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After entrepreneurs and their families have built a successful business or a significant family fortune, what more is there to do? Wealth creators often believe that the important work is already done. All many expect from their children and successors is that it not be wasted or lost. But is that enough? What important initiatives will the generations that follow wealth creation within the family need to undertake?
The eight insights we have compiled discuss the duality of family drama and hard work that successful families grapple with as they face complex challenges as they grow and change across generations. The tasks each new generation is tasked with typically look very different from the achievements of the founding generation, and are often just as difficult to accomplish as the wealth they create. New generations not only maintain their family’s wealth, but also do other things, such as nurturing the next responsible members, connecting, aligning, and motivating them, and using the wealth and resources created in wise and impactful ways. Family estates must be managed in many areas. Method.
What’s the next step? Entrepreneurs and wealth creators often want their success to be passed on to the next generation. Their goal is to create a family-owned business that lasts for generations. So how exactly can you build on your successes and prepare for this challenge? Wealthy creators often turn to advisors for help with this challenge, but how unique is this approach? Given that, business creators and their trusted advisors often don’t fully understand what is needed and what can be done. This series of articles aims to provide families and their advisors with the tools they need to successfully navigate this challenge.
These articles also describe what 100 large global business families have done that have thrived as families for more than three generations and continue to create financial and non-financial value. In our interviews, we asked them to look back at the first and second generations and what they did to create long-term success. And their stories go beyond just business accomplishments: They also said their successes were due to:
- work together as a family
- Inheriting common values
- Building a shared culture
- Developing a new generation of leaders
- Have an impact beyond your business within your community and environment
The vast majority of businesses around the world (both large and small) are family-owned, but only a few survive beyond the second generation. But those that survive are often large and powerful. What makes such a long-running, family-run business successful? Of course, good business choices and market trends are effective. But to understand the success of these long-lasting family businesses, we need to look beyond the business and instead focus on the nature, culture, and values of the family founders: their personal and personal behavior. You need to look at both.
Family-owned enterprises often differ from public enterprises in two important ways:
- Fosters personal relationships among members and motivates them to pursue more than financial goals.
- they have long term They see their family’s business and wealth as a gift to the next generation, so they focus on innovation and investing in the future and the growth and development of leadership in each new generation.
These attributes combine to enable families to lead companies and act in ways that are not possible in other forms of business. The family serves as a resource that increases the value of the company while maintaining a consistent mission. They uphold family values and preserve businesses for future generations. These qualities lead to a broader perspective on who you are and what you do, which extends beyond business. Each family has Non-financial values and goals As their wealth increases, their importance increases. Over time, these families move from a property perspective to a so-called “ownership” perspective. management responsibility orientation. They launch business and financial ventures that pursue non-financial goals that stem from their family values, mission, and culture, and these other ventures actually lead to their sustainable success and longevity. .
As a family business, each family has a core identity and a set of values and goals that go beyond financial wealth and define what is important and meaningful to them. With each generation, these non-financial values and goals become more important to maintaining alignment and connection within a growing family. These are not static things. As families redefine who they are with each new generation, new elements emerge.
We use the term “generative” to describe successful and long-lasting family-run businesses, businesses that reach a size larger than a single business because the family often owns multiple shared assets. Use the. Because these companies create continuous wealth across generations. This wealth is believed to be more than just monetary. Each generation adds value to the wealth creator’s achievements and increases the family’s social and human capital legacy. These eight articles explore how family culture and behavior contribute to business vitality, resilience, and innovation.
Most families in our study have diversified beyond a single traditional business, with many moving from family to non-family leadership, going public or acquiring additional businesses. or investments, over 80% of whom still own operating businesses among other assets. . Our range is diverse, representing businesses from all sectors, including manufacturing, resorts, finance, food services, engineering, transportation, media, forestry, agriculture, and service companies. By the third generation, most families own multiple businesses or businesses that have expanded globally. The family also runs real estate, investments, a family bank, a venture capital fund, a family office, and a charitable foundation.
Given all this diversity, we were surprised to discover that these families share eight key insights that shape the path to continuous renewal and value creation. Their family’s success provides an alternative to the traditional expectation that families will eventually break up and cause dysfunction, and shows that families can take the initiative to counter this potential decline. Masu.
Each article in this series will focus on one of the eight key insights articulated by these long-term generative families. Our goal is to help previous generations of families use their wealth wisely and cultivate new generations who share their family values, culture, and goals.
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