What do family businesses need to survive and thrive? A recent large study by McKinsey & Co. zeros in on four key factors:
(1) Maintaining entrepreneurial vision;
(2) Strong governance – ideally, an active board of directors that steers the business, and a separate council to manage family matters;
(3) Effective use of “family capital” — the family’s culture, aspirations and network;
(4) A plan for motivating and developing the next generation as responsible shareholders.
Having worked with many family businesses over the years, I am not surprised by these findings. Actually, when all these factors are in place, I have seen that this often creates an engine for growth that can take the business to the next level of expansion and opportunity.