I was interviewing the 4th generation son of a business owner recently and asked about his vision for the company. He described a very aggressive vision for growth through acquisitions and diversification into other locations and channels. This kid has been in the family business all of two years! The business has afforded him a very lucrative and flexible job during difficult economic conditions. Having never even been responsible for running a department within the business, I found this vision astounding.
This kid hasn’t had substantial experience struggling with operating losses, employee theft, or inept management and exhibited no understanding of the importance of protecting the foundation of the family’s security, lifestyle and good fortune – the Golden Goose. He wanted to take the fruits of the golden goose, which he saw as an enduring asset, and utilize it to expand his kingdom. I dug a little to determine his motivation for such growth and found his vision was driven by a desire to play and win a game, not by being a steward of a 4th generation legacy.
This is a common trap into which prospective successors fall when they are allowed to play with someone else’s money. A desire to utilize business fruits to gain the whole world with total disregard for the soul. This son has a lot of maturation ahead of him before he will be ready to take over the family business. First and foremost, he will need to understand the family business hedgehog. In Good to Great, Jim Collins describes the hedgehog concept as understanding what you can be as the best. It is the intersecting of 3 components:
- What are you really passionate about?
- What can you do best in your market?
- What drives your economic engine?
This kid had no understanding of what drives his family business’ economic engine. Nor does he have a well-developed idea of what he’s passionate about, except making a lot of money. His ego is currently determining what he wants to attempt, rather than an intimate knowledge of his abilities and what the family business can best be. Hope for ongoing business success, will depend upon many interdependent factors, not the least of which will be respect for the golden goose, understanding of the hedgehog, and a preservation of the soul of the business.
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