In the last blog entry I wrote about the importance of entrepreneurship in multi-generational family enterprises. This entry continues the subject of entrepreneurship in family firms identifying critical signs that the spirit of entrepreneurship must be reborn in the family enterprise, and exploring how the potential for entrepreneurship can be recognized.
In the beginning was the entrepreneur and the entrepreneur founded a business. And the business took off, acquired a market share and grew. Members of the founder’s family, son, daughters, cousins–came into the business and took on key roles. The founder’s family had families of their own and their children became next-generation owners and managers. The family continued to grow, a third generation was poised to take their places within the business. Time has passed, the world has changed, and now the family and the business is faced with some crucial questions.
- Is the original business model still viable? Is it flexible enough to allow for the changing mindset and work styles of upcoming generations?
- Are the family’s business values and vision sufficient to take their ventures forward into generations to come?
- Are the original set of business products and services in step with the demands of today’s marketplace?
- Are there sufficient opportunities within the business for the growing number of family members?
If the answer to any of these questions is “no,” it is time for the return of entrepreneurship.
Through entrepreneurship the family business can transform into an entity with much more potential and outreach–a “business family.” Through entrepreneurship the knowledge, connections, assets of the original business as well as the family can be leveraged to begin new ventures, spark innovation, re-work organizational structures, institute whole new business models, update products or services offered by the original business, and create entirely new streams of wealth–thus providing a wider range of opportunities for the family going forward.
Although there is no absolute set of characteristics that define an entrepreneurial nature, [i]here are a few suggested traits that may be considered necessary and thus should be encouraged as a business family plans for its future:
- The ability to learn from others – entrepreneurs tend to be good at networking. They benefit from being members of peer groups such as a family-business mastermind group where they can learn best practice ideas from others.
- Self confidence – a belief in their own abilities and ideas.
- Being innovative/inventive – being able to generate ideas, either for new products/services or new ways of applying them.
- Self motivation and determination – the drive to keep going and see things through.
- Showing initiative – it is necessary to have not only the ideas for the business, but also the detailed plans to achieve objectives (both thinking and doing).
- Analytical abilities – capable of researching and evaluating each aspect of the business, from development, through finance, production, to marketing and sales.
- The ability to make decisions and to take (considered) risks.
- A focus on results that ensures products are sold for a profit.
Families that watch for these traits in their family members will benefit from extending their resources to enterprising members of upcoming generations.