Even though family businesses are the lynchpin of the global economy, few family business survive multiple generations. In spite of the financial success of family businesses and the intrinsic rewards associated with the opportunity to build a family legacy, the evidence suggests that few families are able to overcome the challenges of maintaining a family business system. The 3 circle model which demonstrates the linkage between business, family, and ownership provides a useful framework for understanding the dynamics and challenges of family businesses.
There are many steps families can take to prepare for an orderly continuance of the family business system. However, there are key stress points which can derail a family business system. Those stress points. include:
* Generational transition in governance and business leadership,
* Complex infrastructure redesign involving organization, systems and processes due to business growth or competitive pressure,
* Value management conflict arising from dividend demands or perceived/real wealth destruction, and
* Business survival or turnaround crisis requiring significant and immediate reaction
When confronted by these major events, families should seek intervention by an outside consultancy with a comprehensive approach within and across each of the 3 circles. Experienced and skilled outsiders can bring enormous value by reducing tension, resolving issues, and preserving wealth. The Catalyst Consulting Collaborative offers this expertise with a seamless methodology for integrating the family, ownership, and the business in a seamless transformation plan.
Choosing the right consultant is a challenging process. The Family Firm Institute is an excellent resource for helping owner-managed businesses make the right choice. In dynamic situations, we believe C3 offers the most complete solution.
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