Perpetuating the Family Business: 50 Lessons Learned from Long‐Lasting, Successful Families in Business

Citation

Fahed Sreih, J. (2007), "Perpetuating the Family Business: 50 Lessons Learned from Long‐Lasting, Successful Families in Business", Management Research News, Vol. 30 No. 10, pp. 775-777. https://doi.org/10.1108/01409170710823485

Perpetuating the Family Business: 50 Lessons Learned from Long‐Lasting, Successful Families in Businesses is a book that every family in business would enjoy reading. It is a collection of “best practices”, coupled with insightful examples. It gives a thorough perspective of the different stages the family business passes through and highlights some of the major challenges that might be encountered, while trying to give lessons those families in business can benefit from. The author, an eminent scholar in the field, has accumulated experience working with hundreds of family businesses, and was able to bring together a thorough description of the stages of family businesses and live examples on the challenges facing family businesses so that the reader can draw some lessons helpful in the management of his business. He points that of the 20 per cent of the family businesses that survived over 50 years, two‐thirds of them were not growing, and highlights that the perspective nowadays to conduct business can not be through maintaining protected niches in a global economy, which is an added strategic planning challenge. He emphasizes then the importance of leadership and transition.

John Ward in this book undertakes a relatively simple and straightforward approach, a yet by no means easy task, of bringing together the richness of a wide variety of family business topics and structuring them in a concise text. The book is an obvious illustration of his rich experience in the field and thorough knowledge of the subject matter. This allows him to find the right examples for each situation and to fit them into the different stages of a family business, while highlighting the importance of transition and leadership. Although the book might seem well structured, revolving around the three major stages of a family business that the author calls, stage I, the owner‐managed business, stage II, the sibling partnership and stage III, the cousin collaboration, it is somehow misleading to the reader, how the 50 lessons fit in a clear cut way within the different sections. As a matter of fact, the author tried at the end of the book to include appendices to clarify this issue, and to narrow down the dispersion of the subjects. In the appendices, the author tries to specify a step‐by‐step process, to develop the appropriate tools to use for continuity and longevity. The author describes the nature and roots of the challenges facing family businesses while fails to analyze the rhythm of relationships, the patterns and flow of interactions in the relationship and the dynamics pertinent to them. He does not challenge the reader to think from a new perspective.

This book revolves around three major parts, the first part gives the frameworks for family businesses that last, the second focuses on the lessons and the third includes appendices that integrate the lessons into life examples. While this may seem a good structure, however, the body of the work is in part II. So the bulk of the book lies in the second part. Many of the ideas presented in this book can be debated extensively in academic and practitioners circles, for example, the author's attempt to show how family assumptions shape ownership plans and business strategy (p. 36). What distinguishes his work from others is his attempt to structure the stages and narrow them even further to cover a large spectrum of models of families; it is the scope of coverage both across topics and time (stages) that makes it distinguishable. Ward very carefully reviews and references the available literature from which he drew his examples, such as public records articles, newspapers other publications and websites, whenever this is not available, he disguises the names in an attempt to keep confidentiality. The author is not trying to be prescriptive, as he mentions that it is not a “how‐to” book (p. xi), however, he intends to give some best practices for families in business for the present and the future. In addition to his willingness to offer some solutions that he refuses to call solutions (p. 41), but the conditions for family business continuity and success. The author gives the reader some tools to think through “the second stage effects” (p. xi) of the steps he makes today, which is strategic thinking related to family businesses. This makes the book appealing to a wider audience, not only to families in business but to educators as well, scholars, students, consultants and professionals in the field.

The focus of the book stems from the notion that the underlying problems encountered in family businesses find their solutions in the families rather than in the business, irrespective whether the family is first or business first, and from the concept that the lessons can be drawn depending on the stage in which the family in business is. What is quite interesting in the book is that the author talks about the fine balance between family related issues and business‐related issues.

The analysis shows the author's experience in the field and the ideas stem from his personal experiences of consulting and interacting with families in business. The book does not take into consideration the cultural aspects that affect the value system in any family business, in spite of the author's focus on the values of a business and how they should be considered as a focal point. He categorizes all family business problems as common, however, families are unique and contingent approaches should be considered and elements of the situation will then suggest contingent ways of addressing family business issues.

The book is divided in three parts and has seven chapters that end in part II. The book starts with a description of the ultimate management challenge in chapter 1. In chapter 2, the author describes the five insights. Insight 1 that he named “we respect the challenge”, in which he shows the time that it takes a family business to create and put out together a plan. In Insight 2, the author explains that the family business issues are common and predictable yet the perspectives on the same issues are different. Insight 3 reflects that communication is indispensable. Insight 4 demonstrates that planning is indispensable for continuity and insight 5 stresses on commitment, where process is important and inspires commitment.

Then, the author describes the 4Ps, which address the fundamental dilemmas of family business, what the family needs often conflict with what the business needs. The 4P's are the principles that long lasting families in business share. The 4P's are:

Policies before the Need, Sense of Purpose, Process and Parenting.

Chapter 3 entitled “a vision for the future”, describes the different stages of family businesses, stage I the owner‐managed stage where the founder is in control. The second stage is the sibling generation where the siblings co‐manage the business and the third stage is the cousins’ collaboration where the cousins are in leadership.

Part II of the book shows the 50 lessons that the author tries to organize them according to the three stages of the family business.

Chapter 4 covers in detail the owner‐managed business stage and the lessons accordingly from lesson 1 to 11.

Chapter 5 covers in detail the lessons of stage II, the sibling partnership stage, and the lessons are from 12 through 26.

Chapter 6 covers the lessons relative to the cousin collaboration stage, lessons 27‐50, which in majority are family perspective lessons.

Chapter 7 entitled “taking the longest view”, shifts attention to the explanation of how the lessons are integrated and emphasizes parenting as having an effect on many of the lessons, which is a very important concept, often neglected by families in business.

The importance of part III stems from the fact that it offers a concise guide for the reader, as this seems to be needed where Appendix A shows the lessons at a glance and refers to whether the lesson is essential from a business perspective or from a family perspective. While Appendix B integrates the lessons and shows where they fall in each stage of a family business, Appendix C is a helpful checklist as much for families in business as it is to consultants and practitioners.

The author's attempt to conclude the book by appendices was needed to summarize the ideas and concepts developed throughout the chapters, crystallizing the thoughts and bringing unity to the book.

While the author does not take any original empirical investigation in the current book, he builds on previous work and his own rich experience in the field; many of the ideas are already debated in academic family business circles. What distinguishes his work from other similar attempts is the scope of the coverage, be it in concepts or applications, and the separation of the lessons between family lessons and business lessons.

Finally, this book offers scholarly and practical insights in the field of family business and should be read.

The author uses a simple style, very accommodating to the reader, and tries to be exhaustive in his approach. This book is not technical and does not require a thorough knowledge and understanding of the field. It is an excellent reference for those who would like to develop knowledge on families in business and a recommended indispensable reading for those already in the field.