There’s a lot to say about innovation and entrepreneurship in family businesses. Like, a lot. It's kind of a hot potato topic around our newsroom. Is entrepreneurship really a thing in a family business? Yes. Entrepreneurship is not just for startups.I know I keep saying that, but it's true and cannot be overstated.
It's in your family's DNA. All family businesses have an origin story anchored in entrepreneurship. Even the most sprawling and complex family businesses started with a single idea and a single founder. Over the decades, your family startup has become a complicated business with shareholders, stakeholders, a board and the weight of history to bear. How then can a heady, tangled family tree innovate?
Keeping that spark alive and thriving in a deeply generational entity is complicated. It implies change and risk. It means constantly challenging the status quo. Those can be scary. But, I deeply believe you have to think like a startup to stay vibrant and relevant in business — even in family business. Maybe especially in a family business.
Multigenerational family enterprises hold a unique position. You have to blend traditions while pursuing innovation and manage all the emotional ties of a family. As your family business evolves over the years and decades, the challenge lies in building a culture that embraces change, encourages creativity and champions the spirit of entrepreneurship. Sometimes — most of the time, actually — those can be opposing forces.
So how can family businesses continue to thrive and innovate when they are steeped (trapped, maybe?) in the traditions of generations past?
Embracing the past while looking toward the future is essential for innovation in long-established family businesses. It’s like renovating a historical building. You have to respect the original architecture while modernizing it. It's up to you, as stewards of your business to acknowledge and honor the legacy of the business while inspiring new ideas and new ways of seeing things across emerging generations. If you let yourself get trapped by legacy traditions, it's harder to innovate and, frankly, stay competitive.
Innovation is something most of you are doing every day. It's not always big, industry-altering change; sometimes it's the way you lead, educate and collaborate. Sometimes it's in the boards you build or in the conflict you resolve.
Sustaining innovation in multigenerational family businesses requires a mindset that embraces change and adaptation. And, yes, risk. It's not easy when things are humming along nicely. The key is to keep yourself open to new ideas and have a willingness to take calculated risks. Create a culture that supports experimentation and learning from (gasp) failures. By combining the wisdom and experience of past generations with new perspectives and approaches, family businesses can create an environment where innovation thrives. When you do that, your legacy endures.
Issue:
July/August 2023