Learning from families in business who have been there, done that…

and are still talking to each other.

Dr. Justin Craig
Associate Professor of Entrepreneurship
D’Amore McKim School of Business
Northeastern University
Boston, USA

Family Business

Research continues to highlight qualities that contribute to family business resilience. Many non-family entities are starting to mimic key behaviours such as frugality in good times and bad, judiciousness in capital expenditure and carrying little debt.

Successful family businesses, typically:

  • Understand the importance of professionalizing the family business through the introduction of family governance initiatives that are appropriate to the needs of the ever changing business and family
  • Champion the introduction of initiatives that maintain transparency
  • Distinguish between what is a family matter and what is a business matter
  • Are vigilant monitors of the overall condition of the business and the well-being of the family

They also:

  • Understand that some things are inevitable and discuss these openly
  • Appreciate the reasons why succession is challenging
  • Facilitate next generation aspirants’ understanding of the rights and responsibilities of leadership
  • Consider a role in the business as more than a job, more than a career.

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The Burden of Legacy

“the night before closing the deal. My brother and I sat in a car in the parking lot outside the office building and reflected about whether we failed in carrying on the legacy”

Many family businesses are caught in the dilemma of whether to pass along the business to the next generation or sell the business. The senior generation needs to plan for retirement and feel confident that the younger generation can run the business, and the younger generation has to decide whether they want to stay involved or move on to a different career . Unfortunately, most of the time the family legacy affects the decision.  This legacy can become a burden and lead to a demise of the business if the succession plan includes a younger generation who is continuing on for the sake of the legacy of the founders rather than following their true ambitions.

In our family business, our parents removed the legacy issue as an issue, by More…