Your family business: set for languishing or longevity?

It’s no secret: we love looking under the hood of businesses and getting to know who’s in the driver’s seat, learning what fuels them, and working together to turn their vision into a reality. One of those ‘under the hood’ considerations is long-term planning and considering ‘business longevity’.

Keeping it in the family: exploring business longevity.

Recently, we posted some thoughts around longevity. The discussions that followed springboarded us into a more nuanced area of long-term business planning: what longevity means in the context of a family business.

Let’s look closely at family businesses, which account for 70% of Australian businesses and employ around half the country’s workforce.

Family business storytelling: conflict, fragility and the ‘three generation’ rule.

Okay, so when we talk about family business, images of The Sopranos (television’s greatest masterpiece, are we right or are we right?) might spring to mind. Perhaps you’ll think of Succession. Or dare we say it, The Kardashians.

Whether you’re watching mafia, media moguls or reality royalty, these stories all follow the same premise. They are stories of family business conflict playing out publicly and to disastrous effect. These examples portray family businesses as fragile. They’re shown as more volatile than other forms of enterprise; always at risk of succumbing to the ‘three generation rule’ (that old chestnut that says most family businesses ‘fail’ by the third generation).

However, data actually suggests most family businesses last longer than large public businesses do. Moreover, these stories play into our assumptions. They make assumptions about the owners’ longevity intentions. That is, that your family business is meant to operate for generations to come, and if you shut shop, somehow you’ve failed.

Not always the case. In fact, several organisations we’ve come across in our work have a planned and intentional ‘death date’ in their business strategy.

So let’s get off the beaten path and explore some other considerations. Let’s get ourselves in a longevity mindset (or not) and deep dive into your family business.

Are you staying competitive with non-family businesses as time creeps on?

Sometimes, family business owners are involved in company decision-making long beyond retirement (official in a board capacity, or unofficially). The ability to tap into decades of experience gives succeeding management a fantastic edge. However, it can also hamstring your business in some ways.

Change is extremely hard for a generation that has worked, with great success, in a particular way. For example, one company’s senior generation might make it clear that they have no interest in changing their governance structure. Or that other core operations aren’t to change as long as they’re still alive (thank you very much!). Of course, as other key staff, technology and the industry moves on, this can cause problems.  It can make you less competitive than other businesses in the area you play. This will need to be factored in and worked through, stat!