01/13/19

Family Business And Organizational Culture

The Questions Every Entrepreneur Must Answer, by Amar Bhide, published in the December 1996 issue of Harvard Business Review[1] is one of my perennial favorite articles to use in teaching my class on entrepreneurism at Baruch College, City University of New York.

Rereading the article recently, several thoughts came to mind as being significant when reframed in the context of family enterprises.

Speaking of entrepreneurs the author writes: “To secure the resources demanded by an ambitious strategy, they must manage the perceptions of the resource providers: potential customers, employees, and investors.”[2] Further into the article he adds that “… the entrepreneur must design the organization’s structure and system, and mold its culture and character.”[3] and that “When entrepreneurs neglect to articulate organizational norms…, their organizations develop a culture by chance rather than by design.”[4]

Successful multi-generational family businesses come about more by design than by chance. Considering the article in this context one might view the founder or current head of the family business as ‘the entrepreneur.’ And continuing the simile, family members might be viewed as resources—for the family or the business or both, and managed accordingly. The perceptions of family members have impact regardless of their roles in the business. They help to articulate and establish organizational norms. When these are appreciated and employed as a resource to be developed, a culture arises by choice from within the family.

The perceptions of stakeholders are not the only issue the head of a family business should be alert to, but it is important one when seeking to create a multi-generational legacy.

[1] Bhide, A. (1996, December) The Questions Every Entrepreneur Must Answer. Harvard Business Review.

[2] Ibid.

[3] Ibid.

[4] Ibid

12/4/15

The Best ‘Family-Business’ Leaders are Constant Learners

In their article The Best Leaders Are Constant Learners, published in Harvard Business Review  Kenneth Mikkelsen and Harold Jarche write that today’s business leaders must make meaning of a playing field that is constantly changing shape.

A valuable axiom for creating successful family businesses is that next-generation leaders need to keep their eyes on the future, while respecting the past. The challenge is perhaps never more trying than for those family businesses where past business practices have been successful and family traditions are strong.

“Sustainable competitive advantage,” Mikkelsen and Jarche write, “now depends on having people that know how to build relationships, seek information, make sense of observations and share ideas through an intelligent use of new technologies.”

In family businesses today, active application of this strategy is incumbent on the both the younger and the senior generations in order to maintain multi-generational success. And it works best when all generations are helping the others meet the challenge.