According to Cision’s PR Newswire, family-owned businesses employ 60% of the U.S. workforce and create 78% of all new jobs. Further, the same 2018 study shows that 64% of the gross domestic product (GDP) is generated by family-owned businesses. Clearly, these businesses are vital to our national economy. However, the same study found that only 30% of these businesses will survive the transition from first- to second-generation ownership, only 12% will survive the transition from second- to third-generation, and only 13% of these businesses will remain family-owned for over 60 years.
Given the long-range and formidable statistical challenges family-owned businesses will face, understanding how to keep a family business thriving is a hot topic. A recent Harvard Business Review article agrees with the economic significance of these companies and presents the results of recent research to suggest six characteristics of healthy family businesses. This study expands the efforts of 2015 research by focusing on a single element of successful family businesses, namely, “family gravity.”
Family gravity is comprised of a value system, vision for the future, involvement, cohesion and interaction, family governance, and leadership principles and roles. The authors of this article maintain that despite the disappointing long-term statistics for success, family businesses that master these key dimensions of family gravity are able to not only survive, but also to flourish. Read the full article HERE