Customer Reviews

Generation to Generation: Life Cycles of the Family Business

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I think this is one of the best books available on family businesses! I found it insightful and informative. I think anyone interested in the subject should read this book. I strongly disagree with the review that describes this book as "too theoretical." I found it immensly practical.

The authors took ten years studying hundreds of family firms to write this very deep and understanding description of how a family business develops trhu time. A must for anyone interested in this fascinating subject. Antonio C. Vidigal

Most businesses in the world today are owned by families, but only a small percentage of these companies will survive and grow into major corporations. The unique challenges posed by family ownership can undermine even the best-performing small business, as issues of control and succession permeate the generations. In Generation to Generation, the authors apply the simple premise that managing a family-owned business to a large extent means managing the family itself. To that end, they provide a rich compendium of research and strategic suggestions for those charged with making a family business work, including the consultants who guide them. We from getAbstract highly recommend this book for these applicable measures and methods, which will help the performance of both business and family.

The authors effectively present a theoretical, as well as practical model of family business dynamics, incorporating the complexities of development over time. This book is a must-read to gain a deep understanding of families in business from the key perspectives of familiy, business, and ownership. Their use of case examples effectively illustrate the practical application and relevance of theory. To sum it up, it's steak AND sizzle!

"Generation to Generation", published by Harvard Business School Press, is an attempt to model how family businesses work in essence. The authors' research include interesting vignettes and 'lessons-learned' from a variety of families; how they achieved their goals, how they resolved conflicts between family members etc. Since the topic of family business in academics is fairly new, this book can be considered as one of the best in its field.

Important topics (such as succession, development stages and inter & intragenerational issues) are covered in detail to enlighten the reader. Contrasting viewpoints are also included to make the reader think for his or herself.

In general, the book is fairly easy to read since it explains the modeling theory with examples from numerous enterprises.
I strongly recommend it all who are destined to work in the complex system called family business.

A very well methodical approach on issues relating to governance of a family business which invariably covers multi-dimensional issues of emotions, tradition, moving forward and competing interests. Short of meeting John Davis himself, this is a good guide for a 'family' business. John Davis with his experience over more than 30 years consulting family businesses world wide crystalises some hard issues family enterprise deals with. It covers Dimensional development model of Ownership, Family and Business as well as the 4 Classic Family Business Types right through to Managing the developing a family business. It can be a good guide not only to family businesses but also those who work closely with or for family businesses such as consultants and key employees.

This is a mandatory book for all the people involved in the management of family businesses. I highly recommend it!!!

Book Review: Generation to Generation

Generation to Generation: Life Cycles of the Family Business is, in my opinion, a major contribution to the study and understanding of the complex nature of this most basic of human occupations - the family business.

As a business anthropologist, I found the life-cycle model applied to the study of the family business eye opening from both an academic and practical perspective.

There is a saying among family business owners and consultants that expresses the folk wisdom of about the family business as an institution and enterprise. It goes something like this , "The first generation creates, the second builds, and the third consumes the family business."

A business is an institution and organization created to perform the function of making money, i.e. producing an income, for the owner(s) by producing a good or service to meet a public need. The business can be as simple as the one person/owner/operator start-up shoe shine stand at the airport to the $7.5 billion a year 5th generation conglomerate, S.C. Johnson & Sons.

Although each is uniquely different, yet each will face, now face or has faced, the same challenges and crisis to its survival outlined in this model.

Gersick, Davis, Hampton and Lansberg develop a life cycle model for the family business that explains in clear, objective and sound social science terms why there is so much truth to this folk wisdom. The authors define the three key domains in which the family business exists and in which it must survive. Each of these domains has its own dynamic and its own life cycle. Each responds to different and sometimes conflicting demands from its environment.

These domains are the business enterprise, the ownership, and the family. In order to understand and effectively manage a family business, the founder and his/her successors must understand how these three domains are operating at any particular time to create opportunities and threats for the business.

