By Richard M. Segal
July 1, 2008
Shirt sleeves to shirt sleeves in three generations is an American translation of a Lancashire proverb, “there’s nobbut three generations atween a clog and clog.”
Some say that Andrew Carnegie, the famed 1800s industrialist from Scotland, brought the proverb’s message to the New World. Further investigation proves that the adage is not unique to any one country or culture. In Italian it is “dalle stalle alle stelle alle stalle” (“from stalls to stars to stalls”). The Spanish say, “quien no lo tiene, lo hance; y quien lo tiene, lo deshance” (“who doesn’t have it, does it, and who has it, misuses it”). Even non-western cultures, including the Chinese, have a similar proverb.
A proverb is a short popular saying, usually of unknown and ancient origin, that expresses effectively some commonplace truth or useful thought. Is “shirt sleeves to shirt sleeves-¦” still a commonplace truth or useful thought? I think not, but it had its place.
Decades and centuries ago, when families were much more connected and wealth was more of a family asset rather than the individual achievement it is today, the
proverb made more common sense. Today, silver spoons are very difficult to come by. Families get spread over countries and continents. And while it is true that three generational family businesses are rare, it would be false to say that the third generation is in the poor house (another old concept) as “shirt sleeves-¦” suggests.
As parents we always hope that our children’s lives will be better than ours-¦fuller, happier, longer. Or in the famous words of John Adams, “I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.” By the way, the Adams family was considered by many to be a family business - a family farm and the business of politics.
The world is open to our children in a way it never has been before. Our offspring are encouraged to find themselves and to uncover their life’s passion. It only makes sense that many more of them whose families own businesses would choose a career outside of the enterprise. What becomes of the family business when the family is no longer interested in management or ownership? Obviously, the family can retain ownership and hire outside management. However, few families choose this option. More often, they will choose to sell when the last member of the family is no longer interested in perpetuating the family owned business. Often the sale brings riches far beyond expectations to be shared with the family through the estate plan. Other times there is no real market for the business and liquidation becomes the end. Even so, the third generation is likely to be well heeled and onto a career of their choosing. Should we call this failure?
Families are a microcosm of society. In this fast-paced world we live in, where things change overnight and our children are told to expect to have four careers in their working life, it just makes sense that family businesses might only last 50 to 60 years on average. Maybe that is success - John Adams probably thought so.
Richard Segal is the chair of the Family Business Council, a membership organization of family owned businesses. He can be reached at [email protected].