Most family business owners would like to see their business passed on to the next generation, however, it is estimated that close to 70% of them will not survive into the 2nd generation and 90% will not reach the 3rd generation. Many family-owned companies are some of the most respected and best performing businesses in the world. Every day family businesses are a major growth driver in their markets and have a unique impact on their community. But maintaining a family-owned business can be difficult.
Despite family businesses’ inherent strengths and economic significance, these companies deal with unique challenges. Generational transitions, major investment decisions, leadership appointment and profits sharing can be sources of discord between family members.
Family-owned businesses must be aware and manage any possible conflict between family and business on a regular basis. This is important for family companies to maintain an easy progression through each generation. Establishing a balance that takes advantage of the best characteristics of family and business is difficult, however, it can have great rewards if done well.
Profitable Wisdom family business consulting and family governance helps families, owners, and managers navigate the challenges of leadership, succession, and governance across generations. We believe that the critical first step for family companies is to build alignment among family members around the family’s philosophy and vision for business and ownership. Our family business advisors work with owners and family members to develop strategies for managing the all-important family component and ensure a stable transition between generations.
Business and Family Governance Consulting
It is important to develop a governance framework that keeps business and ownership separated and clearly define a process for families and owners to resolve family and business matters. The right solution could be creating Family Councils, Owners’ Councils, Advisory Boards, etc. Profitable Wisdom’s family governance advisers bring global knowledge and experience to help you create the appropriate governance frameworks and establish the area of activity of these bodies. Based on a clear assessment of the strategy and the ownership structure, we work to assist our clients in the competency-based selection of independent directors and advisers to get these governance mechanisms in action.
Contact us to learn more about our family business consulting and family governance services.