Keeping it in the Family – The Unique Dynamic of Family Businesses
According to the Conway Center for Family Business, more than 30% of all family-owned businesses survive into the second generation, with only 12% still viable into the third generation. What obstacles must family businesses overcome in order to beat the odds? In addition to the traditional challenges businesses face, family businesses struggle with the question of balance. Balancing work and family dynamics, balancing external input with family control, balancing day to day activity with the preparation of a sound succession plan – and the list goes on.
As the above statistic shows, life that combines personal relationships with professional decision making isn’t for everyone. But when executed correctly, can reap great benefits. Family businesses stand out in their success for a number of reasons:
- Talent Retention: Only 9% of family businesses work forces turned over annually versus 11% at non-family firms, according to a Harvard Business Review study. They create a culture of commitment and purpose, promoting within and investing in people.
- Women in Family Business: It is no argument that women remain vastly underrepresented in leadership roles across the global marketplace. However, a survey conducted by Quartz at Work saw a 20% increase in the number of women in the c-suite of family businesses since their 2014 study.
- Long-term Thinking: Legacy is at the forefront of family firms – and an integral part of preserving a legacy is long-term strategic planning. Longer tenured CEOS, detailed succession planning, and cross-generational consideration allow for sustained health, and ultimately greater wealth for a business.
The IEE’s member community is largely comprised of family businesses in the Pittsburgh region. In response to the complexity and evolving nature of family business, the IEE hosts an annual Family Business Day with panelists, round table discussions, and a keynote address. Click here to learn about the upcoming event to be held on April 17, 2018.