The Founder’s or Family Trap

Stuart Farleigh – Managing Consultant at The Family Business Unit

“Clogs-to-clogs in 3 generations”. Unfortunately 80% of privately held or family businesses are victim to this. Why?

trapThe “Founder’s or family trap” as coined by Dr. Ichak Adizes PHD is the inability to separate management from ownership. To put it another way, to move from an “absolute monarchy” to a “constitutional monarchy” – when a founder dies, the company may also die.

The founder is usually an entrepreneur – for a company to grow to the next stage it needs to implement effective systems, budgets, policies and structure these are often outside the range of skills of an entrepreneurial founder.Dr Adizes has compiled a chart of problems normal at this stage of development and those that indicate a move towards “The Family Trap”

Screenshot 2014-11-04 09.22.15

 

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