Innovation is key to survival, especially so for a Family Enterprises.
In a recent study, the average lifespan of a company on the S&P 500 in 1964 was 33 years. This had narrowed by 24 years by 2016. This is expected to shrink to just 12 years by 2027. If it is happening to the bigger companies, it will be happening to the smaller companies, and it will be happening in Family Enterprises.
The world is changing fast. Is your business innovating?
Many families rely on their enterprises as a source of income to fund their lifestyle. If this statistic is true for the majority of businesses, then the future prosperity of families is of concern.
Because after the first generation, you tend to see some of these characteristics in the children and the following generations:
- A lack of desire, need or motivation
- Fear of Failure
- Not prepared to take a risk
- Lack of Innovation and Initiative
- Lack of key skills
- Lack of critical experience
"Growing up with financial security tends to reduce risk tolerance; and favour conservatism. Risk is seen as a crisis."
All family enterprises need to be thinking about how they promote Innovation. Is it something that is encouraged and supported across the whole business? Is there a reward for Innovation? With innovation will come some failures, but also successes. It is about learning from those failures that success comes.
So the next generation needs to be encouraged to use their initiative, take a risk, learn from failure and adapt.
Just being a good Steward of the Family Enterprises could mean that you could become a passive Curator of a Family Museum and Archive very quickly.
If you need help developing the Next Generation Leaders of the Family and the Family Enterprise, please contact me.