I recently had the good fortune of conducting a study for a client on the characteristics of multi-billion dollar, multi-generational, international family businesses. While many of readers won’t fit into this category, there are definitely lessons to be learned by studying these unique businesses – and they aren’t what you might imagine…
The first thing that struck me about these businesses is how innovative they are. Once family businesses get beyond the 1st generation entrepreneur, we often see a more careful, measured approach to running the business. With all of the family’s eggs in one basket, the desire to take risks can decrease in later generations. Slow, steady growth becomes the objective.
Yet, the businesses in the study unanimously demonstrated the desire and ability to reinvent themselves to stay ahead of trends in the market. They routinely built and acquired new businesses and, perhaps more important, were willing to exit legacy businesses. In some cases, they acquired businesses twice their size in order to build a dominant position in the market. In other cases, they were willing to sell off half their business because they didn’t see that business as a path to the future.
The freedom to make these big strategic bets requires a clear mandate from the owners to pursue new opportunities and trust in a strong management team to execute the strategy