Family Businesses: Strength, Growth and Longevity
“Family means everything to me, my country, my adopted country, my wife, children and relatives — and my Tratos family” Dr Maurizio Bragagni
By Dr Maurizio Bragagni
Every business model has its strengths and weaknesses. Family businesses have always made up a significant proportion of the commercial landscape in the UK. One of the oldest, Mornflake, is still keeping it in the family which founded it — in 1675.
Family run businesses are, by design, built for endurance rather than speed. They are the marathon runners of the commercial world, an attribute that is down to their constant planning for ‘the long game’ — in order to pass on the business to those who will follow.
If you think of some of today’s stand-out long-established businesses, most of them were started as family concerns and many remained that way. Mine is a family business — but the business embraces a wider Tratos family; the colleagues from outside the family, that we are fortunate enough to have on our team, and it has a majority of female shareholders.
Tend to the people, and they will tend to the business — John Maxwell
The success of family businesses is measured by their ability to involve and engage siblings, spouses and offspring so that they take responsibility, commit, deliver genuine value — are valued — and share in the gains. One of the most intelligent things a family business can do is organise its people — all of its people — well.
A well-integrated family team has huge advantages in terms of solidarity and shared vision and these companies usually outperform more traditionally structured businesses over the years as they build for a shared legacy.
Family-led businesses are often forward thinking and behind the success of some of the most well known brands. Look at premier chocolate maker Perugina from Sansepolcro in Tuscany and founded by Italian Business woman Luisa Spagnoli; or pasta maker Buitoni, from my own home town (both now owned by Nestle). Both built successful businesses with strong values with particular focus on social responsibility and innovation.
The senior team within family organisations is generally more stable, which provides security for customers and suppliers as well as non-family work colleagues, however family businesses are often less willing — or even able — to take risks.
Some of the disadvantages are meaningful, but not without their solutions.
Clever family business leaders sign-up to a meritocracy for non-family members in the business and ensure that relatives in key positions are up to the job and that their being appointed to the post would pass an interview-based selection — you can’t inherit respect, it has to be earned.
A Lot Of People Have Gone Further Than They Thought They Could Because Someone Else Thought They Could — Zig Ziglar
Consequently understanding the business, from the ground up, is even more important for family in the workforce, both for their own learning and for the confidence of colleagues around them. In addition to starting at the bottom and working their way up, younger members entering their families’ businesses are wise to ensure they acquire the right qualifications.
Leadership is not a job title; it works when there is genuine flair accompanied by colleagues’ trust and acknowledgement of equal-handedness.
Innovation distinguishes between a leader and a follower — Steve Jobs
Leaders who inspire loyalty and hold on to good people create an environment where everyone is fully invested in a business — and that is very much like a family. Ideally those from the family and outside it will sit around a table where everyone has something of value to offer.
Long standing family businesses are good at weathering the storm: they’ve seen a few in their time. Right now growth is slower and change appears to be the thing that is defining everything, from changes to the earth we share to, for some, seismic shifts in trading partnerships.
The Fourth Industrial Revolution is here and it isn’t for the faint hearted — it is bringing change and counter-change is the route to survival and, beyond that, success.
Again people are the key. People expect to work in an environment that inspires. They want to be proud of the work they do, the way the company does business and the footprint it leaves as it makes its way through the world. Family businesses have an advantage here. They are often nimble enough to have a shorter decision-making process, so can act faster. They will also, generally, have a value culture which is shared. Often this is pointed towards doing good and helping people. These features have a commercial value — people want to stay with a company they love and are proud of — and be a part of change for good.
Investing in your people’s aspirations is time and money well spent. So is fostering a culture of innovation. For any company that can be a brave step — because not all innovation works. But a culture that welcomes fresh thinking and looks on mistakes as something as necessary as breaking a few eggs to make an omelette — well that is the kind of company that will make its people want to work harder and be the best they can be.
I am proud of my family and the company it has built — and I am excited by the prospect of what more we can do.