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B y a l E x i s s c o B i E
It seems these days that every business is
speaking in terms of generations. The baby
boomers are beginning to retire, millennials
are becoming parents, and Generation Z is
changing the way the world uses technology.
This “generation speak” has become the
core of business strategies, the center of marketing
campaigns, and the basis on which business
leaders build their ideas about the future.
I will be the first to admit that I am a yoga-pant-wearing,
essential-oil-spraying, iPhone-loving millennial. But this generational
comparison is not the one that I have been subject to my whole
life. Instead, within my family’s business, Mason Companies Inc.,
I have always been referred to as “sixth generation.” This
title has been associated with generational comparisons, business
strategies, and much more.
While you may have never heard of Mason Companies, let me
assure you that family businesses extend far beyond the
mom-and-pop shop stereotype that they are commonly associated
with. In fact, some of the most innovative and successful
companies in the world started as family businesses, like Louis
Vuitton, Lego, Siemens, and Tata Group, while some remain
family-owned to this day, like Walmart.
Not only are some of the most innovative companies family
businesses, but family businesses also make up the majority of
businesses and provide the most jobs around the world. According
to research conducted by KPMG, family businesses account for
70–80% of the world’s GDP and for 35–70% of job generation globally.
While the “family” aspect of these businesses is often overlooked,
the principal ways in which family businesses are owned and operated
could be extended to non-family businesses as well. In today’s
modern landscape, organizations are talking about the intersections
of time, generations, and business strategy; businesses should
look to the factors that allow these organizations to innovate across
generations. Strategically, family businesses are already looking
beyond 2020 and toward the future of the next generation. This is
something that all businesses could benefit from doing.
The following are some of the factors that enable family businesses
to be more innovative than their non-family-owned counterparts.
These factors exist not despite family ownership, but because of it.
01 Dynastic Will
Since the age of 12 – that is, the age at which I was old
enough to attend my first shareholders’ meeting – I have been
taught to not only celebrate our company’s heritage, but to
continue to think ahead and plan for the next 100 years. I have
been encouraged to think about what this business could
mean for my children and even my children’s children.
The desire for a family business to continue to be owned
and operated by the same family for generations to come
is known as “dynastic will.” Because this continuity is the
primary goal of most family businesses, these organizations
are mandated to withstand the test of time. Family businesses
focus on the future, including the needs of the future
generation and the companies’ future return on investments.
This allows these businesses to think more broadly about
business strategy so that they may create strategies that go
beyond any one individual – or even one generation.
02 Mission Statement
Missions are often engrained in family business culture as
clear strategic forces for the business. Family business mission
statements are unique because they are often tied to the
values, ethics, and even religion of the family. These mission
statements are often passed down from one generation
to the next, thereby fostering the cohesion of the family and
highlighting the core competencies of the business.
The values and competencies tied to a family business’
mission statements are important to the success of that
business. Clan-like values can foster strong communities
and culture, as they encourage collaboration and innovation
among the business and the family. Multigenerational
collaboration is inherent to family business; each emerging
generation brings new ideas, opinions, technologies,
and processes to the organization, creating a natural push
for something new. Further, the strong connection between
families and the core competencies and missions of their
organizations allow family businesses to pass their experiences
and specializations from one generation to the next. Family
business leaders stand on the shoulders and knowledge
of the generations that came before them, allowing families to
become experts in their respective industries.
03 Leadership
Family businesses also tend to run differently than other
kinds of organizations. They tend to have a much more
personal and hands-on approach to operations and decision-
making. In a family business, decision-making is often
concentrated to one person, or perhaps to a few individuals.
Shareholders of family businesses tend to be less demanding,
allowing the executives to make decisions more freely.
The strategic outlook and executive tenure in family business
is also unique. The average tenure for a non-family business
CEO is six years, and during that time, CEOs typically invest and
operate only within the six-year window of their own tenure.
They are offered compensation packages that are contingent
on short-term successes and wins. In contrast, the typical
tenure for a family business CEO is 20–25 years. This not only
allows the CEO a longer period to find success, but it also
provides a longer trajectory on which to base strategy and
consider return on investments.
04 Relationships
It is often said that success in any business is all about
whom you know and how well connected you are. Family
businesses are often able to foster relationships over time,
creating strong ties between the family, the business, the
shareholders, the suppliers, and their communities. Family
business experts Danny Miller and Isabelle Le-Breton Miller
explain the importance and nature of these relationships,
stating “many great [family businesses] cherish enduring,
open-ended, mutually beneficial relationships with business
partners, customers, and the larger society. These relationships
vastly exceed the time span, scope, and potential episodic
or contractual transactions.” Strong, lasting relationships not
only lead to goodwill and happy stakeholders – they can
also pave the way for future partnerships and ventures outside
of the core business.
I can honestly say that some of these factors have allowed my
own family’s company to survive for over 100 years, and these
principals form the foundation for some of the strategies that will
move Mason Companies into the future. But, they are not
things that are or should be unique to our company.
Looking toward the future with a dynastic will, tying the business
back to its mission statement, mandating leadership with a
long-term vision, and maintaining lasting relationships are principles
that can be applied across industries and ownership structures.
Family businesses and non-family businesses alike could all benefit
from looking beyond 2020 to solve their business problems –
considering, with a strategic eye, the next generations. ////
Alexis Scobie is an innovation strategist at Idea Couture.
Why Family Businesses
Don’t Care About 2020
PHOTO:JOSHUACLAY