The Mystical Dynamics of Family Capitalism from Generation to Generation

It is not often that one "goes to Rome and... sees the Pope", but it certainly happens even more rarely to hear the Holy Father discuss with entrepreneurs about their businesses: this happened during the audience granted to members of the board of the Italian Association of Family Businesses (AIDAF) on the occasion of the 19th national conference.

Trying to keep the strong emotion felt at bay, the first (personal) consideration is how amazing it is how in just a few minutes the Holy Father managed to bring out insights and ideas that familyandtrends has not had in twenty years of full-time study on family capitalism. Let us look at some of them.

"The delicate balance between family and work is expressed in courage and entrepreneurial responsibility": in family capitalism, it is indeed necessary to find a balance between family and business; John Davis chose spheres for his model precisely to emphasise the need to work continuously to adjust constantly moving spheres with weights and counterweights.

Courage and responsibility are two of the characteristics of every entrepreneur, but why? "Action that is born from the heart is bold, it does not retreat into itself, but knows how to look far": the prime mover of the entrepreneur is the heart, it is not the mind, it is not cold logic, it is not immoderate profit; that is why his action is often not complete if it is limited to the impact it has on the business and profit, in the words of the Holy Father "it does not retreat into itself". This is why family businesses know how to 'look far ahead' (they are oriented towards the long term, we say): by not doing so you turn in on yourself, you end up looking at your own navel. How can this be done? "A continuous tension between the roots of the past and the innovations of the future is necessary; otherwise one stops, one's belly is full, and one's action ends". With all due respect to Schumpeter and creative destruction, this makes it easier to understand: it is not just that competition makes products and business models obsolete; it is that the entrepreneur who stops being an innovator of the past and a custodian of future roots stops the enterprise and himself.

One could not expect simple words on accountability, the Holy Father in his Encyclical Laudate Deum had warned: "A healthy approach to the value of commitment, to the growth of one's own abilities and to a commendable spirit of initiative is one thing, but if one does not seek real equality of opportunity, meritocracy easily becomes a screen that further consolidates the privileges of the few with greater power". On this occasion, he was, if possible, more direct: "...and responsibility, then, is the secret of economics, a word that means housekeeping (oikos nomos) and is therefore an expression of care. Care for your business, care for the family, care for our common home, care for future generations'. Responsibility means caring.