The Benefits of Multi-Generational Businesses
Family businesses benefit when multiple generations work together. Here are five of these benefits. I got this list from Jessica Thiefels at nextavenue.org.
Different Ages Offer Unique Perspectives
I thought the first point was insightful. Because of rapid change and differing reference points (à la When Generations Collide), it has been clear to me for some time that older generations have fundamentally different views of work, life, and ethics than the younger generations. Both have something to learn from each other, so having different ages working in the same family business can be healthy if conflict can be resolved and both generations give and earn respect.
Turnover Rates are Reduced
In terms of reduced turnover rates (9% for family businesses vs. 11% for non-family businesses), I find the distinction minor. While new talent acquisition is more expensive, family businesses often overcompensate both family members and employees (at least in my experience), so the two seem to offset each other.
Family Pride Fosters a Reliable Work Ethic
Some of the largest family businesses that have succeeded have done so because of their understandable pride in their family name. I recall growing up that there was a commercial on TV about Smucker's jams and jellies - the last line in their commercial was this: "With a name like 'Smuckers', it has to be good." While their family name was a bit odd, they turned it into an asset and offered a reliable product based on a reliable name.
Lifetime of Experience
The “lifetime of experience” is the one point I found most interesting.nbsp;It stands to reason that if a child is raised in the family business, there is an inherent familiarity with the business itself that can’t be learned in another way. Having been an interim CEO for several businesses from $1M to $24M, I can attest to the truth that it takes 6-9 months to learn a business. 2nd- and 3rd-generation family members who grow up working in the business don’t have this learning curve and absorb their parents’ experiences, leading to the notion of a “lifetime of experience”. To my way of thinking, these benefits can exist only when other factors also exist:
Proper balance between family roles and business roles (i.e., I’m your dad at home but your employer at work) – building and maintaining good family relationships that don’t include the business
Emphasis on demonstrating unconditional love and acceptance between family members, especially when some family members work in the business and others do not
Practicing forgiveness when one family member wrongs another – without forgiveness, grudges are held and become entrenched springboards to future clash points, dredging up old hurts and wrongs
Accepting and celebrating differences between family members without a view to how such celebrations impact the family business Fa
Families are difficult in and of themselves. Toss a business on top of it, and you’ll find it takes a unique family to be successful both as a family and as a business. If done right, having multiple generations working in a family business can strengthen and enhance both the family unit and the business.