Book: "Generation to generation: Life Cycles of the family business"
- chipalexandru
- May 17, 2023
- 2 min read
"Generation to Generation: Life Cycles of the Family Business" by Kelin E. Gersick, John A. Davis, Marion M. Hampton, and Ivan Lansberg is a seminal work in the field of family business studies.
The book introduces the concept of developmental stages in family businesses and provides insights into the unique challenges and opportunities they face. The authors present a comprehensive framework called the "Three-Circle Model," which describes the interaction between three subsystems: family, ownership, and management.
The book identifies three main developmental stages in family businesses:
Start-up and early development: In this stage, the founder(s) establish the business and begin to involve family members. The key challenges include creating a viable business model, developing a strong market presence, and building a solid foundation for growth. Family members usually have clearly defined roles, and the boundaries between family and business are often blurred.
Key learning: It is crucial to establish a clear vision for the business and develop effective communication channels among family members to ensure alignment of goals and values.
Growth and expansion: In this stage, the business experiences rapid growth, and the family expands its involvement in the company. The challenges include managing the increased complexity of the business, professionalizing management, and addressing the need for succession planning. Family members may have overlapping roles, which can lead to conflicts.
Key learning: Implementing sound governance practices, such as establishing a board of directors and formalizing decision-making processes, can help manage the complexity and ensure a smooth transition to the next generation.
Transition and continuity: In this stage, the business faces the challenge of transitioning leadership and ownership to the next generation. Succession planning becomes a critical issue, and the business must address potential conflicts between family members and the need to maintain a competitive edge in the market.
Key learning: Developing the next generation's leadership skills, fostering a culture of open communication, and having a well-defined succession plan can help ensure the continuity and long-term success of the family business.