Lasting Family Businesses - How to Get Passed the Third Generation
Common themes needed for successful transitions to help family businesses survive the third generation.
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Lasting Family Business
How to get passed the third generation
Family enterprises are constantly evolving…
And each NEW GENERATION has its own EXPECTATIONS, NEEDS and DREAMS. The successful multi-generational family enterprise must adapt to an environment of CONTINUAL CHANGE without losing sight of the COMMON THEMES for enduring generational transition.
Common themes needed for successful transitions:
It requires the ability to…
Balance multiple goals
Develop human capital
Evolve governance practices
Intentionality: Long-term family enterprise success is not an accident but the result of a clear intention
Resilience: A successful family enterprise is characterized by being adaptable and resilient. ... View More Long-lasting family businesses are able to respond constructively to crises.
Transparency: For generational transition it is important that the 1st Generation founder shares information, ideas and control to allow the 2nd Generation to get up to speed.
Collaboration: Successful families foster a shared sense of purpose and commitment to cooperate and resolve their differences openly together.
Responsibility: A family enterprise is both a business and a source of personal identity so that owners feel a clear responsibility for what they do.
Stewardship: Stewardship in a family business goes far beyond employment in the business, and includes broader goals than pure financial returns.
Professionalism: As the enterprise grows it must be led professionally and accountably, often resulting in board of directors comprised of family- and non-family members.
Freedom: Family members of each generation can freely choose to remain in the business or to take their share of the family financial assets for themselves.
Philanthropy: Family philanthropy emerges as a way to do good in the world and to sustain family connection.
Lessons to be learnt from “Generative Families”:
1) Become a great family in order to develop a great business.
2) Elevate your attention away from stewarding financial capital.
3) Focus on human and social capital to create true wealth.
4) Take active steps to cultivate and grow quality rather than quantity.
5) Act value-based and socially responsible in your community.
6) Respect your legacy but continually adapt, innovate and change.
7) Operate professionally within the parameters of your v
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