Private business is the backbone of the American Dream. Locally owned enterprises offer great alternatives for people who feel a little uneasy about handing over their hard-earned cash to faceless mega-corporations. The beneficial effect of small, privately owned businesses on their local economies is well known. Entrepreneurs lower wealth inequality in their communities, create opportunities for employment, and often become fixtures in the lives of their neighbors.
Yet, despite the myriad of ways that privately owned businesses can do good, family-owned organizations can sometimes lose their way. Sometimes this is caused by the lack of structure and oversight that comes with a large corporation, and other times it comes from a lack of cohesion as different generations become involved with the business.
If you’ve wondered whether your business family tree is creating a bit more shade than shelter, Nick Di Loreto and Rob Lachenauer of the Harvard Business Review have identified a few things that you can look out for:
1. Ensure that your family narrative is passed down.
Your business is more likely to stay true to its founding mission if all of its different generations understand why and how the business has faced challenges (and embraced opportunity) in the past.
2. Avoid “sterilizing” your brand by being too professional.
There’s nothing wrong with investing in your business as it scales, but try not to chase “professional” polish too far. If you are trying too hard to emulate the big guys, you might lose the authentic personality that has made you successful.
3. Remember that success is about more than money.
If the purpose of your family business is profit only, you’ll find the priorities of your organization shifting rapidly. If your family seeks to succeed only because they’d like to show off their new wealth or success to their neighbors—they’re actually setting the business up for failure.
It is critical to gauge whether you’re headed toward a sound legacy or a slow decline. Most suggestions will boil down to this crucial point: If you let outsiders determine what the optimal performance metrics are or define what the success of your business is, you’re losing your ability to lead, develop an authentic brand, and focus on the priorities that can help your business thrive for generations to come.
AprilJo Murphy is a Staff Writer at The American Genius and holds a PhD in English and Creative Writing from the University of North Texas. She is a writer, editor, and sometimes teacher based in Austin, TX who enjoys getting outdoors with her handsome dog, Roan.
