Family Owned Businesses

MSN recently did a story on the largest family businesses in the world.  It is an impressive list.  I must say, I was disappointed when I started clicking through the slide show and saw how few are US based.  Spoiler alert: you will see several toward the end.

Family owned businesses generate considerable nostalgia.  We take pride in shopping at family owned businesses. In economic development, it never fails to point out the leading family owned businesses in the area. 

Why is this?  Because it is the classic American success story.  A family sees a void or has a passion and starts a business as the result.  It may grow, establish new locations and/or products. The kids are involved and will likely take over some day. Sometimes internal family battles get played out in the media and that can be riveting reading.  It may even be the subject of a mini-series or feature film.   It certainly has an almost romantic feeling to it.

Enough about that. 

The family owned businesses in this story run across the world.  They may be in the first, second, or third generation of family ownership.  Consider some of the challenges.  For example, any non-family member will likely never take the helm.  So to hire the best, you may also lose them to a firm who can offer the top seat.  Your children know what is expected and will likely be indoctrinated accordingly and likely at a young age.  Transitioning leadership to the next generation maybe tumultuous.  Current leadership maybe arrogant and refuse to listen to outside advisors (after all I built it, how can I be wrong).

When I read about these companies and the accompanying write-up, I was mightily impressed. After all, we can pick our friends, but not our family.  From my perspective, these companies instilled a company sense of values throughout the entire organization and that carried through to future generations.  The leaders of these firms navigated extremely challenging times and events.  They adjusted their business and business model when necessary and I suspect never sat on their laurels.  Rather, they spent considerable time thinking about how to maintain leadership in their respective fields and listened to outside counsel.

All of the above applies to any business. But I think family owned businesses have inherent advantages and unique challenges. The companies in this piece have successfully navigated these challenges, so far.

https://www.msn.com/en-us/news/finance-companies/the-worlds-biggest-companies-that-are-still-family-owned/ss-AAw3Wn3