The life cycle model draws upon the principles of business ownership models as established in corporate law, the dynamic theory of organizational life cycles and management structures, and the theories of human and family development found in psychology, sociology and anthropology. This comprehensive, integrated model focuses on the business enterprise as a institution and is explained using examples from real family businesses and corporations. It addresses the basic survival problem all family businesses face -- succession. But more than that the authors clearly outline the issues and alternatives at each phase of the life-cycle for the enterprise and the key actors in the family and the enterprise.

As a consultant/business coach to family businesses, I find the insights here validating of the observations I have made and experienced in my practice with clients. I also find it reassuring to see how the holistic approach, which takes all three domains into account, can produce an outcome that will satisfy the personal and business objectives of all the interests involved -- the business, the owners and the family.

I strongly recommend this book to anyone who owns, operates, is part of, or interested in family business.

Great book if you are looking for some theoretical work on family businesses. It addresses the family aspect (how the evolution of the business impacts the family and vice-versa), the business aspect (start up stage, maturity stage, etc.)and the ownership (one owner, several generations working together, extended family involvement). Most importantly it addresses the interaction between the different areas of the family owned-business.

This book is the most authoritative work on family firms.Part I of the book applies the three-circle model to the characterization of different predictable development stages of family firms in different dimensions. For instance, the family dimension consists of four development stages including young business family, entering the business, working together, and passing the baton.. The ownership dimension consists of three development stages including controlling ownership, sibling partnership, and cousin consortium. Besides, the business dimension covers three development stages, ranging from start-up, expansion/formalization, to maturity.

Part II covers four cases of classic family business types and each family business type has unique organizational characteristics and different mounting challenges. The founder-run family firm has a paucity of talents and the competencies of the founder can influence whether family firms can be successful or not. The organizational structure is in a hub and spokes format because the family firm founder tends to involve himself with every business aspect. In the growing and evolving family business type, there are more family members who are connected to the family firm and common challenges in this stage of family firm development include consolidation of ownership control in the sibling generation, ownership distribution planning for family members in the next generation, business and organizational restructuring to initiate and sustain growth. The complex family firm is a multigenerational and cousin-owned family firm. According to Gersick, Davis, Hampton, and Lansberg, not more than 5% of family firms in the US reach this development stage and comparing with the founder-run and the growing and evolving family business types, family firm in this development stage has considerable complexity in terms of ownership, family, and business. The key to effective management of family shareholder issues is to establish a well-designed board of directors and family council. Since emotion residue of cousin-owned family firm is died down, there are more and more internal struggles over recognition, power, and money among family members. As the cousin-run family firm has reached its maturity in business development, it has to be more responsive, innovative, and disciplined in leadership and business development. In the fourth classic business type of family firms, succession becomes an important journey and the tradition of primogeniture and equal distribution of assets among family members is still a common succession form. The formulation of a shared dream among family members can provide key foundation for the survival and growth of family firms after post-succession.

Part III of the book covers two key topics pertinent to best practices of family firms and family firm consultation. Gersick, Davis, Hampton, and Lansberg suggest that a well-designed board of directors, shareholders meeting and family council become effective information-sharing routines and governance structures when more and more family members are connected to ownership and business development of the firm. Skilled consultants in general management, financial planning, law, insurance, estate planning, and family therapy can be hired when family firm owners are need of professional advice. The last chapter also provides basic principles for family firm consultants to undertake consulting work with family firms.

This book helps readers to have a full understanding of the salient features of family firms. Like other non-family firms, family firms have heterogeneous cultural types, ownership forms, governance structures, business development strategies in different development stages. The three-circle development model is a very useful analytic tool to shield light on why some family firms can survive and grow whereas others cannot last for years. This book is highly recommended to family entrepreneurs who intend to sail along their family businesses from generation to generation and to business executives from non-family firms and professional consultants who have to undertake business with family firms.