Want your family business to survive? The strategic decisions you must make

Tuskys, a family business jointly owned by five brothers and two sisters, has for the first time appointed a non-family CEO in the retail chain's 25-year history to inject professionalism in the business as it prepared to go public. However, Mr Mugweru declared the appointment as invalid, having been made at a time when the family is embroiled in wrangles arising from allegations of fraud, mismanagement and assault and that The board and shareholders have not met nor resolved to appoint Mr Githua as CEO. This confirms the fears that approximately 70% last just one generation. Another 50% don't survive the transition from second to third generation. Since an estimated 80% of businesses across the globe are family-owned, the low survival rate is worrying. In the United States alone, for instance, family-owned businesses (FOBs) are responsible for 60% of total US employment and generate 78% of all new jobs. Further, some of the world's biggest companies are family-owned—News Corp, Samsung, Tata Group, and Walmart to name but a few. What drives this negative statistics among family-owned businesses?

The biggest issue with many family businesses is that they get stuck doing things the same way they have operated for years even when the business out grows that structure. The founding generation holds on to the reins of leadership too long. What makes it even more difficult is that the company's hierarchy typically reflects the family's pecking order regardless of the organization chart. Family members play the same role inside their company. For example, the bully brother/ sister is the same bully in the business forcing everyone to do it his way. Whoever is seen as the head of the household wants to tell everyone else what to do. The peacemaker in the family tries to smooth things over when tempers explode. The mother who controls the budget at home wants to approve how every dollar is spent at the business.