Family businesses energised by politics and conflict

Family businesses are proving increasingly successful despite high levels of behind-the-scenes conflict, politics and competition, according to researchers at Regent’s University London.

One hundred Regent’s students and graduates currently working in, or aspiring to become part of, a family business were surveyed to help identify consistent themes, challenges and concerns.

Regent's 'Developing Distinctive Leaders' (DDL) Programme Director, Dr Dena Michelli, explains:

“Family enterprises account for two-thirds of all businesses in the world. They are responsible for up to 80% of jobs in most countries, and generate an estimated 70-90% of GDP globally.

“Despite this success, less than a third of family-owned businesses survive after transferring to a second generation. We surveyed people working in industries as far afield as hospitality, logistics, retail, banking and manufacturing, and their problems were predominantly the same the world over.

“Navigating family pressures, which can influence everything from day-to-day operations through to boardroom decision-making, requires specialist knowledge and skills that are crucial in overcoming emotional and practical obstacles to long-term business success.”

Highlighting their biggest challenges and concerns, examples of family business heads and those working in second-generation position responses included:

  • “Dealing with the cultural differences between where I grew up (UK), and where my business is (Japan). Business practices are different, my views and my relatives' views are different. A lot of children of family businesses are educated abroad. Blending into the home culture is quite hard.”
  • “Reaching an agreement with all members of the board (family members) and explaining/convincing the first generation that new technologies can be helpful.”
  • “Carrying the baton forward, managing the wealth, and growing and sustaining it, because when the first generation of family got into business the environment was different…”
  • “Contending with other family members and shareholders who do not have an active role within the company…”

Dr Michelli continues: “Family tensions and leadership succession are increasingly significant issues for many businesses. Building appropriate skills rapidly and credibly demands a focused-learning agenda based on international knowledge and experience.”

To find out more about the ‘Developing Distinctive Leaders - Growing and Sustaining Family Businesses programme,’ visit www.regents.ac.uk/leaders , or email leaders@regents.ac.uk