Educating the New Generations of Family Entrepreneurial Owners
Raúl Serebrenik G. and Perla Sultán de Serebrenik
Entrepreneurial Families, Continuity, and Legacy
A call made by the founder of a renowned and important food-sector company in Latin America toward the end of 1977 brought to life the yearnings and desires of the new generations for the continuity and long-life of family entrepreneurial endeavors. The academic environment of those years showed that little or nothing was known about the dynamics surrounding family enterprises, but only what existed in the traditional literature of the time, i.e., human conditions and family relationships.
Indeed, this company founder, self-taught, and with no certified academic background other than just his own experience and skillsets, was known for interacting with various successful and thriving entrepreneurs. Their children would be sent to boarding schools and colleges abroad, as part of the entrepreneurial family strategy in preparing the new and forthcoming generations, who were supposed to become the leading administrators of the family business in decades to come. Unfortunately, things did not always turn out as expected, since it was planned unilaterally by the parent founder.
Patently, some of the children didn’t face or consider the challenge of the planned family business strategy as something to be taken seriously and committed to, but they took it more as if the parent founders were trying to “getting rid” of them by focussing more on what they considered as a priority and most favorite of all: “The Company.” Unfortunately, the business enterprise would eventually be sold because of ever-increasing family conflicts, unable to be solved in a right and timely fashion.
In the course of the time, the money coming from the sale of the company would then be reinvested in small investments or distributed among the family members, without really achieving the notable gains that the family company would have otherwise attained. We may conclude that the history of this family enterprise became one more figure in the statistics of the overwhelming number of enterprises that ended up in the family company cemetery.
Recent years have shown an abundant proliferation of research work, studies, and publications made on the subject of family enterprises, reaching unprecedented levels. The material available today, as well as the knowledge developed by some advisors, have all given the matter much relevance. Although a lot of the material published was more on the anecdotal side and less having academic substance, there are nevertheless important publications characterized by their in-depth content and meaning, which have benefited many an entrepreneurial family.
It is precisely in these sources of knowledge that a great deal can be found to provide solutions, especially for those family members who plan to prolong the life of their business or its wealth for subsequent generations.
From interacting with 200+year-old companies on different continents, to have and implement a continuous improvement strategy cannot be overemphasized. It is necessary to define how and what subjects family members should concentrate on. This should be aligned with their talents, abilities, and knowledge which require continuous improvement if one is to consolidate a successful strategy of continuity for the family business.
Tools such as the Serebrenik Model for Consolidating Entrepreneurial Dynasties (Serebrenik, Entrepreneurial Dynasties 2012), have played a critical role in diagnosing, designing, and structuring a Family Business Training Program.
We are convinced that these unique Training Programs for Business Owners must be designed and structured to the particular needs of the business and family members involved, depending on the family’s particular strategy and taking into account the historical moment at the time and challenges facing the family.
We have clearly identified shortcomings in two fields that will leave a mark now and in the immediate future so that families must ready to apply them to their own particular business context, namely the business applied technology and the soft skills that will guarantee the needed required knowledge in order to lead the family company on the road to a long-lasting and stable existence.
We should note that some of these enterprises, known for their longevity, are quite serious about what sort of training their company family members should pursue. In fact, in certain cases, they hire the services of what we know as the CLF or the Chief Learning Officer. The latter is responsible for the design, structure, assessment, evaluation, and putting into action these particular Company Family Training Programs.
The knowledge acquired in this area and the ever-increasing professionalism of subsequent generations should imply a strong motivation for the continuity and success of family member enterprises.
Unfortunately, although the figures show a high rate of disappearing family businesses due to lack of- or inadequate academic training, it continues to remain as one of the main causes for the disappearance of such businesses and their wealth worldwide.