“Family business” has different meanings to different people. Based on my experience, when asked in one word what does family business mean to an individual, the most common answers are: small, conflict and legacy (figure 1). In total, more than half of the responses received over time have a negative connotation, i.e. complicated, conflict, private, entitlement, etc. “Family business” also implies a singular business unit, like a store, office or factory.
“Family entrepreneurship” or “family enterprise” is more indicative of a practice within a family or a portfolio of businesses or initiatives that a family may be involved in. This is a more holistic approach to understanding the many ways in which a family and business drive entrepreneurial activity and behavior (figure 2).
The unique characteristics of “family entrepreneurship” would be:
- Open communication and effective forums for incorporating varied perspectives
- A diverse portfolio of social, political and community activities and functional business units.
- Leveraged and extended networks
- Thoughtful consideration and action towards leadership and ownership succession
- A grasp of legacy balanced with an acceptance of change and disruption
It was once believed that one good idea could serve a business for three generations. Today, it is more likely that each generation needs to forward (at least) three innovations. Family businesses are a driving force in the world economy and this will continue to be so. Moving beyond the notion of “family business” towards “family entrepreneurship” allows for consideration of the many aspects that make these families and businesses so dynamic.