The backbone of our economy is built on family businesses and as such they face unique challenges not found in publicly trades companies. Building an enduring family business across multiple generations takes considerable thought and deliberate planning. The following article lays out several important strategies to help families navigate the challenges they face.
“Family businesses are all around us—from neighborhood mom-and-pop stores and the millions of small and midsize companies that underpin many economies to household names such as BMW, Samsung, and Wal-Mart. As family businesses expand from their entrepreneurial beginnings, they face unique performance and governance challenges. The generations that follow the founder, for example, may insist on running the company even though they are not suited for the job. Indeed, less than 30 percent of family businesses survive into the third generation of family ownership. To be successful as both the company and the family grow, a family business must meet two intertwined challenges: achieving strong business performance and keeping the family committed to and capable of carrying on as the owner. Almost all companies start out as family businesses, but only those that master the challenges intrinsic to this form of ownership endure and prosper over the generations. ” Source: five attributes of enduring family businesses – McKinsey Quarterly – Organization – Strategic Organization
Read the article, then share your thoughts by commenting. If you have a family business that may need help seeing it through the generations, give us a call or use the “contact us” tab. We are uniquely qualified to assist with the dynamics of family control and the challenges of generational transition.