Family Institutions and the Future
Dr. Mevlüt Büyükhelvacıgil, CEO of Zade Global Inc., is a renowned speaker and expert on family businesses across generations. He speaks frequently on the subject to business leaders and organizations and has authored textbooks used in universities around the world.
His books include: “Institutionalization and Constitution Implementation in Family Corporations” and “Family Constitution: From Family to Institution.”
“Family businesses establishing approximately 90% of the world economy, usually face the risk of dissolution after 1-2 generations. According to researches conducted all around world, only 3% of family companies can reach to 4th generation.
There are many factors that influence on this situation which poses a great risk for the economy. Family companies that are under the control of family members, managed by classical methods, not institutionalized, have disagreements between old and new generations, and are in conflict with each other come to dissolution point by failing to adapt to the innovations and developments occurred due to the change process. Professional staff also avoid working in family companies that can not be institutionalized.
Family companies can take measures against this risk by establishing a “Family Constitution”. The “family constitution”, which is “a body of written rules and does not leave the company’s future to chance”, provides the company to institutionalize and to take firm steps forward with new products and services by protecting the family culture.”