This essay lays out an approach to educating family business owners about the governance and continuity of enterprises like theirs that builds on the authors’ experience as consultants to complex family enterprises for over 30 years.
Education about family enterprise governance is seen as an essential precondition to effective continuity and succession planning. Essentially, it provides awareness, language, direction, and hope—all key ingredients for planned generational change. We conceptualize two interrelated approaches to education: a deductive or “outside-in” approach through which concepts, models, and ideas are used to elevate the owners’ understanding of their family enterprises, and an inductive or “inside-out” approach through which owners are encouraged to experiment and reflect on their direct experience—i.e., how they are actually doing things—to extract a deeper understanding of their family enterprise and their approach to it. If well-orchestrated, these two types of learning reinforce each other.
Whether by setting up an independent board or a family council, developing a new set of policies for regulating the relationship of the family with the enterprise, new experience if followed by reflection, generates useful ideas that can then be tested through subsequent experience. We provide many examples of how education can facilitate planned change in family enterprises undergoing complex transitions. Education is viewed as an ongoing capacity-building process that ought to be designed strategically to continuously anticipate the needs of both the enterprise and the family..
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