Considering a role in your family business? An MBA may be helpful.
Discover the transformative influence an MBA can have on your future, regardless of whether or not your path leads to your family business.
By Doug Baumoel and Masaki Sasaki
Estimated read time: 5 mins
So your family owns a good-sized company and you’re thinking that maybe that’s where your future lies. You started out in the warehouse shuffling boxes back and forth during high school, maybe had a stint in manufacturing or marketing, and you have grown up knowing the company and its industry well. Now, a college grad, you need to consider your future, and make important decisions that will impact not only your career, but your family AND its enterprise.
For family business stakeholders considering a career in their family business (or simply being an owner of it one day), the road ahead is complex, with great opportunity and many potential pitfalls. One credential worth considering is a Master of Business Administration (MBA).
Whether your path forward lies in the family business’ operations, ownership, and/or governance, an MBA can provide not only specific skills, but also a valuable perspective and professional network. Additionally, it can provide some measure of “career insurance” should things not work out at the family business.
Navigating the Successes and Potential Pitfalls of Being the Next Generation
The story of family business is full of great next-gen success stories. That said, it is also littered with examples of well-intentioned, highly competent next-gens discovering that the family business is not a panacea, but rather a one-way ticket to a “not-so-good place.” You may work with siblings, cousins, and important non-family leaders. Not only will you need to manage the perceptions of entitlement and the power-struggle landscape, but you will also need to be especially aware of, and concerned about, ownership. If you commit your career to the family business, will you gain the commensurate ownership and control you anticipate? Career planning in a family business should include conversations about ownership succession planning.
Too often, next-gens in later-generation family businesses find that their career success is subject to the power held by cousins or other family members (not working in the business) who have interests that are very different from theirs. If at some point you do decide to explore exit options, you may find that trying to leave a family business after devoting several years of your career to it can actually be tricky. Family businesses are often in niche/specialized industries or in remote locations where your network or other options are limited.
Competitors in your industry may not hire you because they think you’ll return to the family business when the argument blows over or when mom or dad is finally ready to retire. Transitioning to a different industry is another challenge. Your résumé may also be suspect since your letters of recommendation and list of accomplishments would likely be perceived as biased, having been countenanced by a family member.
Master Your Future at Your Family Business (and Beyond) with an MBA
Whether an MBA serves as a possible career reset or as leverage for future growth at your family enterprise, it can be an exciting and useful growth opportunity. So how can you make the most of it?
Take Full Advantage of the Required Self Exploration
Applying to MBA programs is an opportunity to do the hard work of self-reflection – forcing yourself through the process of recounting your professional and personal milestones and setbacks, with an emphasis on the how and why. Do an honest assessment of whether your devotion to the family business is an inner calling based on aptitude and inclination, or if it could be a response to family expectations or the path of least resistance.
Consider if you will enjoy working with or for your family and if family dynamics and structure will likely support your success. Developing self-awareness and thinking through your individual career path is essential for achieving your goals in a family enterprise.
Consider Specialized Coursework and Build a Powerful Network
An MBA program will expose you to different industries, professions and opportunities. While not a golden ticket, it can open previously closed doors. There are also many MBA programs that offer specialized courses in family business, which could be especially relevant to support your decision-making, not to mention student clubs dedicated to advancing family enterprises where you can meet like-minded peers.
The network you build with your fellow MBA classmates can serve your entire career. You will find that you can leverage your network to help your family business and that your network can help you transition if the family business doesn’t work out.
One point to keep in mind is that for a second-generation potential leader, it is possible that you might be the first family member in the business, or one of the few, with a professional business education. This can give you great credibility, but it can also put a target on your back since you represent change. If current leadership is open to change and gives you an appropriate degree of authority in a timely manner, the skills, perspective and network that an MBA provides can be of enormous value.
Leverage Your Family Business Experience When Applying
Finally, applying to MBA programs when you’re coming from a family business can be very attractive to admissions committees. You might be one less person that the career placement people need to worry about. Additionally, the chances are you already have some managerial experience at the company, strong industry knowledge and clear goals at the family business, making you an attractive applicant for business schools.
The likelihood that your career trajectory will continue to lead to a leadership and ownership role is high, thus potentially bolstering the school’s image and future fundraising efforts. However, it is important to consider an MBA as a part of your potential career plan, not as an end in itself or just a credential to hang on the wall. Admissions committees also need to know that you’ve thought through your career at the family business and can articulate that it is reliable and something you’re passionate about.
Whatever You Decide, We Can Help
The decision to devote your career to your family’s business is an important one. Attaining an MBA can be an integral part of that journey. However, it’s not a panacea. You need to explore how that career path is likely to unfold, be clear on expectations of ownership and control, be aware of how corporate governance might evolve and, above all, not ignore the complexity of family and the potential for family conflict.
We can help you strategize your career pathing to ensure a successful entry into, or potential future exit from, your family business – and whether an MBA education may or may not be the right course of action for you.