The aspiration to thrive in the long run is among the most distinctive traits of family firms. On the one hand, a long-term view can spur the family firm to plan and secure its human resources (HR), thereby attracting local employees seeking stability, and retaining them for decades. On the other hand, low employee turnover can be a barrier to innovation, which is needed to survive and compete in the long run. Nevertheless, numerous family firms are renowned for being simultaneously excellent employers and outstanding innovators. Therefore, how can a long-term oriented family firm nurture its employees while pursuing innovation? We conducted a longitudinal case study on Carl Schlenk AG, a fourth-generation family firm consistently awarded for both its HR management (HRM) and innovation initiatives. Our investigation led us to identify distinct family firm characteristics of credibility, solidarity, and loyalty which engender a unique virtuous cycle of reciprocal reinforcement between sophisticated HRM and innovation practices, ultimately fostering mutual gains for the family firm and its employees. We offer contributions to HRM and innovation management research in the context of family firms and beyond.