The Challenge of the Third Generation: How Reading Fiction Can Help Family Businesses Thrive

The Challenge of the Third Generation: How Reading Fiction Can Help Family Businesses Thrive

Family businesses face a unique challenge when it comes to transitioning to the third generation. Often, the children of the founder struggle to provide the necessary leadership for the business to survive. The success of this transition is heavily influenced by the tone set by the founder in terms of family involvement. This tone can fall into two extremes: the family-first culture and the business-first culture.

Family-first businesses, commonly found in certain ethnic groups, give the family a central place in the company. This approach can be a brilliant success in the second-generation management phase. However, when the third generation takes over, they may bring with them unresolved problems from the previous generation. This can lead to a difficult situation where the old partnership is dying just as the third generation is trying to build their own working relationship.

On the other hand, business-first companies, often found in cultures that value institutions and the free enterprise system, prioritize company norms and values above the needs of the family. While this approach may seem more structured and business-oriented, it can also create challenges in maintaining family unity and harmony.

Interestingly, reading fiction can play a role in addressing the challenges faced by family businesses in the third generation. Fiction has the power to change individuals on an individual level, particularly in cultivating empathy. Empathy is a crucial skill for effective leadership and building strong relationships within a family business.

Research suggests that reading fiction activates the language processing center of the brain and increases global blood flow, mimicking the neural activities of the experiences described in the story. This activation of the brain allows readers to gain a close approximation of someone else's experience. In turn, this can lead to increased empathy and understanding of others.

Studies by Natalie M. Phillips and others have shown that reading fiction is associated with higher levels of affective empathy, which is the capacity to share another person's feelings and emotions. This affective empathy, in turn, predicts immediate helping behavior. In other words, reading fiction can make us more likely to help others in the moment.

Furthermore, reading fiction allows us to practice taking on someone else's perspective, improving our social awareness. As postmodern author Samuel Beckett once said, "fail better" at understanding others' experiences. By establishing a habit of reading fiction, we can increase our empathy and emotional intelligence, which are essential qualities for successful leadership in a family business.

In light of these insights, here are three actionable pieces of advice for family businesses in the third generation:

1. Foster a culture of reading and discussion within the family: Encourage family members to read fiction and engage in conversations about the books they've read. This will not only promote empathy but also create a shared language and understanding within the family.

2. Prioritize open communication and conflict resolution: The unresolved problems from previous generations can hinder the success of the third generation. By promoting open communication and addressing conflicts in a constructive manner, family businesses can build a solid foundation for their working relationships.

3. Seek external guidance and support: Sometimes, family dynamics can be complex and challenging to navigate. Seeking the help of external advisors, such as business consultants or family business experts, can provide valuable insights and strategies for overcoming obstacles and ensuring a smooth transition to the third generation.

In conclusion, the challenge of the third generation in family businesses is a complex and nuanced issue. By recognizing the importance of empathy and emotional intelligence, and incorporating the practice of reading fiction into the family culture, businesses can increase their chances of success. By fostering open communication, resolving conflicts, and seeking external support when needed, family businesses can thrive across generations.