Pay attention to the needs of the business
As families divide profit among more family members, sustainable growth and profitability of the business become more important. Pursuing these goals successfully can be difficult in family enterprises that are beholden to tradition and how they’ve always done things. Flexible ones cultivate ambition and innovation within the family while also bringing in new talent.
Successful families embrace change and foster entrepreneurial spirit among successive generations of family members as the enterprise matures. They navigate the unpredictability of technology and sudden disruption by deploying strategies that account for broader business capabilities.
Manage risk to preserve assets for the long term
In family enterprises, private assets and company assets are often linked and intermingled. As the complexity of managing the family wealth increases, families look to professionalize this process through family office functions. This allows them to develop a comprehensive risk management framework, quick decision-making routes, and tax planning strategies that account for both personal and corporate needs.
Successful families leverage their resources to optimize costs and enable growth. To better protect their assets, they establish systems and processes to manage their wealth in a manner that achieves operational efficiencies and cost savings while reinforcing family values and fostering family unity.
Navigating these dimensions of family, values, business and assets requires careful consideration of how each of them stands within the DNA of an individual family enterprise. While every family enterprise is unique, successful ones have much in common. To emulate their success, family enterprise leaders can use a model, such as the EY Family Enterprise DNA Model, to better understand their personal and business agendas. That understanding can help the business and the family succeed across generations.