May 20 2013
Entrepreneurial spirit in the next generation

The Importance of Entrepreneurial Spirit

At the May 14 FORUM, we heard from Elwood Martin, non-family President of Shady Maple. He 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 for many reasons. Technology and human advances surround us. New markets emerge due to that evolution. We are a developing society in the technological age of choices. As a culture, we face an inundation of information and connectivity.

We are no longer satisfied as our agrarian forefathers/mothers were with basic needs of food and shelter. This new era has given rise to heightened anxiety and shame. We have the most obese, anxious, addicted population in human history. As a result, we quickly become disillusioned with all forms of institution, including family.

Therefore, each generation must rework the definition of a family business. In the process, consider their shared values, along with the present circumstances facing the family and business. This is about adaptive change and reflective responses. Each generation learns along the way 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 takes faith, courage, clarity, and a sense of higher purpose.

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

Finding Connections with a Competency

Unfortunately, in family businesses, so often the next generation asks the wrong question. They ask if they are good enough.

“Am I as good as my dad/mom/brother/cousin/family business leader?”

Ownership sometimes places heavy expectations on the next generation. Sometimes they place those heavy expectations on themselves, creating an unhealthy co-dependency on the system. Vague boundaries of governance lead to poorly defined roles in ownership, business leadership, and family.

Let’s ask a different question.

“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.

It Takes Times…And Patience

Entrepreneurial spirit allows the next generation to build autonomy. Autonomy creates fulfillment in our working roles in the family business. So often autonomy creates fear. Ownership can view too much autonomy for the next generation with fear and concern, so they don’t give enough freedom. Or, they give too much freedom after comparing their own experience with that of the next generation, but evolution and growth are natural. 

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. Furthermore, 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 have to take risks. Risk taking is not easy – 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.

Our process can help along the way. Contact us today to find out how we provide support and integrated counsel for your legacy family journey!

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