The oldest family businesses –and why they lasted– by @juliusbaer

From ancient Japanese hotels to a 1,000-year-old winery in France’s Loire Valley to an Italian bell-making company that has been chiming since the Middle Ages, what lessons can we learn about intergenerational wealth from some of the world’s oldest family businesses?

Legacy that keeps on flowing

Family bloodlines and spring water flow through Nishiyama Onsen Keiunkan, a Japanese hot springs spa hotel that was established in 705, making it the oldest hotel in the world.

…how did the family keep the hotel going for more than a millennium? It helps that the family connections run deeper than just the owners. The hotel’s longevity owes much to what has been described as “inter-generational pride” among the staff, with some positions passed down the generations in families, helping to maintain the traditions and the high standards.

A clear focus on what the company does – running a hotel – has been key.

For all relevant members of a family business to share the same vision and focus can be a tricky feat –one that takes long-term effort and foresight. Wealthy families can often benefit from the help of advisors or professionals when trying to develop a shared vision among family members.

The sound of intergenerational wealth

The chime of a bronze, handmade Marinelli bell is a sound that instantly takes you back to the Middle Ages -since at least 1339, and perhaps even further back, the Marinelli family in Italy have been producing bells. Now run by the 26th generation, it’s believed to be the oldest family-run business in Italy as well as one of the oldest companies in the world.

Surviving over the centuries -with their customers including the Vatican and the United Nations- has been achieved by sticking with artisanal traditions and continuing to craft bells in the same way that their ancestors would have done.

When a company is built on a solid respect for tradition, it can find the space to thrive. To successfully do this, many family businesses find that constant, open communication between family members is key to ensuring that everyone understands the importance of keeping traditions – and the family values themselves – alive. Starting these sometimes-emotional conversations can seem difficult at first, but with the help of external advisors, wealth creators can successfully bring family members into the discussion.

The alchemy of success and longevity

There’s a secret to the enduring success of Zildjian, a cymbal manufacturer that was founded in Istanbul during the Ottoman Empire before moving to the United States, where it celebrated its 400^th anniversary in 2023. That secret alchemy, which only select family members know, is the formula for creating an alloy of copper, tin and silver that produces the perfect sound. Now in the hands of the 15th generation, Zildjian has created cymbals for some of the most celebrated musicians in history, including drummers for the Beatles and the Rolling Stones.

While the family secret maintains a link to the past, this is a company that encourages ’a spirit of experimentation and discovery’ that guards against complacency. Being in business for centuries is no guarantee of future success –agility is vital.

…If anyone in the family wants to work in the business, they must first get a college degree, which will mean they bring fresh ideas and thinking to cymbal making. One family member doesn’t report directly to another and spouses aren’t involved in the business…

This shows that having an agreed protocol for family involvement in the business, as well as a willingness to adapt to changing norms, can help to protect legacies for generations to come.

History blended with a need to adapt

“A thousand years of history,” it says on the website for the Château de Goulaine estate in the Loire Valley in France, which is one of the oldest wineries in the world. There has been some good luck along the way – the property was in the family of the Marquis de Goulaine all that time, apart from a 70-year period between 1788 and 1858 when it belonged to a Dutch banker. That prevented the property being destroyed or damaged during the French Revolution in 1789.

To stay in business, the Château de Goulaine hasn’t relied on its name alone but has consistently produced excellent wines and has also adapted – there is also a butterfly farm, a biscuit museum and the castle is available to hire as a party venue. There have been reports that the family have recently sold up, though, as we have seen once already, that wouldn’t necessarily mean that is the end of their connection with the place.

As also shown by the aforementioned Zildjian family, a business such as Château de Goulaine needn’t always stick rigidly to plans that no longer suit the changing landscape or societal norms. By diversifying and regularly reviewing your business activities – while ensuring family alignment at all times – companies can adapt to survive for generations.

Building a legacy

A mix of the traditional and the non-traditional have enabled the astonishing longevity of Kongō Gumi, a Japanese temple-building company that was run by the same family for almost 1,500 years. Up until 2006, when it was sold to another firm, it was believed to have been the world’s oldest family business in operation. That success can be partly attributed to its traditional way of building, with a reputation for high-quality craftsmanship, which helped them to win business and to retain skilled workers, and also to the traditional values, such as a strong work ethic, resilience and loyalty to the company.

At the same time, Kongō Gumi could be flexible with other traditions –it wasn’t always the eldest son who took over, as was the norm, if it was felt he wasn’t suited to the role. Sometimes it was decided that a younger son should inherit the company, or even a daughter, at a time when that was uncommon. In addition, the son-in-law would take the daughter’s surname, ensuring that the family name would live on with the company. … choosing atypical successors can sometimes be the best approach with the help of proper, ongoing family alignment.

Avoiding any uncertainty over succession

There is no one way to handle succession in a family business. Hoshi Ryokan, a Japanese hotel that was founded in 718 and has remained in the family ever since, has taken a different approach to Kongō Gumi. From generation to generation, the hotel has been passed down to the eldest son, a practice which removed any uncertainty or confusion over who will take over. The only exceptions have been when there were no male heirs, and a son-in-law has stepped up.

The family philosophy has been to “study the water running down a small current”, observing how the water always keeps flowing and removes small obstacles in its way to improve the stream.

For businesses who wish to create a long-standing protocol that is at once agile and aligned with family members’ values and needs, then professional advice can help them to foster a shared understanding –one that ensures all involved parties feel heard and valued.