Global Research on Family Firms has emphasized the need for succession planning and development of next generation to ensure survival & growth of the business across multiple generations. However, the much needed focus on succession planning and next gen development may become irrelevant, if family firms do not know how to engender the entrepreneurial spirit in successor generations. On the contrary, when a family is highly concerned about providing generously for their younger generation members and to protect them from painful consequences, it works directly against the entrepreneurial spirit.
According to Michael J. Roberts and John A. Davis, Families that want to stay in business for generations don't have a choice but to encourage entrepreneurship in and out of their family company. It is a known fact that the entrepreneurial spirit is mainly demonstrated by the founder(s) of the company. The heirs of the founder and later generations of the family are expected to take care of and grow the founder's creation; they are not expected to be entrepreneurs themselves. In fact, attempting to reinvent the family company can even be perceived as being “disloyal” by the family.
So, why do some families stay financially successful over generations and others don't?
- Successful families see important changes in their industry and adapt by diversifying into new activities that can grow. This means, successful families are entrepreneurial.
- Successful families flourish because they invest in productive activities (including the development of the next generation), emphasize growing assets, and consume relatively little of their wealth.
- Successful families remain reasonably united, keeping supportive members loyal to one another and to the family's mission.
One of the biggest advantages of investing in family entrepreneurs can keep talented members contributing to the broader family's wealth and mission thereby ensuring the long-term sustainability and growth of the family firm.
Given that Family Entrepreneurship plays a significant role in Long-term Sustainability of Family Owned Business, PFBI aims to:
- Promote thought leadership and research on Family Entrepreneurship in the Indian context
- Offer a uniquely designed learning program on Family Entrepreneurship in collaboration with EDI
- Provide incubation opportunities in entrepreneurship for members of family owned companies