Soriano: Family business trends-A A +A
Tuesday, October 11, 2011
MODERN family-owned businesses are no longer fitly described by the old "Mom and Pop" colloquialism. The economic landscape of most nations remains dominated by family firms; therefore, it is fitting that the academe has to recognize the importance of family business studies.
In a recent talk I did about family business, journalists who covered the event asked questions such as, "So, what's new in the world of family-owned enterprise?" and "What trends do you see?"
Studies at the group level have added to our knowledge on two of the most pervasive problems in family businesses: Conflict (e.g., Boles, 1996; Drozdow, 1998; Habbershon & Astrachan, 1996; Kaye, 1996; Kellermanns & Eddleston, 2002; Sorenson, 1999) and Succession (e.g., Cadieux, Lorrain, & Hugron, 2002; Davis & Harveston, 1998; Harveston, Davis, & Lynden, 1997; Miller, Steier, & LeBreton-Miller, 2003; Morris, Williams, Allen, & Avila, 1997).
However, although conflict and succession issues are now the current problems that must be resolved, there are other trends happening in the world of family businesses that are worth looking into.
Trend: Family business management is becoming a team effort.
The next-generation family-business leadership rests with a team.
Given the characteristic family desire for equal treatment of children, perhaps it is not surprising that team management receives a friendly reception in family business. What's new is the notion that installing a successor team can be an appropriate approach rather than an expedient way of avoiding conflict.
The Arthur Andersen/MassMutual Family Business Survey '97 showed that 42 percent of family firms are considering co-presidents for the next generation.
Even when one family member is selected as business leader, other family members in the business will likely act as members of the business leadership team. The challenge is to assure that appropriately selected family management teams are properly developed and structured so that they can function effectively.
Trend: Couples now favor joint entrepreneurial ventures instead of jobs.
In her 2006 book "Couplepreneurs: Prosperity Through Partnership," business coach and entrepreneur Jean R. Charles writes that "the fastest-growing family owned businesses today are new businesses started by couples who jointly share ownership, commitment, and responsibility."
"Couplepreneurs" or "copreneurs" are quickly becoming buzz words in the family-owned business world, referring to partnerships between spouses.
Blurring the lines between work and play, the boom of the business couple is re-inventing the workplace, requiring today's power duo to be both business and relationship savvy at the same time.
Trend: The spouse is the family owned businesses’ most trusted adviser.
In 2002, the business accountant ranked at the top of the list. However, in the American Family Business Survey conducted by MassMutual and the Family Firm Institute in 2007, the typical family business owner designates his or her spouse as most trusted advisor, above family members like parents or siblings as well as other important partners like the lawyer, banker or non-related colleague. Perhaps the rise of the family owned businesses explain the shift in survey results.
Trend: Women-owned businesses continue to increase.
Kathy Marshack, psychologist and author of "Entrepreneurial Couples: Making It Work at Work and at Home," points out that female-owned businesses skyrocketed 42.3 percent between 1997 and 2006 and keep growing.
In 2003, MassMutual and the Center for Women's Leadership at Babson College produced the “Women In Family-Owned Business Report,” determining that female-led family owned businesses were more productive and successful than male-owned firms in that category.
Trend: Old-fashioned gender roles are now being tossed out the window.
Shared responsibility does more than benefit a business's bottom line; when both spouses feel equally valued, respected, and compensated for their contributions to the family's financial success, it improves household harmony. As the “Women in Family Owned Business Report” says, gender inequality within the family-owned business world can cost a business not only its productivity but the loyalty and satisfaction of its employees as well. On the other hand, research shows that divorce is the quickest way to dissolve a family-owned business; thus, most partnerships simply cannot survive separation.
Trend: The family owned businesses are more customizable than ever.
As Generation Y enters the workplace in full force, small business trends are progressively evolving to reflect the young blood, which is "re-writing the rules" for family-owned businesses.
Today's budding entrepreneurs were raised in the age of customizable products and services, making them less likely to subscribe to the rigid one size fits all business models of their predecessors and more likely to create practices and strategies unique to their specific needs and goals.
Communication technology characteristically embraced by Gen Y like smart phones, web conferencing, and social networking allows couples to work at home or on the road, meaning more time together and with the kids, as well as the opportunity to vacation together or even to cultivate a permanent lifestyle of work and travel.
There's no doubt about it, the "copreneur" spirit is taking the family-owned businesses world by storm and changing the rules. Who knows? Before long, shrewd executives looking to scope out competition may be skimming newspaper wedding pages without consulting the business section at all!
Published in the Sun.Star Cagayan de Oro newspaper on October 12, 2011.