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All family businesses face critical phases in their lifetime.
Succession is certainly the most critical one since it threatens the four circles comprising the family business system: the self, the family, the business and the ownership.
While family businesses have much in common, each one of them is unique when it comes to the complexity of the overlapping issues among the circles.
Given the low successful succession rates, it becomes crucial for the Next Generation to play a leading role as Agent of Change and Make an Impact!
So what are the challenges you will face and what knowledge are you required to master to be able to significantly contribute to your family business?
Four main challenges are awaiting you:
- Seeking your legitimacy among the family business stakeholders
- Strengthening your family’s cohesion building on common values
- Achieving your business sustainability on both the financial and social levels
- Triggering ownership responsibility among family and non-family shareholders
The traditional learnings required to lead a business within the increasingly global, competitive and uncertain environment are necessary but not sufficient when the business is family-owned and managed.
Getting equipped for the family business challenges requires getting ahold of three additional areas of knowledge that represent the Triple Requirement for Family Businesses: Strategic Entrepreneurship Imperative, Family Dynamics Management and Family and Business Leadership.
Family businesses are known for the entrepreneurial spirit that drives their competitive advantage over generations. As a next generation leader, you need to learn how to keep a strategic outlook building on the proud past while guiding the business towards new horizons. Combining tradition and innovation, with a social orientation, you will move the family business toward a sustainable future in the global community.
When the Family and the Business develop, the number of actors and interests increases and the family relationships tend to be challenging, affecting the family and the business alike. By learning how to develop family governance along with corporate governance structures, you will contribute to a unity of vision of family members and stakeholders towards financial and socio-emotional value creation.
Leadership excellence is about inspiring people as a responsible agent of change, in making a positive business impact on the community at large, and maintaining family harmony and commitment. By developing your leadership skills both on the social responsibility and emotional intelligence levels, you embrace change in highly competitive and uncertain environments.
Within this triple requirement of Strategic Entrepreneurship Imperative, Family Dynamics Management, and Family Business Leadership, the three components are not as separate as written. Family and Business Leadership Excellence can lead to Efficient Family Dynamics Management and often contributes to the performance of the company in the market. And Efficient Family Dynamics Management will facilitate the nurturing of exceptional leaders who perpetuate the Strategic Entrepreneurship to sustain the family business across generations…etc. Each knowledge component nourishes the other to contribute together to the financial and socio-emotional value creation of the family business.
This article was brought to you by:
The triple requirement is a distinctive component of the EDHEC Family Business Global Executive MBA (GEMBA) learning map. The program aims to help family business leaders meet this triple requirement while becoming agents of change in their family businesses.
To know more about the EDHEC Family Business GEMBA, visit their website www.edhec-family-business-gemba.com