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The authors of this article argue that family culture, communication styles, and learning opportunities can be designed to foster and promote entrepreneurship.
The challenge of fostering entrepreneurship in a family environment, as well as for intergenerational business and wealth transfer purposes, is an important and ever-present challenge in this field. Pictet, a Swiss private bank founded in 1805, retains a family culture and is well placed to make a statement on this subject. The word “mindset” comes up a few times in this article, and it’s easy to see why.
The author of this guest article, Honora Ducatillon, is head of family advisory at Pictet Wealth Management. The editors are happy to share this content and hope it sparks discussion. Please comment and email tom.burroughes@wealthbriefing.com. The usual caveats also apply to guest contributor views.
Fostering an entrepreneurial spirit in a family-like environment
Entrepreneurs often talk about the influence of their parents and other important people in developing a “can do” mindset. The transmission of culture within a family, like many other learned behaviors, begins with observing close relatives, listening to their life stories, and understanding the customary language and mannerisms of the family unit.
The opportunity to see the activities, approaches, and ideas of trusted adults is the next best thing to first-hand experience. Understanding how work fits into life, how challenges are met, and where the energy comes from to pursue passions can inform the entrepreneurial intentions of younger family members. It can have a positive or negative impact.
Storytelling is another powerful tool for fostering entrepreneurship. Research shows that the more children know about their family history, the stronger their sense of control over their lives and the higher their self-esteem. (i) This is related to the idea that a strong sense of ‘intergenerational self’ builds a sense of belonging to something larger than oneself. The most helpful stories are those with ups and downs that normalize setbacks and demonstrate resilience.
Communication and parenting styles also influence important aspects of an entrepreneur’s mindset, such as their level of creativity and orientation to action. Every interaction that takes place within a family has a huge impact on how people see and think. As the saying goes, “Values are not taught, they are captured.”
Leverage your family ecosystem for experimentation
To further foster entrepreneurship within families, many see value in leveraging the family ecosystem to create a safe space for experimentation. Families are increasingly recognizing that entrepreneurship requires not only a mindset, but also the acquisition of specific skills, frameworks, and tools. Hands-on experience in the business, investment, and impact fields provides valuable learning opportunities for families.
Some families incorporate a type of opportunity bucket into their family investment strategy, which is sometimes referred to as a “family bank,” “family venture fund,” or “new generation development fund.” This acts as a fundraising tool within the family, providing seed capital for new ventures or investment capital to test new strategies.
The aim is to protect the core family business and investments while supporting the development of the next generation of family entrepreneurship.
Families can also use philanthropy and impact investing to foster the next generation of entrepreneurship.
An example of this working well is a family foundation focused on tackling biodiversity loss across Europe. The Foundation piloted a Junior Board to involve young families in its activities.
Each member was required to be responsible for the funds invested in the cause as needed and to report back at the end of the year. This process resulted in innovative ideas and approaches. More importantly, it gave young people the confidence to take calculated risks, explore and test new ideas, and the courage to learn from their mistakes. These are all important traits for successful entrepreneurs.
In a family ecosystem, failures should be understood as part of the learning process and successes should be celebrated regardless of their size. Creating a safe space for experimentation within the family fosters an entrepreneurial spirit that encourages individuals to take risks, learn from experience, and continually innovate.
all together
Through intergenerational cultural transmission, adopting effective communication styles, and providing opportunities for experimentation, families can create an environment that nurtures, nurtures, and encourages entrepreneurship.
This approach enables emerging generations to develop the mindset, skills and resilience they need to succeed as entrepreneurs, while also preserving their families’ core values and heritage. Masu.
footnote
i, The Stories That Bind Us, Bruce Feiler, New York Times, March 15, 2013.
