From “Family Business” to “Family Enterprise”: Reflections on a Changing Field
Do you remember when we used to watch TVs in square aspect ratio, with the grainy, pixelated picture? Now we have wide angle lenses, and high definition in several forms - phones, tablets/iPads, and TVs - our memories of those big, square screens hulking in the corner of our living rooms are as grainy as the images they projected. Teaching families and advisors about the family enterprise is like watching people upgrade to high-definition TVs, only to realize that what they used to see was only a fraction of what was in front of them. Sure, the visible scene was part of the story, but so much more was going on just out of view, and even more was hidden in plain sight by that unfocused, fuzzy picture.
From “Family Business” to “Family Enterprise”
When we started helping families and advisors think about the“family enterprise” ecosystem (rather than the narrower focus of the family business), it offered a fresh perspective on the field as a whole. Shifting to a Family Enterprise view changes how we understand and talk about families with operating business(es) and families of wealth more broadly; or, in other words, it has upgraded our picture quality and widened our lens. To expand the technology comparison, thinking of (and understanding) the “family enterprise” takes us from a simplistic, out-of-focus picture, into a sharp, expansive, high definition one. The result: a paradigm shift.
At first, the process was slow. It was literally one family and one advisor at a time. When I started the Family Enterprise Advisor (FEA) program in 2007, during my time at the Business Families Centre at UBC’s Sauder School of Business, my primary goal was to help shift this perspective, which I hoped would spark a cascading transformation throughout the field. In our efforts, we brought concepts and tools to broad audiences, and in the process began to develop practical new models that changed the way we understand the space. The Family Enterprise Model (FEM) was, for example, a foundational tool that helped us visualize and concretely understand the varied components that comprise the Family Enterprise. Working with models like the FEM, we were honing our abilities to demonstrate just how much the picture quality improves when we visualize the family enterprise rather than the “family business.”
In the early years, discussions around casting off the lens of the “family business” in lieu of the Family Enterprise perspective were also often centralized in academic research, and had little bearing on the practical realities for families or their advisors. Those of us that walked those academic hallways and the offices of enterprising families or the major advisory firms serving families of wealth, were small voices in a field that had long been guided by the familiar refrain of “family business.” In a sea of business education that frequently overlooked families as the locus of business leadership altogether, the importance of the Family Enterprise was often drowned out by the “family business,” other research, and practice priorities. As a result, a pivotal component of this story has been a process of weaving together the perspectives embedded in these various silos, and finding the centralizing features for families, professional advisors, academics, executive educators, and consultants.
A Simple & Transformative Paradigm Shift
Over the last fifteen plus years of talking about family enterprises, the lens has often substantially shifted the ways that families see themselves beyond their businesses. Each time we begin to change the frame, we see how much clearer the picture becomes for everyone in the room. It has empowered families to: change the focus of their attention; think differently about leadership; and ask themselves critical questions about what they want their future to look like with respect to their assets and their families. Teaching about the family enterprise has also transformed the ways that advisor’s understand their roles with their family clients and how they think about their work. This shift is practical, widely applicable, and has endurance.
Equally, advisors and families find the perspectives helpful to their work and their relationships. Recognizing, for example, the simple fact that business families own, on average, 3.4 operating businesses or that 89.4% of families have more than one business, changes our understanding of the relationship between “family” and “business” altogether (Zellweger et al., 2010). When I’m working with families, I see how their shift to the “family enterprise” helps them better understand themselves, their assets, their relationships, and their choices. With advisors, I see the way they begin to apply their expert industry knowledge - not to provide narrowly-conceived or simply-executed solutions - but to envision how their perspectives can guide families to make decisions that anticipate the future and endure through transformation and change.
Reflecting on how much has evolved in the family enterprise realm over the last fifteen years makes me all the more excited for where we go next, and how it will influence the greater success and satisfaction of enterprising families in the coming years. It is immensely rewarding to have a hand in shifting to a more nuanced and textured perspective in the field, as our notion of “family business” has given way to the more expansive language of enterprising families. Already, we’re beginning to see more mainstream shifts in how people think and talk about enterprising families and their diverse assets. I can only predict that as this continues into the future, families will be empowered to become even stronger players on the global economic stage.
Judi Cunningham is the founder of the Family Enterprise Advisor (FEA) accreditation program - which is now run by the Family Enterprise Exchange (FEX) - Canada’s key education program for advisors who serve enterprising families. She remains a faculty member of the FEA program, while also continuing to innovate family enterprise education in her work with the Trella Advisory Group.