I'm interested in hearing your personal perspective on this. As the up-and-comer (next-gen), what are some of the struggles you've experienced trying to get ideas related to digital accepted by the current generation? How did you end up getting these ideas implemented?
In this context, I refer to digital as technology, social media, web-based, data/analytics, automation, etc.
This question is pertinent regardless of the type of company ownership. Thanks for asking.
Like any investment a company may be evaluating it all depends on the return on investment and the return on equity. All too often companies do one calculation but not the other. Digital transformation falls into the same category. It needs to be evaluated.
A man with a shovel can dig only so many cubic feet/meters of earth per hour. More than one man can dig so many times as much. So, it seems like a no-brainer to invest in earth moving equipment if your business has to regularly dig holes. But this may not be the case when your cost of labor is low. It is possible that your labor cost is low enough and workers flexible enough that investing in equipment is not the right decision.
Digital transformation follows the same logic. Except....digital is a numbers game. You have to have very high numbers for digital to pay off.
Not too long ago, I had a small business client who swore by digital. His company invested significant amount of their gross margin into their website, adwords, and social media. But he never calculated how much it cost nor the returns. I made him do that and his eyes were now wide open. It cost $300 - $400 in digital advertising efforts to acquire each new client. That's a paying client. The company visited a number of clients - I think 4 but can't recall exactly - before getting one paying client upping the cost by $450 for fielding calls, answering emails, site visits, and vehicle costs. Once he threw in the pro-rata cost of the website and a social media employee acquiring a paying client came out to $1,000! On average, 25% of the gross margin on each job. An incredibly high cost since client work was one and done; there was no tail end, no continuing relationship with the client to speak of. The decision was made there and then to discontinue all digital marketing and focus on building real world relationships.
That said, site visits remained a big cost element so here we did use digital to transform the company does business. Since almost everyone has a smartphone with a built in camera site visits could be done virtually saving in travel time, gas, tolls, and wear and tear on the trucks. These virtual site visits were enough to provide potential customers with a rough estimate of the work to be done. Based on the customer's level of interest a real visit was scheduled to refine the estimate.
These two changes in process brought down the cost of acquiring a client to around $150. That's $850 of profit now being captured by the company on each job!
After implementing this digital transformation we went on to add others where it made sense - dollars and cents - to do so increasing the company's productivity and profitability by over 50%. Now the owner works half as much of the time and make more money.
Digital tools like all tools are a wonderful thing. They make our lives easier. They can take the uncertainty out of many aspects of business, and life. But you have to know how to use them to your benefit and not just because they are the cool thing to do.
Deciding how and where to digitally transform your business requires time to gain an understanding of the company's actual processes and then deciding how to digitize them. It is a long term process. Don't expect it to take just a few days. The client in the example above worked many months on the projects because they weren't a very big or sophisticated business. Not knowing how mature your family business might be it is impossible to advise you on the applicability of digital transformation, timing, costs, and so on. If you'd like to discuss this subject further, please contact me.
Alessandro Daliana's comments are bang-on.
It seems you were also asking about how to get your elder's to accept your ideas about change.
It's difficult, especially when your boss always wants to see you as their child. How do you earn their respect and get them to listen to you the way they would listen to an outsider who seems qualified.
I've witnessed a couple of strategies from next-generation people that you may wish to consider.
1. Leave the family business and prove yourself 'outside.' You can go work in another company to prove your abilities and then come back to the family business at a later date. When your parents see that others respect and value you, it's easier for them to listen.
2. Case-studies. Look for similar companies that are not local direct competitors. Demonstrate the strategies that they're implementing and why you should do them as well... as long as they make sense (See Alessandro's answer)
3. Experiment with other people's businesses. You probably have friends who own or run their own business. Help this person implement change and then demonstrate the results to your parents. If they see that you're capable of seeing valuable opportunities and others respect you for it, it can be easier for them to accept.
Being a next-generation in a family business can be difficult. Your parents probably see the business as an extension of themselves and probably haven't put the effort and thought into a proper succession plan.
Most entrepreneurs that I meet have the 'I'll just live forever' succession plan, until the day comes that they decide they need to sell.
Cheers and good luck.
David C Barnett