The Turkish family business face a deadly challenge at the turning point of the generation change. 70% of them will disappear, swallowed by the turbolent waters of the global business. To transfer to the next generation the material company: buildings, people and machinery, is not enough. We have to transfer the entrepreneurial dream that gave birth to it.
There is a legend from the ancient times about two terrible giants, Scilla and Cariddi, guarding the strait of Messina, swallowing the water in the passage from Tyrrhenian to Ionian Sea, to explain the whirlpools and the rough sea causing innumerable shipwrecks and so many losses of unfortunate sailors. In the modern time there is another passage which gives the shivers to the over-sixty year old owners and founders still at the helm of their companies but thinking to pass the baton. It is the generation change, the passage from father to son of the responsibility of the family business.
In this passage over 70% of the companies owned by one family are wrecked, swallowed by the turbulent waters of the global business. Nearly 75% of the companies in the world is family-owned – more than 95 percent in the United States – and family business accounts for 90 percent of global gross national expenditure. So the deterioration of the activities, or running out of business of the companies controlled by a family is a planetary emergency, a phenomenon of such proportions to create serious damages to the wealth of the world when we consider what it means in terms of the immense loss of ideas, resources and skilled people, with huge social and human consequences.
We can say that family business is the most important and at the same time the most vulnerable sector of the national economies all over the world. In Italy over 20.000 family companies die each year. In Turkey the total number of small/medium family firms is in continuous growth but they have a very short life. 40 % of newly established companies stop their activities in the first five years, and 66 % of the companies which are more than five years change the ownership or postpone the generation change. Worldwide, the average live span is below 15 years and only giant corporations can reach the age of 40 or 50 years. Centenarian firms are a planetary rarity.
Families have an aspiration to longevity and to continue to own their companies for many generations to come, but in Turkey no more than 18 family-owned companies have blown out 100 candles for their birthday. And only one, Haci Bekir Turkish Delight, the oldest family firm, founded in 1777, is still hale and hearty.
The survival strategy for many has been to grow, believing that a larger turnover and an expansion of their operations would prolong their life. Others, while the global crisis still perdures and the awareness of globalization is raising, have thought of becoming more international and started looking abroad. This strategy is expected to be trending upward in the next years.
The Entrepreneurial Dream
Whatever is visible of a company is born from a dream: all that we see and touch of it is the materialization of the entrepreneurial dream of the founder. Beyond the most superficial and coarse vision of a company, beyond its factories and offices, sheds and machinery, beyond the army of employees, staff and managers and throughout the organs of that enterprise, you can still hear resonate the stroke of diapason that engendered them, a chord that still binds all its cells and makes them vibrate in unison.
Professors and scholars, business consultants and specialized research institutes, jurists and sociologists, professional accountants and psychologists, study since long the phenomenon of the generation change from any possible point of view, and still the invisible side, the raison d’etre of the enterprise, where the vital roots of its project lie, is beyond their reach.
Success is always a revolution
Therefore, for a successful generation change to transfer the material company with its buildings, people and machinery, is not enough. What has to be transferred to the next generation, above all, is the entrepreneurial dream that gave birth to it. The love for the enterprise, and unlimited commitment to all and each of the people that are part of it. The young people who have to take on their shoulders the burden of leading the family company have to be aware that one cannot just inherit the family business but has to reinvent it. The young corporate leader cannot just carry out the original project but has to enhance and enlarge the entrepreneurial dream of the founder. To do that he has to become himself a visionary, a pragmatic dreamer. He knows that success is always a revolution. For this he must be a rebel, have a subversive mind, be an independent thinker. It means to develop a sixth sense: intuition, and a seventh sense: dreaming. Early in his life he has to realize that organizations are living beings, that there is a lymph, a precious substance that runs in their veins and arteries. His real job is to nourish and enrich it. This will ensure prosperity to his organization and long life to his family fortune.
The King is the land and the Land is the King
An organizational pyramid is inextricably bound to its leader’s breath. A golden thread binds his image and personal destiny to that of his organization and his people, just as it did for the ancient sovereigns. The King is the land and the land is the King. There is a iron law which relentlessly applies throughout the centuries, from the ancient civilizations to the modern business empires. When the king is ill, the land is ill.
Hence, when we try to explain why so many enterprises die young, or disappear after successful years of activity, and especially at the time of a generation change, we have to remind that the destiny of a corporation, of a family fortune, all that an organization has conquered in years and years of efforts and intelligent management is linked to its leader’s breath. One man makes the difference.
