Founder and Principal
Only a third of family firms continue beyond the first generation, fewer still make it to the third, and so on. (Beckhard & Dyer 1983).
“Our work is largely to help these businesses beat the odds. Continuity is our goal, even as we confront the high risk of failure that statistics suggest.”
I used that first quote, often cited, in an article I wrote twenty-five years ago for Family Business Review. Then, as a field, we had not yet done the work to further unpack it, nor did we have the wealth of experience with family firms that we have today.
Still, the work of continuity planning and development involves what was discussed then—what is being continued or preserved and, in the preservation process, what will be traded off or sacrificed. Our understanding of what continuity takes is much richer now—though the challenges of the work itself remain—helped by the tools, approaches, and study that time has enabled. We see more deeply that it is not simply dedication and hard work that perpetuates a family enterprise. Now many more structures constitute an enterprise in which family members can find roles to succeed, and where there is more freedom to choose to connect not only through employment.
As consultants and advisors to family businesses, we are often asked to help with succession, strategy, or governance—all important elements of the continuity process.
Reflecting now on that original article, “What is Continuity,” there are many things we had yet to fully work through, even with the decades of experience we already had with hundreds of companies.
The article highlights each of the following, which then and now can be their own unique focus of a continuity effort—even if all else were given up, at least one of these elements must remain for the enterprise’s decision-makers to affirm its continuity:
- Ownership and/or governance
- Family leadership of the business
- Family cohesion is sufficient to retain the business collectively
- The business’s culture and Mission
- Independence (which sometimes included remaining private)
Not everything can or should continue for an enterprise to embrace continuity. Considering the “essence”—not as obvious as you might think—is good work taken up by a family contemplating the future, where identifying and examining the kernel of life at the center of their thinking and activity, and then parsing what change fits and what doesn’t, are both process and outcome focused.
In the article, I shared the following cases from our practice to illustrate some of the dimensions of continuity:
- Case One: Service Business Mission—We Will Change the World of Healthcare
- Case Two: Software Company Considers its Options
- Case Three: The Business Continues in Fact but not in Spirit
- Case Four: Fourth-Generation Family Business Commits to Family Ownership
As I reflect, what seems most noteworthy is that over these now 25 years, so much has evolved in the best ways. We have a deep and appreciative understanding of the many structures that enable families to connect around purpose as well as economics (family assemblies, family councils, family compounds, as well as boards of advisors, directors, etc.), to express leadership across family and economics creatively (nextgen opportunities, philanthropic activities, rules around entry, contribution and exit); to be both insular (focus directly on their needs and aspirations) and expansive (focus on community and societal difference-making), to learn that connection across generations can take many forms.
Then and now, the choice is at the heart of actions and decisions—not that there still isn’t pressure—and timing for actions and decisions that affect continuity has more flex—starting earlier and truthfully, never-ending (e.g., just when succession is effected, future generations are spotlighted, etc.). Ultimately, we love what we do: there is always better when we deserve to feel good for having done a good job in what has been achieved so far—in our clients’ results and our own.
What’s next for continuity thinking?
You can dive into the dimensions of the article and cases more deeply by reading the full article here.
If you have any questions or thoughts to share, email us at firstname.lastname@example.org, we would love to hear from you!