Family Businesses – the advantages of the next generation.
Family businesses, small business, closely held business all have some advantages over larger corporations. In a recent Industry Week post Thomas Tan listed these four:
· Owner managers believe that they are stewards of the family enterprise and hence have a longer time horizon than most investors. This perspective enables them to avoid making decisions for the sake of short term gains at the risk of long term. Family-owned businesses also enjoy the benefit of the founder’s drive, nimbleness and vision.
· Customer relationships and satisfaction are important for any business’s success, but successful family owned businesses take it to the next level by connecting with the customers they deal with, emphasizing the community and accentuating the personal touch. The founders/managers make sure every aspect of their company reflects those values. These messages resonate well with customers who tend to connect family run businesses with history, tradition, and reputation. This provides a huge competitive edge for family-run businesses in a competitive market place.
· Family-run businesses also tend to have a higher level of trust and commitment to their employees because managers, who happen to be owners as well, tend to see their company as an extended family. As a result, these businesses enjoy low employee churn and a high degree of loyalty.
· Family businesses have a larger repository of knowledge and experience passed down over time from previous generations of owner managers and a stable employee base that most companies often cannot match.
Successful Family Businesses transition, they change and leverage the next generations knowledge and experience. Many times part of this transition is technology. There are 3 million Family businesses is the US. They represent 29% of the gross domestic product and 27% of the workforce, according to Business Week and these stats exclude farms and sole proprietorships.
The next generations of family leaders are leveraging technology; in article Tan lists these themes:
• Switch from running their business on spreadsheets to an enterprise business system to streamline their company’s operations, eliminate inefficiencies and reduce costs to make it even more competitive.
• Implement technology that provides business intelligence and insights, so they can identify issues faster and can proactively address them, and they can identify opportunities so they can rapidly capitalize on them.
• Combine social media, internet/mobile marketing with traditional personal relationships to increase their reach to existing and prospective customers without sacrificing the personal touch. NASCAR is a good example of a business that has taken their technology based products and marketing to the next level with the next generation of management.
• Implement mobile technology to make information available anywhere and anytime to accelerate decision making and become more customer responsive.
• Expand and deploy underlying business and information systems to support this expansion.
• Add an internet-enabled business model, especially in areas such as supplier collaboration, ecommerce and supply management
The G3 step up and step it up. They focus on getting better. They are unsatisfied with the past success; they want the Team to be more aggressive, offer better customer service. They work diligently to improve their game and the Team’s edge.
The next generation has grit, they are committed. This commitment is to preserve the legacy, persevere and challenge wanting better. Finally, they bring technology, alligator blood and stay with it till we win.
All the runners in the race compete, yet only one wins-Run to win!