Organization disappears when the dream dies up, when they become the projection of incomplete leaders. Even entire nations and civilizations live or die, get poor or prosper, expand or fall in slavery depending on the integrity of their leader, on flawlessness of their founder-creator.
The Great Divide
There is a barrier that divides two human species: the corporate leaders and entrepreneurs, on one side, and the clerical mass, the large sea of the employees, on the other. A great divide, a watershed. It is called Fear. An entrepreneur is an individual that somehow, somewhere in his life, has decided to face fear and get rid of it, as much as he could. Fear is a ghost. Almost the totality of our fears are imaginary. To have a healthy, real fear is almost impossible. When a man realizes that though imaginary, fear leads mankind’s life and he makes the decision to nevermore be lead by it, he is crossing the boundary between leadership and sheepship.
An entrepreneur is essentially a rebel capable to stake his resources and reputation to modify the status quo, to change the existing reality, to rock the boat breaking schemes and pre-existing balances to create new ones more profitable and advantageous to him. To put together other men, take responsibility for them, to infect them with his dream, could be called entrepreneurial characteristics, in reality they are quality of the Being, significant psychological features that allow a man to reach the highest stair-steps of the human responsibility and be a leader.
Behind the apparent search for a profit and the desire to make money out of it, more deeply than he himself can know, an entrepreneur is at the service of an evolutionary project. He knows that looking after his people, serving them and loving them is the task of a leader. Their improvement is his success. Each individual, at the end of a day work, must come out of the office or the factory improved, and even the most distant cell in his organisation has to be tended in order to evolve and progress more rapidly. His life is dedicated, his commitment is total. His human and financial destiny is bound to his organization and his people’s destiny. Like a captain of the ancient vessels he has to bring his ship back to the harbour or sink with it.
The escape from responsibility
“Daddy I would like to be a doctor…. A cello concert performer… to join a U.N. Development Program to Swaziland…” Here is the dilemma that many father-entrepreneurs are faced by, at a crucial age of their heir, when the designate future leader of the family business comes up with one of such requests. A father feels torn between the desire to let his child to follow his/her true aspiration, and the demand of his business urging a son or a daughter to be the continuator of the family activities, the fosterer of his entrepreneurial dream.
What should he do? Let him go or push him to stay? Is there a criterion to follow, a standard to adopt at this juncture? Yes there is a crucial question that the father-entrepreneur should pose to himself and be able to answer to: is it a real passion, a deep urge which draws him or her towards a profession, or music or a philanthropic cause? Is he or she uniquely born for it? In such a case, let the child follow his/her natural bent, what he or she really loves. But if it is a strategy to escape the weight of duties towards the family and the company, then the solution is to help to exercise the inner muscles of responsibility.
There is an illustrious family business, one thousand year old, which had to face this kind of problem a number of times in its history: The Windsor Family. It is very famous the story of Prince Edward who abdicated the throne of England to marry Ms Wallace Simpson. What has been defined the most romantic love-story of the last century is in reality a sad escape from responsibility. As future King of England, and therefore head of the Anglican Church, he not only chose a divorced lady, and an American citizen, but one of a Roman Catholic faith. No other woman on earth could have put him on a safer side from taking that responsibility of being a King of England.
The FIAT Case
Sometimes the escape from responsibility takes more dramatic expressions.
The generation change in FIAT, the Agnelli family industrial empire, in very recent years has shown with tragic evidence the effects of unreadiness of the heirs to bear the weight of such a patrimony of ideas, means and people.
Giovannino, the son of Umberto Agnelli and designate man to lead the Fiat in the new century, chose the way of the illness and was struck down at 33 year old from the rarest and most incurable form of cancer.
For Edoardo, an unhappy and frail being, the throne of the most powerful Italian dynasty was overwhelming and chose the way of the suicide at 46.
Lapo, easy rider, temporarily appointed as Fiat marketing manager, but in reality a spoiled scion of the family, chose the drogue and a dissipated life to make his succession impossible. Five years ago at 28 year old was brought to a hospital in Turin, between life and death, for overdose of cocaine ingested in excess during a party with viados and trans.
Be a King and the Kingdom will come
If you have built in you, through hard work on yourself and knowledge of thoughts and emotions, the qualities of generosity, vision and sense of greatness of a king, the kingdom will come. But nothing can be more disastrous than to receive a kingdom before you have achieved the capacity to bear it. Most likely nobody unveiled to this unfortunate youth the beauty of commitment, the other side of responsibility. Nobody ever told them that there is no happiness without a parallel growth in responsibility, and certainly no school, no mentor, has ever thaught them that Dream is the most real thing and that business is the ‘Art of Dreaming’.