May 20 2013

The Importance of Entrepreneurial Spirit

At the May 14 FORUM, Elwood Martin, non-family President of Shady Maple, recommended a video about 9 year old Caine Monroy as an example of entrepreneurial spirit. Please click here to view information about Caine and his cardboard arcade. Why is an entrepreneurial spirit important?

An entrepreneurial spirit in the multi-generational business family is important due to the change in markets created by technological advances and human growth. As a developing society in the technological age of choices and information flow/connectivity, we are no longer satisfied as our agrarian forefathers/mothers with meeting our basic needs of food and shelter. This new era has given rise to heightened anxiety and shame, and has produced the most obese, anxious, addicted population in human history. As a result, we are quickly becoming disillusioned with all forms of institution, including family.

Therefore, the definition of a family business must be reworked in each generation – with the shared values translated into the present circumstances facing the family and their business. This is about adaptive change and reflective responses in order to make decisions and influence both the family and the business for the common good of all stakeholders of the enterprising family. The challenge facing this generation will take faith, courage, clarity and a sense of higher purpose.

Based on books like Drive by Daniel Pink, people are satisfied when they are mastering something. According to Malcolm Gladwell, author of Tipping Point and Blink, it takes 10,000 hours to accomplish mastering something; therefore, entrepreneurs are uniquely qualified for the huge undertaking of reworking and reinventing the family business.

Unfortunately, in family businesses, so often the next generation is asking the wrong question. Am I as good as my dad/mom/brother/cousin/family business leader? The expectation placed on and accepted by the next generation often leads to an unhealthy co-dependency on the system, when boundaries of governance are not clearly defined in ownership, business leadership and family.

The questions should be, “What am I uniquely designed to do, because of my experience, education and natural desires/curiosity?” In order to answer the deeper “Why” questions, which are foundational for an entrepreneurial business, the next generation must become clear about how they can participate in the mission of the business. By reflecting on the Entrepreneurial spirit of the past and present generations, the cohort of business family leaders and advisors begin finding connections with a competency, either already developed or in development with the next generation. Preparing and planning the multi-generational business transfer will take innovation and reinvention for the business to continue to flourish.

Entrepreneurialism allows the next generation to build autonomy. Autonomy is what creates fulfillment in our working roles in family business. So often there is not enough autonomy given to the next generation because of fear and unspoken concerns. Or, too much autonomy is given because the previous generation is comparing their experience with the next generation, not recognizing the natural evolution and growth of the systems now in play. This lack of understanding of the need for leadership development in the next generation creates an isolating environment, inhibiting the next generation from finding their own voice and performing at a high level in the business.

In order for the next generation to get autonomy they often need 3-5 years of work experience outside the family business. This allows them to succeed on their own and build emotional capacity.

There are very few true entrepreneurs, according to the work in Idea to Exit by Jeffrey Weber. This is because to be a true entrepreneur you will have to take risk. Risk taking is not an easy skill to learn – it will mean activating creativity and problem solving. It will mean failure, and learning from failure.

Since most family business are entrepreneurial (or were at one time), we believe that with the right resources and support, multi-generational family businesses flourish when they begin to think, behave and act out of an entrepreneurial spirit. Legacy families find ways to cultivate an entrepreneurial spirit in each generation.

Contact us today to find out how we provide support and integrated counsel for your legacy family journey!

by Scott Hackman, Family Business Advisor, Delaware Valley Family Business Center.

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