Starting a family business is the easy part; sustaining one for anything past sixty years is exceptionally difficult, says author John L. Ward. As the Chinese say, "Wealth does not pass three generations." The founding family builds up a healthy business. The second generation sucks off the profits and lives high on the hog. The third generation inherits a now-failing business and decides to sell out and go to work for The Man. End of family dynasty.
Ward looks for answers in family-run companies that have stood the test of time, among them Ford Motors, Marriott Hotels, and Levi-Strauss. From these examples he culls fifty lessons for building and sustaining a family business.
Some of the tips are just plain good business, such as creating clear and agreed-upon rules of governance. But, says Ward, "the most critical issues facing business-owning families are family-based issues more than they are business-based issues." These issues include shaping a business that conforms to the family's values, dealing with family feuds, and developing and encouraging children to follow in their parents' footsteps. Consider this: The head of the family business not only has to keep the business healthy, but must also keep the family healthy. That could be the toughest job in business.
Ward is the Wild Group Professor of Family Business at IMD, Lausanne, Switzerland, Professor and Director, Kellogg School Center of Family Enterprises, Northwestern University, and founder of the Family Business Consulting Group International.—Sean Silverthorne
Table of Contents
PART I
Frameworks for Family Businesses that Last
1 The Ultimate Management Challenge
2 The Five Insights and the Four P's
3 A Vision for the Future
PART II
The Lessons
4 Stage I: The Owner-Managed Business
5 Stage II: The Sibling Partnership
6 Stage III: The Cousin Collaboration
7 Taking the Longest View
Appendix A: The Lessons at a Glance
Appendix B: Integrating the Lessons
Appendix C: A Family Business Checklist