Or, in many cases, a lack of engagement leads to the sale of the family business. Without engagement, the entrepreneurial energy of the next generation dissipates or is redirected into non-family business opportunities. Yet keeping the family engaged, educated and entrepreneurial gets harder as the family grows and disperses. The family just needs to listen and be poised to respond to its young people. They will provide the spark that enables the family firm to grow and prosper amid changing market realities. If the family has done its job of preparing children for ownership and leadership, this next generation will act as the innovation engine for the company. However, family businesses can have a significant advantage over non-family businesses if they use their next generation as a barometer of change, and as a window into a new reality that the previous generation might not fully understand. Some may regard multigenerational family companies as too tradition-bound, emotionally tied to their legacy businesses and reluctant to adapt to new realities certainly, these are dangers. This mindset compels each generation of family owners to take responsibility for finding new ventures and new revenue streams -to abandon non-performing assets, move into completely new businesses or expand in new directions.

If the business is to survive as a viable enterprise in a competitive marketplace and remain family-owned, the family must not only engage and educate succeeding generations, but also encourage what Tim Habbershon, founding director of the Institute for Family Enterprising at Babson College, calls an “entrepreneurial mindset.”Īn entrepreneurial mindset “leads owners to cultivate a sense of urgency throughout the family and organization be in a proactive and continuous search for opportunity move to an empowering, participatory leadership model assess and develop their dynamic capabilities for the group and institutionalize entrepreneurial climate-setting practices” (T.G. One of the most significant challenges facing multigenerational business-owning families is the transition from generation to generation.

Tad smith retail first