![\"ID-100220720\"](\"https:\/\/wp-media.patheos.com\/blogs\/sites\/174\/2015\/09\/ID-100220720.jpg\")
<\/a>Some years ago The Harvard Business Review reported that 97% of all family-run businesses fail by the third generation. \u00a0The article theorized that the reason for this rate of failure can be traced to the generational changes that take place in the lifespan of those businesses.<\/p>\nI no longer recall exactly how the article framed the analysis, but my memory of it and my version of the argument goes something like this:<\/p>\n
The founding generation<\/em><\/strong> has the vision for a family business.\u00a0 It makes the necessary sacrifices. \u00a0It is in in the effort for the long haul and the first generation gives the enterprise the kind of close attention that we associate with startups of that kind. \u00a0\u201cIf we don\u2019t care, no one will care,\u201d is the motto of a founder.<\/p>\nMembers of the second generation are the inheritors<\/em><\/strong> of the vision.\u00a0 They still know some of the stories associated with the effort to begin a new enterprise.\u00a0 They also participated \u2013 even if indirectly \u2014 in some of the sacrifices made.\u00a0 As such, they continue to share some of the motives that drove the founding generation and they retain some of that focus. \u00a0Under their watch-care the circle of leadership is enlarged as the business itself grows.\u00a0 Authority is shared with others, but the challenge lies in cultivating a sense of responsibility in that new cohort of leaders.<\/p>\nThe beneficiaries<\/em><\/strong> are the third generation.\u00a0 As I said earlier, it is, here, according to the article from in HBR<\/em> that family businesses fail.\u00a0 The beneficiary generation can and sometimes does continue to shoulder responsibility for the enterprise.\u00a0 But all too often, beneficiaries take the family business for granted and treat it as an entitlement.\u00a0 It draws on the wealth generated by the enterprise, but far too often the third generation fails to develop the strengths of the company that is now theirs.<\/p>\nWhy and how these generational cycles emerge is a complex question.\u00a0 Having reflected on the pattern, I\u2019ve become convinced that these patterns surface in larger, more complex organizations; and often in organizations that are far older.\u00a0 Major initiative and interruptions can, it seems to me, begin a new generational cycle.<\/p>\n
What leaders need to ask themselves is this: Are you a founder, an inheritor, or a beneficiary?\u00a0 There is room for leaders with a first and second generation mindset.\u00a0 Beneficiaries are always in danger of losing focus and sacrificing the gains made in the name of collecting their reward.\u00a0 The often troubling excuse given for that kind of behavior is \u201cthe new normal.\u201d\u00a0 But that is often just that: an excuse.<\/p>\n
\u00a0<\/p>\n
Photo by\u00a0<\/span>sheelamohan<\/a>\u00a0used with permission from freedigitalphotos.net<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"Some years ago The Harvard Business Review reported that 97% of all family-run businesses fail by the third generation. \u00a0The article theorized that the reason for this rate of failure can be traced to the generational changes that take place in the lifespan of those businesses. I no longer recall exactly how the article framed […]<\/p>\n","protected":false},"author":240,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[217,215,216,118,218],"tags":[],"class_list":["post-1503","post","type-post","status-publish","format-standard","hentry","category-beneficiary","category-founder","category-inheritor","category-leadership","category-the-new-normal"],"yoast_head":"\n
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Schmidt, Jr. is inaugural holder of the Rueben P. Job Chair in Spiritual Formation and a Senior Scholar at Garrett-Evangelical Theological Seminary in Evanston, IL. He is also Vice Rector at Good Shepherd, Brentwood, TN; an Episcopal Priest; spiritual director; retreat facilitator; conference leader; and writer. He is the author of numerous published articles and reviews, as well as several books: A Still Small Voice: Women, Ordination and the Church (Syracuse University Press, 1998), The Changing Face of God (Morehouse, 2000), When Suffering Persists (Morehouse, 2001), in Italian translation: Sofferenza, All ricerca di una riposta (Torino: Claudiana, 2004), What God Wants for Your Life \ufeff(Harper, 2005), Conversations with Scripture: Revelation (Morehouse, 2005), \ufeffConversations with Scripture: Luke \ufeff(Morehouse, 2009), and The Dave Test (Abingdon, 2013). He and his wife, Natalie (who is also an Episcopal priest), live in Arrington, TN. 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