![]() But no matter how comprehensive a family's constitution, charter or code of conduct, new issues will inevitably highlight the documents' gaps or inconsistencies. A family constitution, fundamental to family business success, can anticipate potential problems and promote family unity and commitment. Maintaining a focus on the long-term future also helps families integrate solutions to dilemmas into a common purpose.Ģ. For example, they may conclude that individual creativity is cultivated best by a base of communal support - and that loyalty to a group is most genuine when one has the freedom to choose. But they also go beyond compromises to develop true win-win resolutions, often satisfying two polar principles simultaneously. They discuss them fully and seek difficult compromises. ![]() Successful families don't hide from these dilemmas. The most overarching dilemma: balancing the interests of the business with those of the family. Negotiating complex family business issues presents many ostensible contradictions, such as balancing individual freedom with collective commitment, embracing tradition and change, celebrating the past while focusing on the future, and respecting individual differences while forging shared values and vision. The ten hidden artsīeyond these three foundations of success, I have observed ten "hidden arts" that are key to the success of long-lasting family businesses.ġ. A constitution articulating the family's purpose and values, policies to regulate family practices, and expected roles and responsibilities. Regular family meetings for engagement, education and bonding.ģ. An active, independent board of directors.Ģ. There are three well-documented fundamentals of family business success:ġ. What can we learn from them? The fundamentals of success Yet throughout the world, successful multi-generation business families remain a powerful economic force. And older business families must deal with death taxes, growing membership and the need to teach younger generations about responsible wealth management. On top of these challenges, family firms must address family rivalry, later generations' indifference, variable family-member competence and rocky successions. ![]() Nonetheless, a growing body of academic research worldwide documents family firms' superior performance.Īll firms face growing competition, unpredictable market changes, and the vulnerabilities of globalizing industries. Ward, Keeping the Family Business Healthy, Family Enterprise Publishing). "Shirtsleeves to shirtsleeves in three generations." So goes the popular adage about family businesses, bolstered by oft-cited statistics that only 20% of family businesses make it to the third generation and just 13% last through that generation (from a 1987 study published in J.L. ![]()
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