Stewardship for Long Lasting Family Firms
Families that have been successful in maintaining their legacy and wealth over time, have done so by instilling a sense of stewardship in their family members and especially children / next generation.
The steward perspective in family business means to receive the business from predecessors, grow the business, the family wealth, the family itself, and then pass this multifaceted inheritance on to the next generation in better shape than it was in when it was received. Stewardship of a family business aims at building health and vigor and creating an ever greater family legacy.
A “Steward” is likely to be emotionally committed to the family firm. To such a person, legacy is important. On the other hand, an “Inheritor” sees their ownership in simple financial terms. Such a person is more like an arms-length investor. An inheritor mindset may lack the sense of togetherness with their other siblings and may sometimes even lack emotional commitment to the family firm. In terms of family culture, a person who is a “Steward” has an inward looking orientation i.e. they tend to look in towards the family unit. A person who is an “Inheritor” looks outward. This means they tend to look away from the family unit and they like their independence.
A sense of stewardship is also necessary when planning for succession in the family business. Succession planning typically focusing on selecting good management, but the development of strong owners is critical. Without a culture of stewardship, good management can be sabotaged by entitled owners. Entitlement leads to passiveness about how the company is run and managed and an unwillingness to reinvest in new initiatives.
Through successful stewardship, your family business can build a strong and long lasting legacy.