What Every Company Could Learn from the Family Business

What Every Company Could Learn from the Family Business

Why you should care

Because sometimes the best business lessons come from the most surprising places.

Going into business with family members is dangerous: You stand to lose not just your shirt, but also your relationship with some of your nearest and dearest.

But businesses that don’t fall under the family-run rubric could learn a thing or two from some large-scale, mom-and-pop firms that really are run by mom and pop. It turns out that families that can make a business venture work have a leg up on the non-familial businesses of the world.

We’re not talking corner stores here, but rather major firms with at least 50 employees and millions of dollars on the balance sheets. Think of a business along the lines of Mars Inc. , which manufactures those tasty M&Ms along with a host of other famous brands (Pedigree dog food, Wrigley gum…). The firm doesn’t list its corporate board members online, but it does have several women in high leadership positions.

A survey of such companies found that 80 percent of the family-owned businesses in the study had at least one woman on its board of directors, according to the study out of the Imperial College of London . That’s far greater diversity than most corporate boards.

That diversity matters to the bottom line, researchers found. These family firms had:

That diversity matters to the bottom line, researchers found. These family firms had:

  • Less conflict among board members.
  • Less turnover.
  • More frugality with spending the company’s hard-earned cash.

“Family-orientated goals such as preserving unity, wealth and providing employment for family members may also contribute to their survival,” the researchers found.

A little more “all for one, one for all” and a little less “me, me, me,” it would seem.

Not everyone wants to make a deal with their siblings, parents or cousins. But even if you’re starting out with virtual strangers, it may be worth taking a look at how the family-business model functions — and applying some of those lessons in diversity, togetherness and frugality to your own venture.

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