The Health & Culture paradox refers to the balance between maintaining a healthy business environment alongside adapting to cultural shifts within the family unit. With a shift in generations, so do their perspectives on leadership, decision-making and work-life balance.
In the early stages, founders and first-generation leaders often prioritize stability, legacy and control, valuing hard work, sacrifice and traditional leadership styles (Eddleston et al., 2013). However, as the second generation steps in (often siblings or in-laws) the focus may shift towards collaboration (since in many cases multiple family members will have a say in the company), innovation and work-life integration. These generational differences can create misalignment in strategic direction and decision-making. A founder might see long working hours as dedication, while their successors might advocate for flexible work policies and digital transformation. Siblings and in-laws entering leadership roles bring new dynamics, loyalties and sometimes rivalries. Studies show that family firms with open communication and structured governance handle these shifts better, ensuring that tradition and adaptability coexist (Jaskiewicz et al., 2015).
Finding a balance between respecting tradition and welcoming change is a challenge as family companies develop. Without clear governance structures, generational changes can lead to conflict over direction, leadership and corporate culture. However, if handled properly, such transitions can cement the business's strength and long-term focus.
The Hermès family is a perfect illustration of this dynamic; they have managed to preserve their tradition despite internal generational changes and external challenges. The early 2000s presented challenges when Bernard Arnault's LVMH secretly acquired a significant stake (almost 18%) in Hermès, raising concerns about a potential takeover. In response, approximately 50 Hermès descendants consolidated their shares into a holding company, H51, to protect the brand's independence and family legacy (Bennedsen et al., 2014) . This unity highlights the family's commitment to stewardship, ensuring the brand's values are preserved for future generations.
Sources:
Eddleston, K.A., Kellermanns, F.W. and Sarathy, R., 2013. Resource configuration in family firms: Linking resources, strategic planning, and technological opportunities to performance. Journal of Business Research, 66(11), pp.2165-2173.
Jaskiewicz, P., Combs, J.G. and Rau, S.B., 2015. Entrepreneurial legacy: Toward a theory of how some family firms nurture transgenerational entrepreneurship. Journal of Business Venturing, 30(1), pp.29-49.
Bennedsen, M., Crawford, R.J. and Hoefer, R. (2014) 'Luxury Wars: How Hermès Faced Down its Rival', INSEAD Knowledge, 10 June. Available at: https://knowledge.insead.edu/family-business/luxury-wars-how-hermes-faced-down-its-rival (Accessed: 7 March 2025).
Thanks for this thoughtful post—it’s clear you’ve been reflecting on real tensions that come with generational shifts in family businesses. I really like the example of Hermès, and you’ve backed it up with solid sources. That said, I’d love to see a bit more personal insight or examples from your own context—something lived, not just studied. That’s what really fuels discussion here.