Borrowed from Your Grandchildren

CHAPTER 4The First Four Generations

Every great family enterprise begins with a family psychodrama. The family has an origin myth about an obsessed, visionary patriarch (only three of our families were started by women, none of them from the United States) who overcomes limited means and creates a thriving business. His wife is a pillar of quiet strength as she raises the next generation, and maybe pursues a less high-profile career. Following this great business achievement, the second generation faces even greater challenges: sustaining the business, dealing with diverging family interests, creating a shared vision of the future, and balancing family justice and fairness with business reality.

By the third generation, a business family faces questions about how to use its wealth, whether family members want to continue to work together, and if so, what they want to do. After a generation or two, the legacy business usually gives way to a diversified portfolio with multiple family assets and entities, including trusts, investments, real estate, a foundation, and even the sale, renewal, or expansion of the original. While the effects of this evolution are readily seen in the family's business and financial activities, the key actions that make this possible take place within the family itself. This reality is often hidden from the public. This chapter outlines the developmental path described by the generative families interviewed for this study, which will be further amplified ...