Tuesday, March 28, 2017
In order to survive and thrive beyond the first generation entrepreneur, a family business needs an internal force of innovation and creativity among employees and family leaders.
Innovation in a family business means finding the next competitive advantage over the current way of operating, but must also be compatible with the family’s values, culture, and vision. Many important innovations consist of incremental improvements to products and processes. Fostering this internal force requires a management and leadership mold that empowers all in the business to internalize an “owner’s” mindset and to take initiative.
Creativity is a conscious choice to challenge the status quo. Creative people are value investors in the world of ideas. Value is generated by evaluating a creative idea, calculating the risk-reward, and driving forward.
1. Set the culture. Establish a culture that promotes authenticity, commitment to people, commitment to the business, and continuous effort.
2. Nurture a nudge. A nudge is an action that attracts peoples attention and urges then to alter their behavior in a positive way, yet it is not done in a heavy handed way. This nudge may be as simple as urging the sharing of an idea or as complex as developing and implementing a change process.
3. Teach the family and employees the business. Focus not only on the technical skills each individual needs to perform, but educate people regarding how the business makes money, how the business attracts and retains clients or customers, and other big-picture issues that impact the business.
4. Keep the momentum going. Building the internal force of innovative and creative family leaders and employees, and the culture to keep it going, takes hard work. To keep the momentum going, ensure that the organization focuses on competitive compensation, keeping morale up, and consistent, effective communication.
By tapping into the internal force of innovative and creative family leaders and employees, a family business can outthink and outperform the competition, increase profits, and move successfully into the future.