In many countries, family businesses are a significant part of the economy and an engine room of economic growth. They carry certain attributes that are often a mix of positives and negatives. It’s important for owners and stakeholders to understand what distinguishes them from non-family businesses, and how to leverage the positives and avoid the negatives. Here are a few to think about:
Patient Capital. Businesses that are not slaves to public markets or private equity fund exit timelines. They can have very long timeframes for their target returns, and can ride waves that might cause other businesses to have to shift dramatically or even fail. However, they can lack the urgency sometimes needed, or the drive for regular strategic renewal.
Making Quick Decisions. With a small number of decision-makers who may live in close proximity and see each other regularly, family businesses are often not bogged down by the bureaucracy of larger businesses or corporates. But they may see governance structures, independent voices and oversight as a waste of money.
Employing Family Members. Being able to tap into talent that you know and trust is great. That’s only as long as family members join the business for the right reasons, and with the right preparation, and the family has appropriate policies and mechanisms such as codes of conduct to manage conflict.
Purpose. Being part of something bigger than ourselves (family, community, organisation) is something people find very fulfilling. Whether or not you are a family member, it can be a huge motivation to join and stay, and a great reason to get up every morning.
The original article was published in Family Business: Superpowers in Family Business - David Werdiger
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A successful family advisor, business strategist, entrepreneur, and thought leader with a proven track record of achievement in driving innovation and growth for entrepreneurial endeavours and not-for-profit organisations.
David's experience includes founding and building multiple businesses from the ground up, and expanding and leading operations into new markets. He is recognised by colleagues as a creative problem-solver and strategist with expertise in coming up with ideas and creating new ways of improving business, strategy, operations, and results.
As a business and family advisor, he provides clients with expert business advice on intergenerational business and wealth transition, advancing entrepreneurial efforts, setting up good governance, improving financial and operational results, and strategic direction. He is also a seasoned program leader with an aptitude for providing governance in corporate and philanthropic pursuits with a strong focus on culturally focused non-profits.