Generations

I am a fan of “old sayings”. One “old saying” that you will hear when discussing longer lasting family business operations is the one about generations. The old saying goes something like this. The first generation ‘starts it”, the second generation “grows it”, the third generation “lives off of it” and the fourth generation “farts it away”. Not every family business fits into this type of situation, but if you pay attention to family operations of any size, you will see this plays out often. The reason I bring this up is because every member involved in a family operation, needs to recognize if they are the first, second, third or the fourth generation. This is important because it makes a difference in the way you make decisions. Since the first generation is usually starting with nothing, they can (and usually do), make double or nothing bets. If you don’t have much, you don’t lose much. The odds are a lot different if you are third generation. If the third generation makes a double or nothing bet they have a good chance of “farting it” away. Also, if you are married it is very important both spouses need to be on the same page as to what generation they are in. A husband who thinks he is the first generation, with a wife who thinks he is the third generation, will have a very hard time making their marriage work.

It is very important for all members of a family operation to understand the generations and where each member stands. If one member doesn’t like the generation they are in, they need to communicate to the other members that they do not want to be part of the family business. This is one of the reasons that family operations do not last. If you have five members of a family operations who are in the third generation, and two want to continue to “grow it” and the other three want to “live off of it”, it will be hard to keep it going.

“Generations” just one of things business people need to keep in mind on their way to success or failure.

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