Five Rules for Bequeathing Entrepreneurship

The ability to foster entrepreneurial renewal with the introduction of new products, processes, and markets is essential for the success and survival of firms across time. The transmission of entrepreneurship to younger generations must thus be a priority in family firms. The most important role in this respect is played by the controlling family. It can encourage or discourage the pursuit of new businesses by its younger members in various ways. The study of dozens of cases in the international research project called STEP, which Bocconi founded through the AIdAF-Alberto Falck Chair, highlights at least five key factors.
First of all, the education to business and life. Innovative entrepreneurs are characterized by articulated personalities and skills. These personal qualities can only develop through time, by being exposed to multifaceted life experiences, as well as to business experience.
Contrary to what occurred in the past, entrepreneurial families now understand that on-the-job training is only one among many elements which constitute the background of a successful entrepreneur. Consequently, it's essential that younger family members take advantage of study and job opportunities which enrich the human qualities that are even more important than professional qualities. Secondly, the respect of rules and responsibilities. Successful families communicate with great clarity the rules of behavior they expect from their members. When the young start working in the family company they have a set of shared rules to rely on, and this builds trust and open communication that are essential for the development of new business ventures. Thirdly, the respect for differences among members. Successful entrepreneurial dynasties understand they shall not treat each member the same way. Differences in terms of abilities and inclinations must be understood and respected. It's crucial to understand the abilities that were critical in the initial phases of the life cycle of a family firm are not necessarily essential at later states. Fourthly, the presence of models to be followed. Our research study shows tha more than half of innovative entrepreneurs had the possibility of following up closely the behavior of the oldest family member. This makes one learn and apply the key value of integrity, conscientiousness, openness to new ideas, of receiving and sharing, all essential to develop new entrepreneurial initiative.
Fifthly, the practice of entrepreneurial abilities. Successful families offer their members the possibility of developing their skills at each stage of their lives. This happens, for instance, through the possibility of putting ideas into practice within the family business. But in many other cases these capabilities are simply developed by granting sufficient autonomy and responsibility to younger family members.Summing up, business families have the responsibility to transmit the entrepreneurial spirit to the younger generation. It is by their attitude and educational role that they can improve (or not) the skills and aspirations of entrepreneurial development in their juniors.