Tracing the Lifecycle of the Multi-Generational Family Business
Have you ever considered the lifecycle of the family business? Of a successful multi-generational family?
We tend to not think about it very much. For many, its about “going to work, and making it work…today.”
But where does the successful multi-generational family business start?
Dennis Jaffe helps to break it down in Borrowed from Your Grandchildren: The Evolution of 100 Year Family Enterprises:
First Generation: The Wealth Creator
These are the founders. The creators. They usually come from humble origins. They have grit and persistence to realize their dream but didn’t start out thinking they were going to be wealthy. They tend to have a hard time giving up control and want to rule from the grave. The matriarch often oversees family succession.
Second Generation: Sibling Partnerships
In successful families G2s inherit wealth but also the values of the previous generation. In order for the partnership to work, the siblings must be able to communicate, work out conflict and develop clear expectations. They are sandwiched between their parents and the next generation who may have little connection to their grandparents. Childhood rivalries must be overcome through collaboration and shared purpose.
Third Generation: Cousin Collaborations
While few families make it to the third generation, those that do are marked by a willingness to explore the world beyond the original wealth creator. The cousins grow up in different households with differing values. For success, the cousins must align and connect to values. And they must commit to the enterprise and growth of the family. They cannot be merely takers or receivers but contributors.
Fourth Generation and Beyond: Tribal/Renewal
The family that makes it to the fourth generation and beyond develop close relationships and they share activities. They make the decision to educate each new generation. They engage in service activities together. They are united by blood, economics, and shared values. They are marked by a celebration of the past but also forward thinking towards growth.
As you read about these four generations, what are your observations? Why do so few even make it past the second generation?
Photo by Wilhelm Gunkel on Unsplash
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Published September 17, 2021
Topics: Family Business