Making the Family Business

What is a family business? The small mom and pop store at the end of the street, you know the types. That’s the normal thought when people think about family businesses, but how about companies like Wal-Mart? A $400bn+ revenue per year company. Founded by Sam Walton in the 1960’s and whose eldest son, Robson, is the current chairman of the board. In fact some statistics state that approximately 35% of Fortune 500 companies are family-controlled and that family businesses account for 50% of U.S. gross domestic product and employ the bulk of the US work force. However, only one third of family businesses make it passed the second generation.

It is these types’ statistics that make family businesses such an interesting proposition. But what makes that “one third” of them so successful?

1. Passion

“When work, commitment, and pleasure all become one and you reach that deep well where passion lives, nothing is impossible” – Unknown

The enthusiasm that family business owners bring to their business, the extreme attention to the tiniest of details or the out of the box thinking; are all signs of the passion that the family business owner portrays. After all, in most cases, there’s no fall back for them, so the choices they have to make are the ones that they’ve created themselves.

This passion is not to be confused with good leadership. One does not necessarily lead to the other but when combined effectively can be tremendously rewarding.

2. Commitment

“There’s a difference between interest and commitment. When you’re interested in doing something, you do it only when circumstance permit. When you’re committed to something, you accept no excuses, only results” – Unknown

Often, the family business members commit everything to their venture. After all, it’s not just them but the other family members who are relying on their success and if it doesn’t work its all the family that will feel the consequences. This factor is a large driver of the first generation family members of the business. Unfortunately the second generations sometimes don’t feel like they have a choice about joining the firm or they take it for granted and the level of commitment drops significantly.

3. Pride

“Pride is a personal commitment. It is an attitude which separates excellence from mediocrity” – Unknown

One of the success factors of a family business attention to detail and adherence to high quality standards; this translates into great products or high levels of service which is often the differentiating factor between a family business and their nearest competitor. This pride in their achievement often leads to a specific organizational culture of the same high standards, and as the business grows this kind of culture gets ingrained and gives the family business the edge.

There are, no doubt, other reasons why specific family businesses become a success, but passion, commitment and pride will be three factors that have the potential to make a real difference.