Family businesses perform better than other companies because they are managed in a more informal way.
Managers more often make decisions based on experience and intuition. As a result, family-owned companies fare better financially and innovatively. According to research, the sometimes-portrayed image that family businesses are unprofessionally managed is incorrect.
Better performance
According to the researchers, this is the first time that it has been scientifically established why family businesses perform better. For example, they design their sustainability policy on the basis of discussions with their surroundings instead of according to fixed sustainability guidelines. Or family businesses do not use quotas to achieve diversity but pursue this goal in a somewhat looser way.
The super booster of family businesses is determined by factors that are not written down, that you do not learn in education and cannot measure to three decimal places, according to researchers at the Erasmus Centre for Family Business. He points, for example, to the personal motives and convictions that are often found in a family business. It is precisely these elements that can help companies solve staff shortages.
Shared experience
A characteristic of young generations is that they are looking for a shared experience in a company. When retaining staff, which is currently the main problem, it helps to have such a driving force. Companies can focus more on this when recruiting. At the moment, employees sometimes only find out when they are already in the company.
Danger
An increasingly common danger for family businesses is interest from outside investors. Make sure that the money they invest, they want to see something in return and come up with goals that have to be met, for example. This can jeopardise the informal way of running the business and thus its success. In such cases, stick to the basics, is the advice.
Another danger is the appointment of a director from outside the family. This person may start to lead in a more formal way, reducing the strength of the family business after a few years.
Author
Fred de Boer, Senior Management Consultant at PUM
