Four Circle Model™
This short video will introduce you to the Four Circle Model, a new way to define success in the Family Business System.
A simple business system in made up of two main component parts: Ownership and the Business. A third component part is added in the case of a family business. The direct impact of family is prominent in a family business system and adds significant complexity.
The traditional model is often largely focused on building family wealth, which is accompanied by an attitude that wealth is the measure of success. When family businesses single-mindedly focus on wealth creation, negative impacts can arise. Often, these effects are only noticed after challenges arise (e.g., issues of entitlement within the family, breakdowns in communication and relationships or worse the collapse of the system).
In the 1970s, John Davis and Renato Tiguiri introduced the Three Circle model to illustrate the relationship between the three components of the family business system. It was designed, as John Davis stated, “to help researchers, academics, managers and families think more clearly about the strengths and challenges of these systems.” These strengths and challenges exist where the circles overlap. Although the Three Circle Model is an excellent tool that points to where the challenges exist, it falls short in demonstrating where the solutions to these challenges lie.
To move beyond simply observing, we need a model that illustrates how to deal with the challenges that business families face. It is with this in mind that we developed the Four Circle Model™. The underpinning of the new model is to create separation or “Space to Breathe” between ownership, the business, and family. The separation allows for objective thinking and mutual understanding of the roles within each of the three circles. Space to Breathe is created by introducing a purpose that individuals across the system can unite behind.
The Four-Circle Model introduces a new circle to the system: Unifying Purpose™. It is a transformative element that can move the family business system from the state of Unconscious Entrepreneurialism to one of Enlightened Continuity. For more information on these two concepts, please visit our website. Unifying Purpose™ drives impactful change.
When a Unifying Purpose™ has been identified, developed, and taken root throughout the system, it operates in a transformational way. A natural appetite for further education and change develops, leading to a self-generating desire and capability for growth. It is self-perpetuating and cross generational.
The outcome of developing the Four Circle Model™ approach within the family business system is immense. The ripple of “impact” that starts with identifying your Unifying Purpose™ is part of a global movement, towards a triple bottom line purpose, that’s growing in strength and adoption. It will positively impact your supply chain, your customers, your community, and the environment, sparking greater sustainability.
We can help you identify your circle of Unifying Purpose™. For more information, call us.
Family Enterprise Planning Services
- Business Structure Education
- Discussion Facilitation
- Family Meeting Facilitation
- Family Constitution Development
- Family Will Planning and Co-ordination
- Advisory Board Development
- New Buy–Sell Agreement Development
- shareholder discussion facilitation
- strategy brainstorming
- detailed recommendations
- outline development
- Letter of Understanding (LOU) development
- co-ordination of legal advisors
- implementation oversight
- regular reviews
- Existing Buy–Sell Agreement Reviews and Stress Testing
- Buy–Sell Funding Analysis
- Insurance Reviews
- New Insurance Implementation
- Exit Strategy Planning
- Continuity Planning
- Succession Planning
- Tax Planning
- Income and Asset Modelling
We can help make your family enterprise enduring – give us a call today.