To understand what factors contribute to their resilience, EY worked with Kennesaw State University’s Cox Family Enterprise Center to survey some of the world’s largest family businesses and published the results in Staying power: how do family businesses create lasting success? Then, we invited a panel of prominent Canadian family business leaders to share their insights.
Succession
Our panelists reported that succession planning is their No. 1 issue. For some, early conversations have helped them to prepare for the unexpected. Participants without a clear approach to succession shared that advisory board members and shareholders often become concerned if there’s no clear plan in place. All agreed that when it comes to succession, it’s better to start preparing sooner rather than later.
Women in leadership
With three of our four panelists being women, it’s clear that women are stepping up to lead family businesses. Our participants agreed that it’s critical to have a clear vision for future leadership, as well as a well-laid-out plan that empowers women to excel in executive roles.
Governance
Our panelists found that advisory boards can offer helpful insights around succession planning and help tackle macro issues that may become muddled in day-to-day operations. The group agreed that setting up regular board meetings with a clear agenda can dramatically help facilitate the governance process.
Healthy communication
Maintaining open communication in any family business is essential to keeping the peace. Our panelists advised that having multiple touch points with cross-functional teams is essential to establish clear distinctions between roles and responsibilities. Family business leaders who effectively manage conflict are those most likely to survive — and thrive.
Branding
Family business branding can be a great way to position a business as the by-product of cohesiveness. For some of our panelists, branding as a family business has allowed them to be proud of what they’ve built — to identify with the company and believe it’s essential to defining their family. Others found that it has deterred their growth efforts. So instead, they’ve focused on building brand credibility and competence in their industry.
Sustainability
For family business leaders, giving back to the community is important for maintaining cohesiveness and creating a purpose-led organization. Many agreed that it creates shareholder value, provides cost savings derived from limiting waste, initiates growth through innovation, enables better risk management and drives stronger brand reputation.
Cybersecurity
Cyber risk is quickly becoming a priority for family businesses. Our panel indicated that having proper controls, reporting channels, and segregation of duties and signing powers are great ways to help combat the risk. Accepting that the threat of cyber attack or fraud is always present can help combat these emerging threats.
http://www.forbes.com/sites/ey/2015/11/24/maintaining-the-entrepreneurial-spirit-in-a-family-business/
