Every family business inevitably confronts the interruption of how to ensure continued involvement and interest through multiple generations, making sure that every member is heard and represented. The solution is creating a family of entrepreneurs.
For a time, my father chose to follow a different path than his family business, taking up engineering – a choice that later became a significant benefit to the family business when he returned. Seeing the benefits of this kind of external growth and education, he always encouraged other family members to take the same opportunity. “Follow your heart,” he liked to say. “
In a previous article, I spoke to the necessity of evolution within your business – the need to change and welcome new opportunities. The ability to do this and encourage that confidence in future generations starts with fostering entrepreneurship in your family. I alluded to my parents creating a corporate structure that allowed for this. As part of that structure, my parents made it possible for members of our family to collectively be able to engage in new business ventures of their own interest, allowing for creativity without affecting the core business while also providing a certain amount of necessary financial support. This aspect of our family business structure is insulated from the fortunes of the main business, a strategy similar to how Steve Jobs isolated his Macintosh team early on, separating them from Apple so that their concept for Mac would be entirely unique and successful in its own right.
The implementation of this fund has allowed our family to find our own paths toward creating a successful company while not potentially damaging the core of the family business. It is a construct of family business that has worked well for many others, including the family-owned Hero Group in India.
A Case for Smart Entrepreneurship: The Hero Group and Brooke & Sons
Founded as a bicycle manufacturer in the 1950s, the Hero Group grew to become a major manufacturer of bikes by the 1980s— big enough to grab the attention of Honda, who chose the Hero Group over several other competitors to manufacture its motorbikes. Today, Hero Group makes close to seven million motorcycles a year and is still a solid family business, with five representatives of the current generation working under the Hero umbrella.
These five family members, however, aren’t exactly in motorcycle manufacturing. They were each given the same opportunity—to come up with a business idea that appealed to their own interests. As long as they met certain criteria, they were given the freedom and faith to grow their business and, thus, grow the Hero Group.
Sometimes, however, starting a smaller business under the family umbrella isn’t an option. Sometimes the creativity and innovation of the newest generation is the only determining factor between success and failure. With Brooke & Sons, chairman Mark Brooke observed, “You need to understand your own talents” when it comes to family business. For the Brooke family’s textile industry, that creative direction was in pursuing a reinvention of the family business that played to Mark’s innovative, idea-driven talents while also allowing the family business to thrive. Today, the Brooke name still stands for quality, but that quality has moved from top-tier woolen textiles to superior renovations of architecture to fit today’s quality small business needs.
Encourage Change and Continuous Education
No matter what the course, or who is embarking on it—whether it is a company CEO driving in a cutting-edge direction or a family member taking a chance on a new division of business—it is vital that he or she has the capability and know-how to make it work. Education, no matter if it’s through experience, higher learning, or a combination thereof, is immeasurably important and is the best way to cultivate positive and beneficial growth.
When families encourage this continuous education built on a foundation of core knowledge, they will enter into new and exciting markets, while significantly growing their family businesses. Learn more about how to foster this within your family by visiting www.ramezbaassiri.com.