September 5, 2003

Babson College launches study of family business

By Sheri Qualters
Journal Staff

WELLESLEY - Babson College is leveraging its entrepreneurship with a new focus on family-owned businesses to make a name for itself in the field of family businesses.

For example, Babson has just launched its Institute for Family Enterprising this fall, capitalizing on an apparently stable segment of the economy. The institute's new director Timothy Habbershon said the Wellesley-based school is formalizing the research and work by a core group of professors.

"We want to focus on transgenerational entrepreneurship and wealth creation," Habbershon said. "What we mean by that is not just how to pass the money or the business from one generation to the next, but how to pass on the entrepreneurial capabilities."

And late last month, the school's Center for Women's Leadership released a study of women-owned family businesses across the United States. The faculty director for the women's leadership center, Nan Langowitz, said the data came from a general Babson study released earlier this year on family-owned businesses.

"We said, let's look at the gender angle on the same data and see what we can learn about women-owned family firms." Langowitz said.

Since privately-owned businesses are the foundation of the U.S. economy, it's no surprise that Babson is paying more attention to the family-owned niche, said management consultant Jeffrey Davis, chairman and founder of Needham-based Mage, LLC, which advises privately held companies with revenue from $5 million to $350 million.

"Some people are getting smarter and saying let's go where the fruits are, where everybody's working," Davis said.

Regarding Babson's fray into researching the characteristics of women-owned family businesses, Davis said women-owned business are the fastest-growing segment of the economy.

"Any program developing that wants to organize itself in today's world is going to talk more directly to (both) women and men," said Davis.

Babson's new center may also prove to be something of a rival to Northeastern University's 13-year-old Center for Family Business. Besides research on a laundry list of topics affecting family businesses, including founder centrality, conflict and web usage, Northeastern's center holds seminar on leadership development, said executive director Paul Karofsky

Karofsky expects family business research and consulting to be a growth area over the next couple of decades as the baby boom population reaches retirement.

"We'll see the largest transfer of wealth in the history of the world," Karofsky said, "The cost, in economic and family terms, of the inability to transition, the cost in human capital and financial capital, is devastating."