“There is no doubt that it is around the family and the home that all the greatest virtues, the most dominating virtues of human, are created, strengthened and maintained.”
Winston Churchill was onto something.
In Australia, family businesses play a vital role in our country’s economy, contributing to job creation, talent development and innovation. They account for around 70% of all Australian businesses, employing a massive 50% of the workforce.
But while they might start small, let’s get one thing straight: a family business does not mean a small business.
Globally, some of big names are family owned: Mars, De’Longhi, Hermes and Lego Group to name but a few. In Australia too, many of our largest, most enduring companies started off as family businesses. Consider Coopers Brewery, Akubra Hats, Haigh’s Chocolates, Myers, Ugg Australia, Bundaberg Brewed Drinks, Kennards Hire, Speedo — and right here at Matthews.
Some of these much-loved names have been handed down from generation to generation, and remain family owned today.
So what is it that sets family businesses apart from the rest? What makes them a role model for many companies? For the answer, we can look to one of the twentieth century’s most remarkable and pioneering men, William Hewlett.
Back in 1990, the late co-founder of Hewlett-Packard talked about his proudest moment in business.
Was it the invention of groundbreaking computing technology?
Perhaps building what is now the world’s largest technology company?
Here’s what he said: “As I look back on my life’s work, I’m probably most proud of having helped create a company that by virtue of its values, practices and success, has had a tremendous impact on the way companies are managed around the world. And I am particularly proud that I am leaving behind an organisation that can live as a role model long after I am gone.”
He’s talking about values.
For many family firms, strong values are what see them through the high and lows of business. We’re not talking about the same values that most companies have, these are very specific family values. In a recent survey by the IESE Business School in Spain, generosity, humility, communication and service came out as top values for family companies.
The firm’s commitment to these values is pushed internally with staff and celebrated externally with customers. “Only the best is good enough” has been the Lego Group’s motto since it was established in the 1930s and the family continues to advocate this today.
In sickness and in health
But it isn’t only their focus on the human aspect of business that sets family firms apart.
According to the CEO of Family Business Australia, Philippa Taylor, another defining characteristic of family business is the intention to “endure”. Resilience and a huge survival instinct are two qualities driving a family business. As a result, they have an innate ability to grow against the odds, as many found out during the GFC.
The most successful family firms have always adapted to new realities, reinventing themselves in times of change. They are acutely aware of the challenges they face — whether it’s global competition, a war-time economy or the GFC. Often they see the “new normal” as an opportunity — a global economy is a source of new customers and markets, as well as competition.
Outside the box
It follows, then, that innovation is another big driver for family firms. The older generation listens to the next generation, leading to a new way of thinking and perhaps a new direction for the business. Haigh’s Chocolates is a great example of this. When John Haigh joined the business in 1946, he had a vision to take the business to new heights and introduced a revolutionary new way to manufacture the chocolate.
Pass it on
“It’s not mine to sell, it’s mine to pass on.”
Family businesses have a focus on creating value for future generations rather than turning a quick profit. This is perhaps what makes family business especially important to the Australian economy.
Matthews is passionate about family business; we are a family business ourselves and so we understand what makes a family-run business different. We’re also a proud member of Family Business Australia, the peak body for family business in Australia
Tell us what you think: Do you see family businesses as a role model? What do you think companies can learn from a family business?
You may also find this blog on the secret to building a successful family business interesting. And did you know that September 19 is marking National Family Business Day in Australia?