Surprisingly, some family businesses do not see the value in communicating about their history, their values and their long-term vision as owners of a company. Of course, it is easier not to put the family’s reputation on the line. But that also means missing out on the advantages that come with it.
In today’s increasingly uncertain business environment, more and more corporations have become faceless entities with few authentic role models, inadequate societal and ethical benchmarks, and shorter CEO tenures. Family businesses are in a unique position to differentiate themselves by building their own brands. When family business owners publicly declare their commitment to support a family business in the long run, the brand gains the credibility and trust that is necessary to build loyalty among both internal and external stakeholders.
Getting the family involved – the powerful double benefit
Family Business Owners looking to avoid the mistake of staying in the background often have questions about how to do it effectively.
Research has shown how positioning the family business strategically as family-controlled has a positive impact and helps strengthen the family as well as the business identity.
Numerous examples exist of how new-generation family business leaders get it right: The German industry giant Henkel strengthened support for the company through a massive company-wide dialog with its different stakeholders about the company values; the Filipino conglomerate Ayala successfully widened its business model based on the family values and goals; and the Dutch brewer Bavaria created a new product in the 7th generation for the first time carrying the family name that beer drinkers have come to love.
While these examples are taken from widely different companies, there are common approaches in how these companies used their family brand to enhance their company’s strategic position:
- Align the family: Involve the whole family to review the mission and big picture strategies
- Confirm common values: Explore how core family business values – integrity, long-term vision and trust – can be infused into the family business model
- Leverage the family background: Integrate the family name and history across the family business as it can signal quality and trust, attract capital and bring unique new opportunities to the company
- Communicate the family’s involvement: Proactively manage the family business owner’s visibility and communicate their values and ideas, champion cohesion and nurture a sense of belonging – inside the business, the family and to the public at large
Overall, combining a clear sense of shared values with open and honest communication by family members has the power to create an authentic and emotional relationship to stakeholders and at the same time unite the family behind the business.
( All factual and statistical information presented in this blog has been obtained from an extract of an article from IMD.org) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt
At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on [email protected].