A paradoxical approach to Transgenerational Potential
The STEP Project has been a pioneering effort in the study of transgenerational success. We know that the likelihood of success across generations depends of the transgenerational potential of the business family. During the last two years, I have been working with Cristina Cruz, my doctoral advisor at IE Business School, in a new “paradoxical approach” to transgenerational potential. I our view, transgenerational potential depends on the ability of the business family to achieve a “double balance”. Working in the intersection of strategy and family business research, we have empirically proved that entrepreneurial families that strive in the long run have been those that are able to manage two paradoxical balances, one in the business side and another in the family side. Regarding the first balance, families should not only be able to focus in the current competitive advantage, but also in the future competitive advantage. Based in organizational theory and strategic management, we know that companies with this ability are “ambidextrous organizations”, organizations that “exploit” their current competitive advantage but at the same time “explore” new capabilities, markets, products, and customers to find a new competitive advantage. The second balance is between socioemotional wealth dimensions -in Berrone at al., (2012) words, FIBER dimensions-. Family business scholars have argued about the potential of socioemotional wealth in our understanding of family firms’ behaviors. In our studies with Cristina, and based in the work of Luis Gomez-Mejía and other talented researchers, we have found that we need a more granular approach to really understand family firms’ heterogeneity. Specifically, we assert that business families must work and develop all FIBER dimensions, but in a balanced manner. Therefore, our investigation demonstrate that the likelihood of transgenerational potential is higher in business families that are able to balance exploration with exploitation and socioemotional wealth dimensions.
To sum up, entrepreneurship is important, but the ability to transform entrepreneurial ventures in actual results is equally important. Furthermore, borrowing from Pramodita Sharma’s work, “warms heart” are important, but with the right balance of “warmness”. These findings resonate in one final reflection from my side, STEP Model revolves around Entrepreneurial Orientation and Familiness, the previous paragraph showed that we, as STEP Scholars, might start to talk about pushing our model further to include socioemotional aspects and a deeper understanding of whether Familiness capabilities are able to allow exploitative activities.