I’ve been working on two books about fourth-generation companies. One manufactures machinery; the other is in transportation. Although different, they share a rare distinction: The Small Business Administration reports 90 percent of U.S. businesses are family-owned, but only 30 percent reach the second generation. Just 15 percent survive to the third generation, making fourth-generation enterprises virtually unknown.
What’s their multi-generational secret? Without trying to oversimplify how these two companies managed to successfully pass the baton, they do share key characteristics that helped to shape the culture of their organizations, each of which conveniently starts with an “I”:
Initiative. The patriarchs understood the importance and value of hard work; in fact, they epitomized the so-called “American work ethic.” They were willing to invest the sweat equity to achieve their goals and dreams, having no sense of entitlement or being “owed” anything.
Ingenuity. In pioneering businesses in the 1920s and ‘30s, there were no manuals to follow, no how-to books to consult and apply. Each new day represented a fresh challenge, filled with new horizons to explore and new problems to solve. They readily took risks, recognizing failure is often the best teacher.
Innovation. For these industrial trailblazers, hearing “it can’t be done” served to provide incentive, not discouragement. They realized the adage, “If at first you don’t succeed, try, try again,” was not simple rhetoric but a philosophy to follow in the pursuit of success.
Integrity. Those traits, however, could go for naught without honesty and forthrightness. These early leaders strived for excellence, put customers first, and were known as men of their word. Their skills attracted business, but their integrity retained it.
They typified the biblical admonition, “Do you see a man skilled in his work? He will serve before kings; he will not serve before obscure men” (Proverbs 22:29).