Indeed, according to the Family Firm Institute, a research group in Boston, only 30% of family-owned businesses make it to the second generation, 10% to the third generation, and 3% to the fourth. Though the rate making to the next generation is extremely low, some company’s could continue their company’s history of succeeding to their own descendent by abiding to the following aspects.
Plan for the future
According to William O'Hara, the executive director of the Institute for Family Enterprise at Bryant University in Rhode Island, the biggest mistake that most family businesses make is not planning for the future. "The companies that have trouble are those that don't look ahead, whether about succession or future products," he says. Regarding the happy few that do make it, O'Hara says, "Those that have been around for centuries deal in products that respond to human needs."
Need to follow the trend and change
Everything needs to be changed. For example ,nobody have found a reason for the luxurious luggage maker T. Anthony which is one of the family companies known for its high quality and high price should change. However, the CEO, Michael Root says that the company strives to keep the brand current without abandoning its founding principles are the main consideration. As a result the company started to produce several products including added wheeled suitcases, duffel bags, computer bags, and cases for electronic gadgets. Now making more profit than used to.
Stewardship
Another important aspect is to preserve stewardship. The CEO of highly succeeded family company named Young Electric Sign Co, Thomas Young says “Another way to describe it is our principle is one of stewardship rather than ownership and there has been a consistent commitment, starting with my grandfather to the present of not selling the business of going public.”
Family and outside Management
The last point you that you need to keep in mind when you run a family company is to if needed, somebody who is outside of your family. Instead of succeeding the company to the next generation who is not interested in the company, it is better off to hire someone who wants and willing to run your company.
Opinion
Especially in Korean society, lot of family owned companies are controlling the whole Korean economy. Though they have a responsibility to sustain and consider the whole economy, they often make terrible mistakes only thinking about their family’s fortune. I think big family owned companies such as Samsung, Hyundai of SK need to read this article to change their attitude toward the companies.
Annotation : Stacy Perman, "Centuries-Old Family Businesses Share Their Secrets", Businesweek, 14 May 2008,
URL:http://www.businessweek.com/smallbiz/content/may2008/sb20080514_431232.htm?chan=smallbiz_smallbiz+index+page_top+small+business+stories
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