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Last month, we discussed what retirement looks like for the founder: do I stay or do I go? Exploring the topic in further detail, we came to the conclusion that the founder can either stay in their existing role or they can shift to begin to help the family flourish across multiple generations. They don’t necessarily need to retire to never be heard from again.

But how does one choose between even those two when their entire career—their identity—is built around staying in their existing role? What does it mean to shift into helping the family flourish across multiple generations?

For this work, we look at the founder’s entrepreneurial spirit. There are myriad reasons they started a business, but one thing all founders have in common is they looked for new ways to solve old problems or created entirely new categories or built something from scratch. They have entrepreneurial spirit. 

Founders with a strong sense of entrepreneurship have five things in common:

  1. They are in tune with their passions. 
  2. They always question how it can be done better. 
  3. They are optimistic about all possibilities. 
  4. They take calculated risks. 
  5. They execute.

If we apply those five things to the founder helping the family flourish across multiple generations, you can begin to see how they might shift their thinking from “I’m the one who must do this work” to “I’m the one who must ensure my family is taken care of for multiple generations.”

Jay Hughes is a sixth-generation counselor-at-law, now retired, author, and co-author of multiple books and influential articles on family governance and wealth preservation. As part of his work around creating family business legacies, he has defined five areas to focus on:

  1. Human Capital
  2. Intellectual Capital
  3. Social Capital
  4. Financial Capital
  5. Spiritual Capital

To pursue the idea that the founder can shift from running the business to helping their family flourish across multiple generations, we must first focus on human capital. This includes the individual family members and the skills, talents, knowledge, dreams, aspirations, and history that each possesses. It also consists of the values, passions, and spirituality of each of the family members.

For many founders, the most obvious result in helping their family flourish across multiple generations is to pass the business down to the next generation. But what if their children aren’t interested in working in the business the founder built? Intimately knowing the family members’ dreams will help determine how to help the family flourish.

If the founder explores the dreams of their successor(s), they might find that their eldest child wants to be a veterinarian and their second child wants to be a photographer. Neither have any interest in going into the family business, even though that’s what’s been expected their entire lives. 

In that case, the founder uses their entrepreneurial spirit and questions how the family flourishing might be done differently. They are optimistic about all possibilities, and they take some calculated risks. Not unlike the work they’ve done to build the business, they shift their attention to leaving a legacy that is important to their family members—not just to the business they’ve built.

Recommended Reading

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