, it is no wonder that we are said to be facing a ‘ticking time-bomb.’ The reality is that if we do not prepare for the proper succession of our businesses, thousands of jobs could be at stake and significant contributions to our local and national GDP could suffer.
Our Rising Leaders
Even businesses that have formalized their succession are facing another issue – a lack of overall interest from the rising generation to step into the shoes of the current owners. A recent survey identified that only 5% of young leaders are interested in taking over the ownership of established businesses, including those whose parents are owners. You might wonder – why is this so? For some, the traditional businesses built by their parent’s generation are simply less interesting and lack alignment with their own passions and interests. For others the reason lies in the abundance of attractive opportunities available to the well-educated and often internationalized young people. These alternate opportunities become increasingly appealing by including flexible working conditions and consideration for work-life balance in attractive and emerging industries.
What if there was a solution that allowed the next generation of business leaders to follow their passions while still learning the essentials of being a good owner? What if the ownership generation was able to support the young leaders that they believe in, all the while ensuring a proper succession for the business they spent their lives building?
Intrapreneurship brings two generations together to develop new and innovative projects led by the rising generation while allowing them to tap into the financial, technical and human resources of an existing business. Companies that support intrapreneurship are distinctive because of their efforts to be creative, break down barriers and develop an eco-system for innovation. This results in sustainable growth and improved internal transfer of know-how.
Intrapreneurial ventures can take the form of a new division, a new product line, or even a spin-off that is entirely unrelated to the core business. The driving factor is two generations working together to develop new opportunities leveraging an existing network of resources and knowledge.