JEDDAH, 27 September 2004 — How family businesses could be prevented from breaking up and what proactive measures should be taken to see that they are smoothly handed down to the next generation were the focus of a meeting held here on Saturday night.
Three major building blocks to any family business include the family, the business and the family members. “Harmonizing, integrating and rejuvenating them is what the Family Business Academy (FBA) wishes to accomplish,” said FBA President Sobhi Batterjee.
The FBA, which hosted the event, was established recently to offer advisory services on conflict resolution, family council formation and operation, constituting and operating an effective advisory or governing board and succession planning. It will foster family businesses and create trans-generational wealth and values through contemporary educational programs, advisory services and networking opportunities.
A family business is one in which business and family relationships have significant impact on each other. Globally, businesses owned and managed by a single extended family account for about 90 percent of all entrepreneurial ventures. Only a third of the family businesses survive up to the second generation and a mere 10 percent up to the third generation.
“Helping family businesses survive and grow from generation to generation amounts to facilitating the overall economic development,” said Batterjee who also heads the Saudi German Hospitals Group.
“Keeping family businesses healthy into the next generation” was the subject of a presentation by Professor B.P. Murali, academic head of FBA. Being the first institution of its kind in the region, the FBA is intended to be a cost-effective and result-oriented resource center for those seeking knowledge or information on managing family businesses.
The FBA will be a consultancy center catering for the needs of owners, managers and non-working members of family businesses. For younger members of the family businesses, the academy will be a counseling and mentoring facility.
“The FBA will provide a networking platform linking family businesses across the Middle East,” he said and referred to a Japanese family business that is now into its 40th generation.
To begin with, the FBA will offer workshops to family business owners on key themes such as succession planning, conflict resolution and improvement in overall health of such businesses. The first monthly workshop is to be held on Oct. 25.
The FBA will also constitute a family business forum, a membership program for owners of family businesses offering a variety of learning experiences like breakfast seminars on topical themes, peer group meetings, weekend seminars on need-based issues and a family business newsletter for members.
