Growth: New Markets For The Kids
The businesses that built the wealth of the family in the last generation will not be the same businesses that continue to develop that wealth in the next generation — markets evolve, opportunities come and go, and technology has its impact. Our eye must always be to the businesses that will allow our children and their children to continue the ‘family business’.
What new markets are you seeding the family business into?
I am a firm believer that the family business is and can be a wealth generator and the glue that binds families together over generations. But those businesses must be enduring, which means they must be evolving.
A passive investment portfolio created and grown in one generation from business profits, and capital, does not represent a ‘family business’ in the next generation. A family business must be active and employ family members to carry with it the benefits of unity and purpose — otherwise, it is just an income flow.
The businesses that made money and were successful for the last 50 years will have evolved and changed over that time. The customer needs those businesses met may well continue, but the value the customers expect and how that value is delivered will be different.
The capability that the business requires to deliver a customer value that continues to outcompete others and generate the profits and wealth that the growing family seeks will have significantly changed.
And the character, skills, interests and competency of the next generation of family members will not be the same as their parents or grandparents.
Changing markets, changing capabilities and changing leadership team, all lead to evolving, emerging and new businesses.
Adding all of that together and the business strategy for family businesses must always be to identify and invest in new emerging businesses that will create the foundation for the family businesses to continue successfully across many generations. Yes, it will likely include the current businesses that will evolve to meet new needs and challenges, but it will also include other businesses, related and unrelated.
Bear in mind, growing families require growing businesses to thrive.
As the current business leader, you must have your eye to seeding the entrepreneurial spirit of the next generation, developing their business experience and capability and in partnership with them, establishing the next generation’s profitable businesses.
Your true legacy as a family business leader is what you have seeded in the next generation.