Family businesses cannot be bucketed in one single category or even compared directly with each other. The reality is that each family business comes with its own history, its own dynamics, and its very own journey. These vastly differential paths lead to very different genes and vastly different external faces for these businesses. Any attempt to grade them or straight-jacket them will not be a viable or a wanted activity
Each family business has its reason for existence; from an entrepreneur who couldn’t finish his studies and borrowed some money from his friends/family and later on became a big name in the consumer space or a family business germinating from a unique opportunity that an existing business family saw which subsequently broke away as a separate brand, etc. Various journeys like these actually affect the business psychology, the way the family reacts to risk, whether the business remains conservative in their public image, how the family handles the incoming nextgen, etc.
How a family business owner handles conflict, aspects of control, gender diversity, aspects around charitable initiatives will be an outcome of a combination of family & business history and voluntary initiatives that the family would have undertaken. There is no right or wrong way in these areas and many a time the family may not even have an option as to how each aspect above shapes up in the organization. The struggle each first-gen family business owner has to go through determines how much focus he/she is able to give to each aspect. As there would be very different business performance journeys for each family business, similarly, there would be a different level of success that each business family attains in each of these parameters.
There are big differences that we have seen is in the way businesses are controlled. From a central family member-controlled top-level org structure to a professionally staffed top management, each family business will have a different approach. Similarly, the attitudes of the business towards the speed of business growth, diversification into unrelated businesses, etc. are dependent upon the set of values & systems that the family has inculcated and put in place. Make no mistake, the primary concern (and fear) of a family business owner is around business continuity. Family frictions emanate from issues around perceived biases, a sense of being left out from family decisions, lack of communication around the current state and future course of the business, etc.
All the factors & parameters mentioned above clearly show that the family business space is not one bucket but a combination of very differently structured, owned and run businesses that are trying to sustain over generations. They have their own challenges and hurdles and are attempting to better themselves, in some cases slowly and in others using fast disruptive changes.
Our team at CERVIN we have engaged with over 250 family businesses over the last seven years and found some common & some very unique traits that each family has. With a differing stance towards their business as to how it should be run, controlled, grown to the stance towards how the family wealth has to be preserved or grown, we have learned that each family requires very different handling and that’s what we have inculcated in our boutique advisory platform.