Three Family Keys to Multi-Generational Business Success
By Craig E. Aronoff, Ph.D.
As we’ve suggested many times in The Family Business Advisor, family challenges are more likely than business challenges to lead to the demise of family businesses. We’ve observed three related characteristics of families which achieve multi-generational business continuity and success.
Families that stay in business together over generations have an articulated sense of family vision, values and goals. They have an answer to the question: “What do we hope to accomplish as a family?” They see their business as a critically important means of serving their larger goals, not as an end in itself.
Second, families who own and operate businesses together over generations develop mechanisms which allow individual family members to choose freely to participate in building relationships, careers in the business and ownership status. Having provided freedom of choice, however, successful families work hard to make belonging attractive in ways beyond financial return. By “standing for something,” by stimulating pride, excitement and interest, by providing opportunities for contribution and leadership, as well as by providing solid rates of return and access to liquidity, family businesses seek to become the “first choice” of family members. Vague promises that “someday this will all be yours” simply do not have the same stimulative effect.
Finally, the culture of families enjoying multi-generational success foster individuals’ sense of responsibility and accountability to something larger than one’s self. Rather than thinking “what’s in it for me?,” family members seem unusually willing to sacrifice short-term self-interest for what is perceived as the long-term greater good.
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