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May 2022 < Back

The "Learning Family Model" for Multigenerational Family Firms

As the business family and the business simultaneously grow and mature, the family enterprise is constantly challenged by new tasks and issues. The growing family business needs to become a “learning organisation”

- Randel Carlock (a business professor, coach, family therapist, entrepreneur, and former CEO and Chairman of a NASDAQ listed company)

Carlock’s learning family model illustrates that there are no short cuts to achieve the steps from awareness to stewardship. It is an important journey of evolving through a constant process of learning and bringing in changes.

The starting point of this journey involves learning to recognise and manage the complexity implied by the three-circle model.

It is important to keep in mind that the three circle model is static (a snapshot in time). However, the family businesses are constantly changing and evolving across all the three dimensions of the model.

The Nine Steps of Learning Family Model:

1. Becoming aware of family business challenges - The family learns about the unique challenges created when family owns a business, and how the goals of family harmony and success of the business can lead to different complexities, necessitating the anticipation of future risks.

2. Becoming a learning family - The family commits to a model that focuses on developing its organisational skills with a goal to improve the family’s effectiveness in addressing business and personal issues.

3. Building a shared vision and family team - Families learn to build this vision by aligning individual and family values and goals. The vision becomes a guide for planning, decision-making and action.

4. Practising communication and conflict-resolution skills - Family members practise communication skills, gain insights and explore sensitive issues, build trust and take risks.

5. Sharing power across generations - This is an important step that demonstrates commitment to a planned transition. It requires the senior and successive generations to be committed to transferring authority for managing the family firm.

6. Strategically aligning the family and the business - The family starts to craft a strategic plan that reflects its shared future vision. It helps the family address the continuous changes in its enterprise.

7. Creating governance mechanisms - Family develops the appropriate family and business governance structures. Shareholders and management agree to review performance and strategy regularly.

8. Transferring ownership and control - Ownership and control are transferred between generations, completing the family succession process.

9. Practising stewardship - Encouraging a balanced and long-term perspective on plans and decisions is a core value reflected in the company’s policies, practices and strategies. Stewardship takes many forms and is shaped by the family’s experiences, traditions and vision for the future.


Critical steps to becoming an effective family enterprise

Adapted from:

Family Enterprises: The Essentials by Peter Leach

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