Culture of Innovation in the Family Business

A Culture of Innovation in the Family Business

One of the reasons so many family businesses fail to transition from one generation to the next is they do not pay sufficient attention to innovation in their business, industry and marketplace. Although innovation drives the early years of the family business, the following generations often tend to become “caretakers” rather than innovators.

The ultimate challenge to increasing growth, profit and sustainability is to achieve the proper balance between the “traditions” of the family’s business and innovation. For a family business to succeed from generation to generation, it will have to overcome the tendency toward being risk-adverse as it matures. Simultaneously the proper attention, support and funding must be given to embed to make innovation a core competency. 
 
So, how does a family business embed innovation into its culture?
 
There are three primary requirements for a culture of innovation:

1. Values and Personal Skills: The values of openness, intention, courage, integrity and calmness are essential. And creativity, collaboration and leadership skills jump start and sustain the innovation process.
 
2. Process:  Teams are more effective when there is a structured approach to guide their thinking as they transform ideas into innovations.   
 
3. Environment: There are forces inside the organization that will either enable or inhibit innovation. Aligning these forces - People, Structure, Processes and Technology - in support of innovation is the responsibility of family leadership.  
 
In sum, the capacity to innovate is impacted by who we are (values/skills), what we do (process) and the environment in which we work (context). When a family business interconnects and integrates these three components, it will have a culture of innovation.

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