Home' Trinidad and Tobago Guardian : February 1st 2018 Contents entreprenomics BG13
Thursday, February 1, 2018
e live in very
The economy is entering a pe-
riod of higher unemployment and
rising cost of living.
We are witnessing increasing
crime, mostly among the young
males and falling participation for
them in education. The situation
may not get better.
Families are in trouble, what can
the social unit leaders do to cope
Is it time for parents to have a
chat with their children about a
new endeavour to assist with deal-
ing with the new realities?
Many families do not practice
good governance. You might think
this is for companies to do so they
can be well managed.
Every family needs rules and
policies to become a higher per-
forming unit. One of the guiding
principles is for families to have a
vision. A vision is a desired future
state and families should clearly
write what their future as a unit
ought to be. Of course, the family
life cycle means new ones enter
by marriage, others leave by death
or migration and as usual people
change as they mature.
Every individual is supposed to
have a vision which is aligned with
their family. What do you want to
be when you grow up?
This statement captures a sim-
ple way to bring out a family mem-
A parent should introduce more
options that the doctor and lawyer
careers. Maybe the option of being
an entrepreneur so Johnny can
change the world and be happy
in business and have unlimited
Families should also have a mis-
A mission is about today while
a vision is about tomorrow. What
is the family trying to achieve in a
broad way today?
An example could be “to always
thrive to enhance our family’s
performance and others in our ex-
tended family (human race) while
improving our natural environ-
The implication for this is a fam-
ily that is always looking for ways
to improve its performance and
its networks. This is not about a
selfish family, but one that un-
derstand that a family must be
involved in the larger community.
It’s also about protecting the en-
vironment, recycling and dealing
with climate change.
One of the basic tools of good
governance is hardly practiced
by families, especially under-per-
forming ones, is family meetings.
Think about the last time your
family had a meeting. This is
when the family table becomes the
Meetings in business are held
frequently and it is a simple way to
communicate and bring the collec-
tive intelligence around the table.
It’s about solving problems and
going after opportunities. Families
that meet infrequently fail to come
up with a solution for Johnny’s
poor academic performance or to
guide Melissa’s career into a more
I know many executives who
will complete their firm’s business
plan, but not have one for their
family. What a tragedy!
A family needs a yearly road
map that tackles many dimen-
sions: financial, social, per-
sonal, education and community
spheres. Under the area of finan-
cial, your family can decide that
it needs more income to diversify
and involve the kids in some extra
curricula activities to compliment
their studies. You might decide to
start a new business.
The conversation should begin
with parents and they need to call
a family meeting with the children
making the case for starting a busi-
Family businesses are much
more common that we think.
The Family Firm Institute in
Boston US, estimates that between
40-80 per cent of all firms globally
are family owned and operated.
Think SM Jaleel, Ford Motor, and
many of our small- and medi-
um-sized enterprises (SME). There
is something ubiquitous about the
family firm, as it offers many ad-
vantages. But don’t fool yourself
into thinking it comes without is-
A family enterprise has many
advantages over non-family busi-
nesses. They tend to have a lower
cost of capital. This means they
can in theory make more money
as the bar is set lower.
Why this is so?
For one, the family tends to have
a long view on investment, they
think not five years or even 10,
they think next generation.
Additionally, the families invest
more in bad times which prepares
them for the good times. But, most
importantly, families are more en-
trepreneurial than firms run by
managers who have no financial
stake. This makes a big difference
in firm performance.
Families firms also tend to bene-
fit from the free labour at the early
stages and this keeps costs low.
The younger ones also get indoc-
trinated in business.
The best business education
happens on the streets not in the
classrooms. Entrepreneurs exper-
iment with innovative ways and
see how the world reacts, adjust-
ing their business model as they
go along. In the classroom they
teach about testing hypothesis,
which can be a bit detached from
Ever wonder why some busi-
ness families can accumulate large
amounts of wealth and happiness.
It comes down to how they man-
age conflict and governance. Fam-
ilies that are harmonious know
how to deal with conflict.
In effect, the entrepreneurial
spirit of the family will not be af-
fected. Families can continue with
decision making at a much faster
pace than their counter parts.
Speed is a significant competitive
advantage in a world where things
change in a blink.
The famous Gucci family has
built-up a billion-dollar family
business which is a recognisable
brand in fashion goods.
When the family business
started, the story goes, father
Guccio Gucci would ask his kids
at the dinner table which would
they prefer, ice cream for dessert
or save their dessert money to buy
another sewing machine? What he
was teaching his kids is thinking
about sacrifice and the long term.
This is an important piece of busi-
ness education when starting a
Unfortunately, as a family ma-
tures, problems arise. Structures
need to put in place to cope with
conflict. The Gucci family business
ended up in feuds that resulted in
part of it being sold to an outside
Some of the tools that families
need to put in place, is improving
communications by having regu-
lar meetings, having an advisory
board, setting up a family council
which would further the educa-
tion of managing a family enter-
As the next generation enters
the business, the family needs to
start the process all over again,
teaching members on how the
business is run and how it makes
decisions. The importance of the
enterprise to the family and how
conflict is resolved.
Finally, a sure way to have
multiple streams of income is to
start a business but even better, a
business that involves the family,
provides not just an income but
an education about managing an
enterprise and offering another al-
ternative to the traditional career
options children are offered.
Your family might also need a
Sajjad Hamid is an SME and family
business adviser. He can be contacted
via email: firstname.lastname@example.org
or website: entrepreneurtnt.com
Join him on LinkedIn: www.linkedin.
Talking to your
The best business education happens on the streets not in the classrooms. Entrepreneurs experiment
with innovative ways and see how the world reacts, adjusting their business model as they go along.
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