According to the Family Business Institute, less than one-third of family-owned businesses survive beyond the founder’s generation, and just 12% make it to a third generation. So what gives Holden Farms its “staying power”?
Brothers, Kent and Barry Holden, owners of Holden Farms in Northfield, Minn., have strong, underlying beliefs and a respect for people, land and animals that create the foundation for one of the largest pork operations in the country. These underpinnings are paving the way for the fifth generation to take leadership roles.
A New York Times study provides these guidelines based on the commonalities of successful family businesses.
Businesses that continually find ways to reinvent themselves are much more likely to make it through several generations of ownership. That means watching trends and being willing to make changes as needed.
For example, Holden Farms uses its own research facilities to test new products or protocols before incorporating them into the operation.
Good succession planning. While succession practices vary, the family businesses that continue to thrive are those that pay careful attention to planning for the next generation of leadership.
No guaranteed employment
“Hiring family members just because they are family is a recipe for disaster in family businesses,” says Kira Doyle, a lawyer who specializes in estate planning in St. Petersburg, Fla. “Those companies that have rigorous standards for employment of family members fare better in the long run that those that do not.”
Having outside advisers or consultants can bring important new perspectives to a family business, and can be used to “shore up” areas where family managers might lack expertise.
These tips are good advice for any business that wants to be successful beyond the first generation of leadership.