What Every Company Could Learn from the Family Business - OZY | A Modern Media Company

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. 

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. 

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: 

“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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