Crafting an Enterprise Strategy for Your Family Business
HBR Article: Jennifer Pendergast
September 2022
Ensuring the resilience and longevity of a family-owned enterprise requires a strategy that's focused on growing joint family wealth, often through a diversified portfolio of jointly-held assets.
But a strategy of broad diversification is difficult to execute, so it should not be undertaken by families without the appropriate structure and processes. First and foremost, successful multi-generational families need to create a long-term vision of the boundaries of the enterprise. Once the decision to diversify is identified, families who are successful realize the need to dedicate significant resources to identify, evaluate, and prioritize opportunities to expand enterprise borders.
Finally, families who are successful must be willing to rebalance their portfolios, selling off underperforming assets or assets that are at the peak of their value and allocating capital only to areas that have a strong long-term outlook. Families with a successful enterprise diversification strategy achieve this outcome by clearly articulating their strategy and developing structures and processes that allow for effective oversight of the diverse enterprise.
