In this week’s chapter The Five Insights and The Four P’s, we read about the five insights that all family businesses have or should have some variation of and the four P’s of small businesses. These 9 things that this chapter covers are lessons learned by small businesses on the art of successful succession and survival. If a business is lucky and educated enough they will recognize and adopt these lessons early into their framework and follow them throughout their company’s lifetime. According to John L Ward these nine things are to be looked at as the foundation and framework for a lasting family business.
First we will talk look at the five insights, the first insight is “we respect the challenge”, which …show more content…
One way to do this is to create a “family continuity triangle” which consists of 3 parts: business strategy planning, estate and personal financing, and leadership and ownership succession planning. In completing this triangle you see that each part is to be interdependent however still works together, for example the business strategy plan covers “where is this company going” for both the long and short term, however it doesn’t simply stop at once Bob retires Joe will take over, that is left to the succession and leadership part, etc. Successful businesses they can see and have all parts covered, planning cannot take …show more content…
Family businesses recognize the predictable conflicts or problems that can arise and when they do so they should instill policies on how to deal with those situations early rather than waiting for them to occur. The great thing about this is that by creating these policies before occurrences arise they can do so without feelings or emotions getting in the way, also when these policies are created and understood within the family there are no surprises. The second of the four P’s is “Sense of Purpose” families need to completely understand why they are giving up so much, working so hard, etc. In other words they need to know the overall purpose of what makes continuing this business worth it in the end. Purpose is tricky because a sudden loss of purpose can lead to the end of the business or an overall change in the owner’s perception of the business as a whole. However an inspiring or compelling purpose can band the family together and make them feel as though they are a part of something bigger than themselves but, most importantly carry them into the future generations. The third of the four P’s is “Process”, no family or business can ever create enough policies to cover every problem that could arise, however they can create processes for how to deal with the problems as