“Far from declining, family firms will remain an important feature of global capitalism for the foreseeable future, argues Adrian Wooldridge.“
So begins a recent special report on family businesses published by The Economist.
The introduction to this report recalls the “starring role“ family companies have played in the development of capitalism, citing the inherent advantage of the “two most important ingredients of growth, trust and loyalty,“ and instrumental families we all recognize: the Rothschilds, Fords, and Versaces to name a few.
Recognizing that this kind of historic and economic impact of major family companies has been well documented, the report makes the case that the influence and impact of family companies is still one of the most important forces for economic growth around the world today. The Economist seems to agree with a concept David Landes first laid out in his book, Dynasties, asserting: “You could write a respectable history of capitalism through the lens of family histories. You could write an equally respectable survey of the state of modern capitalism by telling the story of a dozen family firms.“
Further, the Economist writes:
“This special report will argue that family companies are likely to remain a significant feature of global capitalism for the foreseeable future, thanks to a combination of two factors. Family companies in general are getting better at managing themselves: they are learning how to minimise their weaknesses while capitalising on their strengths. At the same time the centre of the modern economy is shifting to parts of the world—most notably Asia—where family companies remain dominant.“
Why is this significant for the families and businesses we serve here at Family Business Matters?
We want to help your family business continue to grow and succeed in the modern economy. We want to help you maximize your family business’ strengths and reduce your company’s weaknesses.
As the introduction of the report concludes, a greater understanding of family companies’ internal dynamics is needed by business analysts and family companies themselves “need to look more closely at things like succession planning.“
If you’re one of the many families that needs a succession plan or other adjustments to remain competitive and successful in the modern global economy, we can help.
When it comes to the internal dynamics of family businesses — of those that thrive and those that fail — we know a thing or two. We’ve guided more than 450 family businesses all around the world through nearly every imaginable family business concern, and we bring that unmatched expertise to each of the families and businesses we serve today. If your company needs a succession plan or could use a guide through any transition or challenge, we can help.
This is the first post in a new series on our blog that will examine elements of this special report published by The Economist. We’ll unpack the top findings and tips that your family business needs to know and help you navigate what it means for you and your company. Be sure to connect with us on LinkedIn, Twitter, or Facebook to be the first to know when subsequent posts in this series are published.