We argue that four qualities account for strong and sustainable innovation outcomes in family firm settings: 1) a long-term orientation that enables family firms to be patient until investments in innovation pay off, 2) management capabilities that are difficult to imitate because they take time to develop and are socially complex, 3) a stewardship approach to decision making and operations that emphasizes high involvement by employees and cooperation with customers, and 4) prioritizing innovation activities that contribute to the identity, reputation, and enduring legacy of the family firm. These four characteristics are manifest in varying degrees among the three major “actors” that constitute a family firm - the business managers, the family, and the owners. Because these players perform different roles and have different priorities, family firms must effectively coordinate and channel their influence to achieve superior performance. In the case of innovation, the interaction of family, managers, and owners creates a “trilemma” of challenges. A trilemma suggests difficult-to-resolve tensions stemming from three arenas. For family innovators, these revolve around leveraging financial resources appropriately, administering best practices effectively, and engaging qualified personnel impartially.
Justin B. Craig, G. Thomas Lumpkin and Marc Meyer
Kevin Au, Justin B. Craig and Kavil Ramachandran
Exploring Transgenerational Entrepreneurship in Family Firms
Edited by Kevin Au, Justin B. Craig and K. Ramachandran
This book analyzes the findings reported in the first Asia Pacific summit of the Successful Transgenerational Entrepreneurship Practices (STEP) project. Researchers in Australia, China, and India discussed eleven in-depth case studies to shed light on the challenges that business families and family businesses faced in continuing and extending their entrepreneurial capabilities across multiple generations.