Whilst I was drafting this post – a number of stories crossed my newsfeed of owners of family businesses expressing their desire to hold on to their independence and with it financial vulnerability as well as the intense vulnerability experienced whilst leading their organisation. And yes, I believe if we look closely exactly that may be their superpower.
Big corporates always like a best practice to copy. Often they look at the other major players. Maybe it is time to look at the family-owned businesses if we start to shift away from short-term financial profit as the single measure of success and have to build cultures with leadership that creates trust, binds employees, and at the same time enables innovation, disruption, creation.
“We posit that compared to their non-family peers, the likely elevated levels of vulnerability felt by many family firm owners and managers will engender richer and more rewarding social exchanges with those stakeholders”
Hayward M, et. al., Journal of Family Business, 2022 (full source below)
A couple of newly published journal articles in the Journal of Family Business have dug into these topics in family-owned businesses. Here’s what I take-away from them. Family-owned businesses build trust and an excellent attrition of their employees (even binding family members over generations) due to the following:
- The vulnerability and acute sense of responsibility family-owned business owners feel on a daily basis.
- Truly caring for their employees and hence offering a safe internal culture that develops along with needs.
- Their independence from shareholders and the ability to look at the long-term returns versus quarterly balance sheets.
The two papers are different in style – one looking at one family-owned firm as a case study and another looking at a model based on social exchange theory. Yet, their findings support each other, and also support what was shared in the book published by family-business owner Antje von Dewitz, Vaude, which I wrote about here (in German).
“According to employee statements, whether long- established members of the executive team or new employees, they refer to the importance of the family firm’s long-term orientation enabling enduring employment and innovation for generations.”
Rondi E, et al. Journal of Family Business, 2022 (full source below)
This what I take from this research.
As a family-business owner, I can only imagine that intense sense of vulnerability of being in service to the idea, the employees, the customers, the local community. From this research and the work in daring leadership, which explains how vulnerability is our most accurate measure of courage, I invite you to lean in to this discomfort of vulnerability to use it as your superpower – learn all the skills to have courage as well as boundaries, self-compassion as tools to look after yourself.
If I was a startup building my culture – I would be looking at these type of businesses rather than trying to be like the big corporates, the next unicorn. Some really interesting work into this field is being led by the New Mittelstand movement in Germany, which I can only recommend investigating.
And for the big corporates – this only adds another data point to support the need for a change in leadership, culture and strategy. We have to revisit the detachment of business leaders from the pulsing heart of the business. This can only be done if we change our definition of business success away from short-term financial profits, away from strategy based on competitive advantage and succeeding on business metrics to instead looking to provide products, services, solutions that contribute to people, planet and profit.
Source:
One for all, all for one: A mutual gains perspective on HRM and innovation management practices in family firms. Emanuela Rondi, Ruth Überbacher, Leopold von Schlenk-Barnsdorf, Alfredo De Massis and Marcel Hülsbeck. Journal of Family Business Strategy 13 (2022) 100394
How vulnerability enriches family firm relationships: A social exchange perspective. Mathew Hayward, Richard Hunt, Danny Miller. Journal of Family Business Strategy 13 (2022) 100450
amdeans-consulting.com 