At CMG, we recognize the current economic challenges faced by Canada’s prominent business families and the cohort of business families around the world – mainly due to the COVID pandemic, inflation and rising interest rates.
It’s why a recent article published by the Financial Times caught our eye; revealing how many business families are bouncing back and ‘enduring success over the generations.’
Globally, these business families have emphasized that resilience, creating value, and planning for the long-term have helped them push through challenging times; according to research by the Harvard Business Review.
Three things in particular, stood out to us in the article:
- A focus on strong governance structure. Many successful business families practice governance with transparency, accountability and strategic planning – breeding confidence, stability and alignment with shareholders (and professional management). This plays a vital role in their long-term success and has helped them to improve the company’s culture.
- Commitment to the long-term. These business families continue to innovate and adapt, making crucial structural changes on the fly. When planning for the future, their thinking is “generations rather than quarters, or megacycles rather than passing fads.”
- A strong corporate ethos. Business families focus on strengthening their values ensuring they reflect the founders’ legacies; helping to develop a strong corporate culture, make better business decisions; and help attract and retain talented employees (who align with their values).
Moreover, business families continue to prove their resilience through various initiatives, including:
- Fewer layoffs and a keen attention to controlling costs: According to a 2021 KPMG study, business families laid off less employees during the COVID pandemic (8.6 per cent), in compared to other companies (10.2 per cent). Research also found that nearly 60 per cent family-owned companies reduced their expenses.
- Standing out in competing for talent: “We cannot attract the people who want to work like they do in the private equity world to make their lifetime wealth in five years. Those people do not come and work for us, but we have relatively attractive terms. We have great values [and] we have a lot of fun,” says Søren Thorup Sørensen (Chief Executive of Kirkbi, a family-owned holding and investment company that controls the Lego brand).
Business families ultimately have the competitive advantage to survive and thrive during any crisis. They continue to follow the strong values of their founders which has interned developed longevity and helped the next generation leverage their abilities to have an even better chance of succeeding – for years to come.
You can read the full Financial Times article here.
Christina Outridge is a Marketing and Communication Specialist at Creaghan McConnell Group.