5 Steps Small Businesses Can Take to Improve Their Work Culture

Guiding Multi-Generational Enterprises in the “Cousin Stage”

As multi-generational family enterprises evolve, they inevitably reach what’s known as the “cousin stage.” This phase describes when siblings, cousins, and their spouses suddenly take on ownership stakes, and more heirs naturally participate. Typically, this is in the third generation. Preserving unity and continuity gets tested as more relatives with divergent interests become involved. As someone who stewards a multigenerational enterprise, you must make objective calls by evaluating which portions of your wealth strategies fuel growth and which dilute it these days. This holds particular relevance for ultra-high-net-worth (UHNW) families with significant multi-generational assets at stake in an enterprise. The decisions made in the cousin stage may set the tone for future generations’ involvement and stewardship.

Reinventing Strategy for Sustained Growth

A common pitfall for long-standing family businesses in the cousin stage is “strategic exhaustion,” where traditional ways of operating no longer provide a viable path forward. Objective performance reviews across the enterprise portfolio are necessary to identify struggling business units and reallocate resources to growth areas if needed. There should also be an openness to acquiring or shedding particular businesses and exploring new spaces. These collaborations should focus on data-driven business strategy instead of sentimentality.

UHNW families often require trusted advisors to provide impartial guidance on strategy. An outsider’s perspective prevents stagnation and challenges assumptions. With substantial wealth on the line, the stakes in strategy conversations only increase, which is where a third, objective party provides objective insights. Careful scenario planning and risk management through this unbiased lens increase your family’s legacy and business continuity.

Establishing Effective Leadership

With more relatives participating in the family enterprise, unbiased assessment often reveals gaps, both in leadership skills and future executive potential within the heirs. A thorough evaluation by independent advisors can benchmark the current leadership team’s talents against those the business will need long-term. This analysis should also gauge which family members actually have the drive and aptitude to take on executive or governance roles.

If such an assessment determines that heirs need more specialized skills or an interest in leadership, recruiting professional managers should become standard practice. Similarly, preparing only qualified and committed next-generation family members through tailored career tracks creates selective pathways for those who merit significant responsibility. Outsider executives generally operate more objectively regarding performance issues. Additionally,they increase the diversity of perspectives instead of circulating narrow assumptions.

Professionalizing management while carefully integrating qualified heirs through merit-based practices ends up lifting all boats. With this, it prevents handing off control prematurely to heirs, who may unintentionally jeopardize what previous generations built.

Managing Family Expectations

As ownership extends across family branches, various assumptions can easily brew around whose interests get centred. Establishing consistent forums for airing questions and concerns allows adjustments if certain policies around capital allocation, career tracks, or performance metrics stir controversy.

Giving your next-gens voice in planning for their own leadership development also engages their interest and helps them focus on learning. Facilitating open conversations ultimately provides helpful touchpoints for where the family business is headed, ensuring that it resonates across generations. This understanding then cultivates engagement and ownership for the family enterprise’s next era.

The decisions ultra-high-net-worth families make during the cousin stage to professionalize management and governance greatly shape future continuity and family unity for the coming generations. When structures support transparency, accountability, and clarity for all stakeholders, the increase in family involvement stands to strengthen, not erode, your legacy’s future.

As you prepare to enter your cousin stage, are you preparing for continuity while considering the growing complexity of multiple voices? Beacon Family Office objectively evaluates strategies and leadership to sustain multi-generational enterprise success. To get started with an initial conversation for unbiased guidance, connect with us today.

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