Keeping The Entrepreneurial Spirit Alive

The author of this article argues that family culture, communication styles, and learning opportunities can be designed to cultivate and encourage entrepreneurship. 

The task of fostering entrepreneurship in a family setting –
not just for intergenerational business and wealth transfer
purposes – is an important and ever-present one in this sector.
Pictet, a Swiss private bank dating back to 1805, which retains
its family culture, is well placed to opine on this subject. A
word that comes up several times in this article is
“mindset,” and we will shortly see why. 

The author of this guest article, Honora Ducatillon, is head
of family advisory, Pictet Wealth
Management. The editors are pleased to share this content,
and hope it stirs debate. Please comment and email tom.burroughes@wealthbriefing.com.
The usual caveats apply to views of guest contributors.

Cultivating entrepreneurship in a family
environment

Entrepreneurs often talk about the influence of parents or other
significant figures in developing their “can do” mindset.
Cultural transmission within families – like many other
learned behaviours – comes from observing close family members,
hearing relatives” life stories and picking up the habitual
sayings and mannerisms of the family unit.

The opportunity to watch the activities, approaches and mindset
of a trusted adult is the next best thing to firsthand
experience. Understanding how work is integrated into their
lives, how they deal with challenges, and where they find energy
to pursue their passion can positively, or negatively, influence
the entrepreneurial intentions of younger family members.

Storytelling is another powerful tool for cultivating
entrepreneurship. Research suggests that the more children know
about their family’s history, the stronger their sense of control
over their lives and the higher their self-esteem. (i) This is
linked to the idea that a strong sense of “intergenerational self
” builds a feeling of belonging to something bigger than
themselves. The most helpful narratives are the ones with ups and
downs normalising setbacks and showcasing resilience.

Communication and parenting styles also influence important
aspects of the entrepreneurial mindset – for instance, the level
of creativity and, the orientation towards action. Every
interaction that takes place within the home significantly
influences one’s perspectives and mindset. As the saying goes
“values are caught, not taught”.

Leveraging the family ecosystem for
experimentation

To further foster entrepreneurship within the family, many see
value in leveraging the family ecosystem to create a safe space
for experimentation. Families are increasingly recognising that
entrepreneurship requires not only a mindset but also the
acquisition of specific skills, frameworks, and tools. Practical
experiences in business, investment, or impact fields can provide
valuable learning opportunities for family members.

Some families include a sort of opportunity bucket in their
family investment strategy, which may be referred to as a ‘family
bank,’ a ‘family venture fund,’ or a ‘rising generation
development fund.’ This can serve as a tool for intra-family
financing, providing seed capital for new business ventures or
investment capital for testing new strategies.

The aim is to support the entrepreneurial development of the
rising generation of family members while safeguarding the core
family business and investments.

Families can also use philanthropy and impact investing to
cultivate entrepreneurship within their rising generation.

An example of where this worked well was in a family foundation
focusing on tackling biodiversity loss across Europe. The
foundation trialled a junior board, to engage younger family
members in its work.

Each member was put in charge of a sum of capital to put towards
the cause as they saw fit, with a requirement to report back at
the end of the year. The process generated innovative ideas and
approaches. More importantly, it ignited a confidence in the
younger generation to take calculated risks, explore and test new
ideas, and it gave them the courage to learn from failure – all
crucial attributes of successful entrepreneurs.

In the family ecosystem, failure should be understood as part of
the learning process, and successes, regardless of their scale,
should be celebrated. Creating a safe space for experimentation
within the family nurtures that entrepreneurial spirit, where
individuals are encouraged to take risks, learn from their
experiences, and continuously innovate.

Pulling it all together

By embracing intergenerational cultural transmission, effective
communication styles, and providing opportunities for
experimentation, families can create an environment that fosters,
cultivates and encourages entrepreneurship.

This approach empowers the rising generation to develop the
mindset, skills, and resilience needed to succeed as
entrepreneurs, while also preserving the core values and legacy
of the family.

Footnote

i,  The Stories That Bind Us, Bruce Feiler, New York
Times, 15 March 2013.