Enterprise longevity vs. business survival

A recent article in The Practitioner -- an online publication of the Family Firm Institute, an organization for professionals who advise and study family enterprises -- pointed out the difference between "firm survival over time" (continuity of a family business through the years) and "longevity of a family enterprise" (a family's ability to create wealth and value over generations).

The Practitioner article -- by Pramodita Sharma, the Sanders Professor for Family Business at the University of Vermont's School of Business Administration and a visiting scholar at Babson College -- argued that family enterprise success can be defined in ways other than leadership transfer from one generation to the next. "Both the creative destruction of firms and pruning of the enterprising family are integral parts of longevity of an enterprising family ....," Sharma wrote. "Recent reviews of the research on succession, governance, professionalization and performance all point in the same direction -- that one size does not fit all and the overarching numbers of ‘success' are insufficient to capture the complexity and heterogeneity of family enterprises and their pathways to success."

Family Business Magazine's cover subjects for May/June 2014, the Power family, sold J.D. Power and Associates to McGraw-Hill in 2005. The Powers are now working together on investment and philanthropic ventures and have implemented family governance structures. Though they no longer run their company, the family is continuing what Sharma refers to as the "pursuit to create value and wealth over generations."

A legacy business that continues for 100 years or more is truly something to celebrate. But that's not the only road to family enterprise success. Today's researchers make a strong case that we must reorient our thinking.

OTHER RELATED ARTICLES

  • Helping you navigate through this crisis

    As COVID-19 continues to spread around the world with devastating effects, first and foremost, we are focusing on the health, safety and wellbeing of our employees, families, customers and communities...

  • Media laud family firms' COVID-19 responses

    Family-controlled and family-owned companies’ responses to the COVID-19 pandemic are receiving media attention.Tim Boyle, president and CEO of publicly traded, family-controlled Columbia Sportswear,...

  • Survival strategies to navigate your family business through the pandemic

    Family businesses are the backbone of our U.S. economy. Yet many are in serious jeopardy due to the unprecedented coronavirus pandemic. Most businesses are now experiencing significant revenue decreas...

  • Family-owned store chain donates supplies to hospitals

    As the COVID-19 pandemic grew, nationwide retailer Harbor Freight Tools removed protective gear that could be used by medical professionals from its shelves and distribution centers. Then the company,...