Moving a Family Business Beyond the Founder’s Vision

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A founder with the right vision is only the first step for a family business. The second and third generations are tasked with redefining the business so it endures.

As an example, a family I worked with had developed a huge real estate portfolio under the leadership of their now 80-year-old entrepreneurial father. Four of his seven offspring, in their 40s and 50s, worked in the business, but did not feel they were able to talk about new directions, while others worked elsewhere, sometimes in related fields. They knew the business, and their relationships, needed work.

When I asked these families who was responsible for their most consequential changes, they reported that two-thirds of the changes originated from the members of rising generations, who took initiative and garnered the support of their parents.

My research found that the rising generation typically did not wait for permission; they took initiative. After all, it was not a problem for the founder, it was their problem: How could they continue the legacy they inherited? They got together and acted, stewarding major changes. As millennials or members of Gen Z, they grew up in a digital and connected world, receiving an education that was far more extensive than their elders.

Active learning can take several forms: young family members, while not ready to join the board of directors as full members, may be invited to be board observers. This is like an apprenticeship, where they can meet and learn from family and non-family board members and become familiar with the challenges facing their legacy business and their other shared ventures.

 

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