Posted: June 14, 2018
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You won’t get an argument from any family-owned plumbing, roofing, or concrete business that family-run companies are the backbone of the American economy. In fact, family businesses account for 64% of the gross domestic product, generating 62% of the country’s employment, and are responsible for 78% of new job creation, according to the Conway Center for Family Business.
Not only are multi-generational businesses driving the American economic engine, but they’re also thriving with more than 30% surviving into the second generation. These businesses are also creating great wealth—think about the $500 billion that Walmart generates. Even with such a rosy outlook, you may get more than a few awkward looks when you ask about disputes over leadership and legacy—not to mention spending hard-earned dollars on new technology.
Closing the Digital Divide
Consider this: more than 50% of construction firm owners are over the age of 55. Only half have a firm plan in place for who will lead the business into the future. Not surprisingly, technology is often a hot topic as the younger generation is bucking to invest and view it as critical to stay competitive and profitable.
Specifically, 37% of the next generation say they struggle to get the family business to understand the importance of having a digital strategy. This number rises to 43% in smaller firms, according to a 2016 family business survey.
One thing is clear—technology is key to attracting and retaining younger workers. This pertains to both younger family members and when adding new staff. Millennials who grew up attached to technology will quickly grow frustrated with manual processes. Small shops may never require a drone, but adding takeoff and estimating software, tablets, and apps can make a huge difference.
Passing the Technology Torch
When it comes to embracing technology, it is often hard to put aside familial roles to hear what each generation is trying to say. For example, the older generation may be resistant to changing how things are always done. Admittedly, some of this may is driven by a fear of the unknown or not wanting to get out of their comfort zone. Meanwhile, the tech-savvy younger generation may be over-eager to jump on the tech bandwagon and not willing to invest the time to train the older generation.
Why not start small? It’s a great way to get started—whether it is replacing punch clocks with time-tracking apps or embracing takeoff and estimating software. In many cases, there is less of a learning curve in adopting accounting, project management, bidding, and estimating tools.
Perhaps the most significant selling point for technology is capturing knowledge before one generation retires and another takes over. Nobody wants to leave a gaping hole in the continuity of the business. Odds are an experienced estimator will never spend the time to document shortcuts or record their thought process on challenging jobs. No company wants to lose valuable intellectual capital with the changing of the guard.
See for yourself how one multi-generational contractor accomplished just this—check out our Hoppe Brothers & Sons video. This is an insightful look at how a high-end painting contractor embraced technology to ensure another 40+ years of success for the family business.