Family firms are the engine room of the national economy and those running them are passionate, motivated and entrepreneurial in their outlook. Family firms are also different to their non-family counterparts who may be driven by short-term financial performance, the need to stimulate growth, better shareholder returns and performance in line with monthly, quarterly and annual targets.
Financial performance of all businesses is crucial to long term sustainability but it is not uncommon to find different values permeating family firms and their strategic direction. It is not always about financial performance or profit growth. Family firms are recognised globally for their long term view, the stewardship or the custodianship of the firm for generations to come, so as part of the Family Business United 2022 National Family Business Survey, we looked into the key drivers of family businesses today.
The key drivers for UK family businesses are:
To be seen as a good employer and somewhere people want to work
To protect the business to ensure it is profitable and sustainable going forward
To manage reputation and brand
To provide and safeguard jobs in the wider community
To pass the business on to the next generation in a better state than when it was taken on
To be philanthropic and support causes that reflect our underlying family business values
To act as custodians of the business for future generations
To become sustainable environmentally and meet our net zero ambitions
To make sure the business does not fail under our watch
To create a business that attracts the next generation of family members
As Paul Andrews, Founder and CEO of Family Business United explains, “Performance over the long term is important for the sustainability of the business but for many family firms it is also about people, family and non-family alike. Family firms are driven by their leadership teams and providing the right environment for them to work together and being seen as a good employer, an employer of choice, is clearly very important to them. Many family business owners have their family name above the door too and it is not surprising that managing reputation and brand is close to the top of the drivers for them, as their name, the family and the business are so intrinsically linked.”
“Family firms are at the heart of communities the length and breadth of the country and their impact should not be under-estimated. Not only do they provide sustained employment, generate income and create wealth, locally, regionally and nationally, they are hugely important in terms of the communities in which they operate.”
“Family firms donate to local charities, support grass roots sport, provide support to different sectors of the local population, care for the environment and make a difference on so many levels. It is some of these actions that contribute to the culture of family businesses and help to attract, retain and provide opportunities for their staff too. Family businesses matter and it is no surprise that being seen as a good employer and a business that people want to work for is top of the list of drivers for those running businesses today,” concludes Paul.
As Lyn Calder, Edinburgh Managing Partner & Head of Family Businesses at AAB, sponsors of the 2022 Family Business Survey adds, “Family businesses are important in so many ways and are the very heart and soul of communities across the country. It is their values, purpose and culture that stands them apart from other organisations and becomes a great way to recruit staff for their businesses. Working with family firms we regularly have conversations about the long service of staff, many serving in excess of 20 or 30 years, and it is also common to see generation of families having worked for the same business, increasing the links between local families and local family businesses.”
“Family businesses survive for many generations too and as we have seen in the past couple of years during the pandemic, they have looked after their staff and placed staff health and wellbeing firmly on the agenda. People are what make family firms and those that have survived for generations continue to adapt and evolve over time, developing best employment practices and focusing on their brands too."
"Family firms are so important in so many ways and it is their forward-thinking, long-term approach and core values, governance and communication that help them stand the test of time. We work with some great family businesses and see the drivers identified by family business owners across the UK as important on a regular basis. They are a real point of difference and can provide significant competitive advantage to family businesses too and given the current challenges with recruiting staff, are likely to become more important as a differentiator as the war for talent continues,” concludes Lyn.