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.