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Change is essential in any business. Times change, competition changes, markets change — and every business must adapt. But change is hard, especially in a family business. As a family business consultant, I have seen first-hand the difficulties that arise when attempting to create change within a family business, and it’s almost always a generational divide. According to Dennis Jaffe, in his article Moving a Family Business Beyond the Founder’s Vision, the resistance to change in a family business often comes from the initial founder or current generation in charge. Jaffe writes:
“Many entrepreneurs generate a huge amount of wealth that they want to pass on to their children and grandchildren. They are not yet a family business, but they want to become one. They want to see the wealth used wisely, and their business and investments to continue to add value. But the mindset that led to their success often undermines how open they are to the changes needed to continue business into a second generation. It’s the next-generation dilemma: How do succeeding generations preserve the founder’s legacy and continue to build a thriving family enterprise?”
I have seen this dynamic play out dozens of times, and 100% concur with Jaffe when he lays out the most common traps founders fall into that prevent change. According to Jaffe, those traps are:
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