ROOTS: Anchoring Your Business - Takeaways
A family business, as defined by the Harvard Business School, is when two or more related people own, lead or make major decisions for the business. However, the Chicago Family Business Council sees things differently. From our viewpoint, your employees, partners and investors in one way or another are family.
Family businesses are complex and tricky, especially when it comes to generational transitions. The odds aren't normally in the businesses' favor when it comes to surviving those transitions. 30% of family businesses last into the 2nd generation, while only 10-15% last into the 3rd generation.
Roots: Anchoring Your Business, is a course focused on avoiding all of the factors that can cause family businesses to fail and provide 12 best practices to keep your family and business functioning homogeneously.
A Glimpse of the 12 Best Practices
2) Create a Family Business Philosophy
In order for the family business, and everyone in it, to function in unison, there must be a family business philosophy. This philosophy will be used as the foundation for the business, and the family, and will consist of your values and beliefs, policies and business principles.
It is imperative that the family and decision-makers of the business sit down, decide upon these values and standards by which the business should operate and then pen them to paper. At the center of the family business philosophy is trust. Trust is what will bind the family business philosophy together and is what will allow the business to continue operating under the same guided principles. Once everything has been agreed upon, this will be used as a template to evaluate the business and those in it, and will hold everyone accountable to the same set of standards.
*70% of intergenerational wealth transfers fail, Roy Williams and Vic Preisser, Institute for Preparing Heirs, 2003, pp. 35-50
For more information on Roots: Anchoring Your Business, please contact Liz Fidanovski at [email protected].