How psychodynamics can drive better decision making in family businesses

A changing set of realities, norms and values are underway in the face of an accelerating climate crisis. Within the family wealth space, the next-generation are particularly attuned to these changes and placing demands on family business leaders to act. A new family governance method which targets a family’s collective unconscious could be the key to successful intergenerational transition.
decision making in family businesses
Ownership Updated on October 21, 2022

As the climate crisis accelerates, we see a changing set of realities, norms, and values emerging – also within the family wealth space. The next-generation is particularly attuned to these changes and placing increasing demands on family business leaders to act.

Irrespective of these mounting pressures, the leadership transition is often a challenging time in the family business journey –  with only 13% making it to the third generation. Among the factors which are critical to their long-term survival is the ability to develop a distinctive and robust entrepreneurial orientation (EO) within each generation – defined as the ability to reinvent the business with each generation and seize new opportunities inside and outside the family setup.

By bringing in family governance specialists, family businesses can identify the emotional ownership barriers that deter the next generation from continuing the legacy. Emotional ownership refers to a range of factors that affect whether the next generation will join the family business – these being a duty to the family, desire for leadership, and the affective identity factor. The duty to family relates to whether the desire to continue the family business is intrinsic or extrinsic. Some members of the next generation may hold a genuine desire to be involved, whereas others might feel pressure from family members to be involved and therefore be driven more by the fear of disappointment.

About the Authors

Julien Lescs

Julien Lescs

Pyschodynamics & Impact Investing

Julien is co-founder of Kimpa, a family office dedicated to impact investing. Grandson of an agricultural family business that was destroyed in a fratricidal war, Julien has become a specialist in psychodynamics related to family business governance.

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