Rejoice, family businesses. Rejoice!

by Gale Martin, Director of Marketing and Member Relations, S. Dale High Center for Family Business

I previously reported on reading the book Managing for the Long Run just as the Generation Next affinity group at the S. Dale High Center began a study of it lasting several months. You can read that post here.

Recently we discussed the final chapter of the book, in which authors Danny Miller and Isabell Le Breton-Miller make the following recommendation (and I quote):

"So if you are a manager of a private or family business, rejoice! You may have at your disposal levers of competitive advantage that most of your rivals will find it hard to access (p. 209)."

These levers were discussed in detail with industry examples in the preceding 208 pages but are also reviewed in the concluding chapter, some of which include the following:

Governance

Executives at family businesses act like stewards instead of careerists. (Substitute opportunist for careerist).  Stewards protect the long-run interests of the company and all its stakeholders as compared to short-sighted executives who put short-term gain, such as quarterly profits ahead of the communities in which they operate, devasting communities and shaking people's faith in executives and corporations.

A meaningful mission

Family business leaders rally their firms around a mission with genuine scope that
can remain relevant for decades. Missions with substance also inspire commitment, such as Hallmark's commitment to social harmony and S. E. Johnson's commitment to add real value to useful consumer products.
 

The capability to deliver more value

The authors contend that a long-term focus allows family business leaders to concentrate their attention on what needs to be done to satisfy both mission and the market. Family businesses can allocated more "skewed, intensive, and long-term resources" than non-family rivals can to bootstrap capabilities and leverage them. An important outcome of focus, say the authors, is that family firms can deliver more value that may be impossible for competitors to imitate.

The book concludes with a hit-list of recommendations tailored for family businesses worth reiterating, many of which have implications for solid and high-performing human resources:

• Nurture the tribe or take care of talented employees whose values jibe with the mission
• Understaff--this reduces the need to layoff people while giving others larger roles
• Design jobs with scope--and provide broader job descriptions to facilitate personnel development
• Develop good relationships with the community to reinforce your image of responsible citizenship

In short, this book is chock full of best practices and research-based recommendations to help long-term leaders like family business executives succeed. It also contains a little blatant cheerleading.

Who in this business climate doesn't need both good counsel and the occasional pat on the back?