There’s a proverb repeated across cultures and continents that family business leaders know all too well:
“Shirtsleeves to shirtsleeves in three generations.”
As the proverb goes: The first generation builds wealth, the second maintains or grows it, and the third loses it.
The saying exists in nearly every culture because the pattern is so common. The first generation builds through sacrifice, resilience, entrepreneurial risk, and an unwavering sense of purpose. The second generation scales the business through systems, structure, and professionalization. By the third generation, the connection to the founder’s vision can weaken. Misalignment grows. Conflict simmers beneath the surface. Entitlement can quietly replace stewardship.
Eventually, what took decades to build begins to erode.
But here’s the important truth: This cycle is not inevitable.
The most successful enterprising families don’t leave continuity to chance. They intentionally build engaged, aligned, and competent teams across all 5 MOUNTAINS®.
It all starts with building family muscle through nurturing healthy relationships, communication, and decision-making. And by leaning into awkward conversations.
Conversations about expectations, leadership, ownership, fairness, purpose, succession, and legacy. The conversations many families delay because they feel uncomfortable until avoidance becomes far more costly than the discussion itself.
High-performing multigenerational enterprising families also recognize that governance is not bureaucracy; it’s clarity.
Clear is kind.
Governance structures help families make decisions, navigate conflict, define roles, and preserve trust as complexity increases over time. Without intentional governance, even healthy families can become vulnerable to misunderstanding, fragmentation, and relational drift.
Equally important is the intentional development of future generations.
More important than simply transferring assets, enterprising families must transfer values, responsibility, and stewardship. Wealth alone does not prepare rising generations to lead. Sharing in ownership alone does not create alignment. Future leaders must understand not only what the family has built, but why it was built in the first place.
The families who flourish across generations tend to redefine the traditional narrative:
And stewardship is not passive preservation.
True stewardship means preparing future generations to responsibly grow, reinvent, and strengthen the family enterprise in ways that honor both the past and the future. It means cultivating leaders who can adapt to changing industries, family dynamics, and economic realities while remaining anchored in shared purpose. It means learning to “speak with one voice” around the family’s values, vision, and long-term aspirations for the enterprise.
The goal is not simply surviving to the third generation.
The goal is empowering future generations to lead what comes next.
At DVFBC, we have the privilege of guiding enterprising families through the important conversations and structures that help create long-term clarity, alignment, and continuity. Whether families are navigating succession, ownership transition, governance development, or next-generation leadership, the work is ultimately about building the capacity for both the family and the business to evolve and flourish together.
Enterprising families don’t have to navigate their 5 MOUNTAINS alone. DVFBC provides guidance, counsel, and partnership through every phase of a family’s business journey.
Because enduring family enterprises are not built by accident.
They’re built intentionally — one conversation, one decision, and one generation at a time.
Jennifer serves as a 5 MOUNTAIN® Advisor & Coach here at DVFBC and chairs our Peer Groups.