Perpetuating the Family Business: 50 Lessons Learned from Long Lasting, Successful Families in Business

I'm an avid reader of family business books, and I recently re-read Perpetuating the Family Business by John Ward and found myself tabbing numerous pages that contained insightful and important ideas that just about every family business can put into practice. Ward begins by laying out his conceptual foundation for familes, which contain his "Four P's" - 1. Policies before the need; 2. sense of Purpose; 3. Process; and 4. Parenting. Understanding and practicing the four P's should provide families in business with a decent start in the right direction toward developing a sustainable and successful family and business. The heart of the book contains Ward's "50 Lessons" for family businesses, broken down into three sections: lessons for owner-manager businesses; lessons for sibling partnerships; and lessons for cousin collaborations. At the end of each section he briefly applies the lessons to the story of two media families: the Och-Sulzberger family (of the NY Times) and the Binghams (the Southern US media family) for illustrative purposes. Below I've set out a few of my favourite lessons from the book. Lesson 2: Irrevocable Retirement. Ward highlights the importance of family businesses establishing mandatory retirement policies for executives. As he states: "While a mandatory retirement date addresses the delicate issue of the leader letting go, it does much more than that. The value of a mandatory retirement policy is that it creates the opportunity for more changes in leadership in the later stages of the business." Family member executives in family businesses often have a hard time 'letting go' of the enterprise, creating all kinds of problems for the next generation of family (and non-family) executives who's professional and personal development is often retarded as a result. Also, mandatory retirement will force family executives to find a 'life beyond the business' - perhaps turning towards a leadership or mentorship role in the family or community - that will continue to provide them meaning in their lives. Lesson 4: Principle of Merit. Ward argues that families should put in place policies that focus on competence and earned privilege and discourage paternalism. Merit should impact many areas of family business decision making, including what roles family members should play in management of the business; determining compensation; selecting successors; who serves on the board; etc. Lesson 5: Attract Most Competent Family Members. As Ward observes, family businesses often fail to attract the best family members into the business because the most competent family members often have opportunities elsewhere. He states that failing to adopt the Principle of Merit (Lesson 4) will result in the business attracting the least competent family members while those who are the most competent search for opportunities outside the business where their competence will be recognized and rewarded. Lesson 10: Understated Wealth. O

By 'clear' I mean relatively easy to read, this is not a textbook. Dr. Ward says himself that it is the most personal book that he's ever written, and I would say that it is his best. Because it is insightful. One example: of the Five Insights and Four P's, one is 'Policies before the need'. This is something that I've been begging business families to do: establish a policy manual with rules for this and that occasion. Just because your family business is relatively small and simple today does not mean that you can delay. A problem with other books on the subject is that they are written with a certain kind of family business in mind. This one, however, mentions the first three stages of family business evolution, and lists the 50 lessons under one stage or the other. Most helpful! Appendix C: A Family Business Checklist made me stop and say "Hey, this question isn't for my business yet." but that only means that if the question and its answer is not appropriate for your business yet, it is still beneficial to start planning and educating. In other words, what is not needed by one generation is essential to the next. Families in business: listen to this wise man, communicate, and educate.

It is simply the best book about Family Businesses that I read. Besides that, it is one of the few books in this field that has a conceptual structure. It will be helpful to all people interested in the perpetuation of family businesses.

Well written and researched, "Perpetuating the Family Business" is a "must read" for anyone interested in passing their own business on to the next generation. John Ward is not only experienced, but insightful regarding the dynamics that make or break families and family businesses.

In a short book, John Ward offers many key findings & synthesized concepts (often surprising, even counter-intuitive) without wasting readers' time but with true-life examples enlivening his conclusions. His research & concisely presented insights match the multi-generational history of our multi-$B family holding company. This work should be on best sellers lists, not only because it is the "Built To Last" for private business, but also because it includes management principles that could be used in public companies seeking to endure. C.U.