Principles and Agents

When we talk about family business, we’re typically talking about fairly well established family businesses that have a good chance of continuing on for quite some time. Right back to the theory of agents and principles, principles are going to be around for a long, long, long time, agents come and go. And if you look at the managers of most organizations, those that are professional managers, candidly, are not very long term. 10, 20 years with an organization seems to be relatively long, 5-10 years in a senior position seems to be relatively long. With a family orientation, you’re thinking in terms of generations rather than decades, so that gives you a different orientation as to time and I think that makes a big difference.

When we talk about family business, we’re typically talking about fairly well established family businesses that have a good chance of continuing on for quite some time. Right back to the theory of agents and principles, principles are going to be around for a long, long, long time, agents come and go. And if you look at the managers of most organizations, those that are professional managers, candidly, are not very long term. 10, 20 years with an organization seems to be relatively long, 5-10 years in a senior position seems to be relatively long. With a family orientation, you’re thinking in terms of generations rather than decades, so that gives you a different orientation as to time and I think that makes a big difference.