A three-step formula for rejuvenating family business in the age of complexity

Six decades of living for many individuals used to spur thoughts of applying the brakes to the speed of life, particularly working life. But recently, many who have completed what statistics would say is two-thirds of a hopeful lifespan are eager to launch their third thirty. The intention is to forge on, to create anew, to own big change—to, well, continue. They pursue a third slice of life. The same pivotal juncture holds true for the lifespan of family businesses, as it does for todays determined individual prolongers. They both share a deep desire to continue. But opposing forces are on the rise. Family businesses are not constrained by the same biological clock as individuals. Some centennials  have forged on for hundreds of years. But when considering the typical shelf life of most commercial enterprises, those few multi-generational family enterprises that carry on so long are sheer marvels to us. Consider what they are up against. Only a third of entrepreneurs who successfully launch (those in their first slice of commercial life) are able to pass the baton to the second generation. And a mere single-digit percentage of those launchers ever get to enjoy the rites of passage to the third. Those surviving beyond that are a rare lot: the lucky, the great, and the marvels. Only a third of entrepreneurs who successfully launch are able to pass the baton to the second generation. Rare because the shirtsleeves to shirtsleeves saying that every culture in the world knows and expresses in its own linguistic way tells the tale of the common three-generational cycle of birth and ultimate demise that befalls most family businesses. What entrepreneurially started as ownership became stewardship, and from that, and often lastly, custodianship. You can feel the declining life force from the labels themselves. Is there nothing that can be done today to overcome the harsh truth of the old phrase, to take a page from the marvels who have, and to just plain continue? The answer to the question contains both good news and bad news. On the dark side, family businesses have always faced internal and external threats. Although applied coaching methods are indeed helping the cause, the foibles of people being people, and the inordinate difficulty of foibled people managing foibled people has been and always will be the commercial-life threatening force on the inside of things. But it is on the outside where the big trouble lies. And the really bad news is that the trouble is only getting bigger. In an evolving universe, nothing remains the same, of course. But it is the accelerating pace of change itself that worries me for the many family businesses we serve at Newport Board Group. The frenzied reality of rapid change is spawning a new phrase so powerful that it could displace shirtsleeves to shirtsleeves. And this phrase is one that business operators actually say out loud—and say with growing regularity: I didnt see that coming. Complexity theory is helping to explain how and why we now come to say this so often. Complex systems—and a family business is a perfect example of one, as is the worldwide economy within which it competes—feature increasingly diverse, connected, and inter-dependent components that adapt. When the diversity increases, when the number of connections expand, and when the learning quickens we get large, unanticipated events. We get the sudden emergence of new phenomenon. We get change we didnt see coming. Keeping pace externally with rapidly changing customer expectations as well as competitive disruption bears down upon what were once reasonable market expectations. Annual budget? Try quarterly. And the old timeless phrase itself is under pressure. Unless we take right action before long we could be looking at just plain shirtsleeves—connoting a family business state that knows no transition to the next. But hold on because here is the hopeful bit: family businesses are not out of options in the great struggle to continue. Here are three initial steps that business founders and 2nd generation leaders should immediately consider: 1.  Forge an emergence of your own, within your business Wise family business owners have long insisted that younger family members gain experience working in other companies before joining the family business. Or to pursue an MBA first to learn the objective craft of business. In this age of complexity, a new form of family-business wisdom is dawning. And that is to foster the next generations pursuit of the entrepreneurial. To fund and support their starting something new—something that rings closer to whom they are and what they love to do. Tip:  Have the Family Office declare a suitable funding provision and call for a patient but real standard of performance to be attained. A new form of family-business wisdom is dawning. And that is to foster the next generations pursuit of the entrepreneurial. 2. Create the blended family business Fostering the next generations entrepreneurship need not mean shortening the lifespan of the current business. By all means, continue with what works. I provide advisory service to third generation players who connect genuinely with the business they inherited. Tip:  In renewing entrepreneurship, look for a cohering thread—a new golden mean which connects the interest of the players, the business models, the familys stated values, and ideally the customers to be served. 3. Practice commercial Aikido To give vocal and financial support for the regeneration of the family business within each succeeding generation, and not just in the third or fourth generation on the brink of business failure, is to embrace the forces of complexity that abound today. Like Aikido, which leverages the power of the opposing force, family businesses need to become their own generative source of I didnt see that coming—as expressed by their competitors and customers alike. Tip: As we may think of the core business as operating more with exploit (garner returns) than explore (defer returns), to use the language of complexity theory, foster the inverse balance with your next-gen springboards. If we are going to make the shirtsleeves phrase irrelevant to our own family business story, let us go for another slice of business life. In this age of complexity, to create is to continue, and to continue is to create. If we truly foster that spirit within our family business, what marvels we may yet become. If we are going to make the shirtsleeves phrase irrelevant to our own family business story, let us go for another slice of business life. Download a brochure  to discover how Hult International Business School can help you to develop the leadership skills and entrepreneurial mindset needed for success in todays complex business environment. Grow your leadership capabilities with an MBA in international business at Hult. To learn more, take a look at our blog Top 10 questions to ask when looking at business schools, or give your career a boost with our Masters in International Business. Download a brochure or get in touch today to find out how Hult can help you to learn about the business world, the future, and yourself. Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021 Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021"> During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . Happy New Year, Hultians! . Happy New Year, Hultians! .