Panellists at the Precious People Business Forum in Manchester have unanimously affirmed that a family’s business culture is a major competitive advantage in the global marketplace; hence, they urged African family businesses to strategically position globally by creating their own growth path based on cultures and values, FinIntell reports.
Speaking at the event, Nathaniel Ogundipe and Bosede Ogundipe, conveners of the business forum, themed,‘Family Business and Cultural Values,’ emphasised the importance of how African family businesses must balance tradition with innovation to create legacies in today’s contemporary environment and a successful business that spans generations.
Mr. Ogundipe said the forum was put together to foster discussions that would demonstrate the important link between legacies and long-term business performance, which can help to guide African family businesses who want to keep their legacies on a future-forward path.
Global Family Business Index
The EY and University of St. Gallen’s Global Family Business Index released two years ago revealed that the largest 500 family businesses are growing faster than the global economy –at nearly twice the rate of advanced economies and around 1.5 times the rate of emerging market and developing economies. They collectively generate US$8.02 trillion in revenue and employ 24.5 million people worldwide.
The Index, which is a ranking by revenue and issued every two years, reported that almost half of all the global family businesses are based in Europe. North America is host to 30% of family businesses, and Asia-Pacific has 16% of family businesses in the Index. It also showed that the number of businesses from Asia-Pacific has constantly risen since the Index was first published in 2015, from 61 companies to 79 over this period.
The consumer sector remains the largest sector (37.4%), but Advanced Manufacturing and Mobility has increased its presence on the Index this year to 28.6%. Nineteen percent of family businesses have a family member under 40 years on the board, while women hold 23% of board seats. Seventy-six percent of companies in the Index are older than 50 years and almost one-third (30.8%) are over 100 years old.
Longevity and stability continue to be a characteristic of the companies listed in the 2023 Index.
British Family Firms
Family business is a familiar culture in the UK. The largest family firms in the UK were identified in the report as 13 British family firms made it into the Index list, demonstrating the economic power and the relevance of the UK family firms to the world.
The largest family firms in the UK listed in the Index include: Wittington Investments, Pentland Group Plc, James Dyson Ltd, Arnold Clark Automobiles Ltd, European Metal Recycling Ltd, Frasers Group Plc, JCB, Bestway Group, Westcoast (Holdings) Ltd, Laing O’Rourke Corporation Ltd, T.J. Morris Ltd, Rigby Group, and Boparan Holdings Ltd.
A commentator Paul Andrews having looked at the UK representatives listed in the Index said that “It is great to see so many British family firms continuing to be in the index, many of them household names that will be familiar to many of us. Collectively they employ over 354,000 people, have traded for over 870 years and generate turnover annually in excess of £69 billion,” adding that “these family firms individually and collectively are great examples of the importance of family firms to the UK economy in terms of their overall contribution of income generated, jobs provided and wealth created, not forgetting the significant impact they have in the communities in which they operate.”
Founder’s Vision
A couple on the panel, Oludare Odejimi and Elizabeth Odejimi, both directors of family-owned real estate company, IOI Properties Limited, said that a family’s business culture as common in developed nations is often strongly influenced by the values, style, and vision of the founder.
Mrs Odejimi added that family values are often a vital part of the business, and can be reflected in the brand’s identity and how the team works together.
Her husband buttressed the fact that family businesses are known for their strong cultures, which are often based on the founder’s values and style, adding that these values can be passed down through generations and can be a competitive advantage for the business.
Allen Vincent, a family solicitor and one of the panellists indentified some common values in family businesses to include: caring, loyalty, humility, deep commitment to community, and family unity. Mr. Vincent added that storytelling has also as a powerful tool for helping a family business preserve their values through generations.
Robyn Langsford, Global and Australian Lead, KPMG Family Business and Private Clients, said in a report that, “the ability for family businesses to weave their legacy through generations is powerful as they pass down experiences, values and knowledge. Then it’s up to the next generation to leave their own mark by exploring new ideas that will take their legacy to another level.”
Tips to Note
Highlighting some ways that family business culture can be of importance, the panel said:
- Competitive advantage –A strong culture can help a family business attract investments.
- Shared purpose –A strong culture can provide a backbone for a collective purpose, and help employees feel a sense of what the business stands for.
- Decision making –Family values can directly affect decision making, and how the company treats its customers and suppliers.
- Community relations –Family business culture can affect the company’s community relations.
- Employee morale –Family business culture can affect employee morale.
Below are more ways to embed family values into a family business’s culture as highlighted at the event:
- Lead by example –Demonstrate the values you want to promote.
- Communicate openly –Encourage open discussion and collaboration.
- Align actions with values –Make sure your actions reflect the values you want to promote.
- Hold regular meetings –Create opportunities for family members to come together and discuss the business.
- Reinforce values –Periodically review and reaffirm the family’s values.
A strong family business culture can:
- Create a sense of purpose –When everyone shares the same values, it can create a sense of unity and purpose.
- Attract and retain talent –A strong culture can help a business attract and retain the best talent.
- Foster loyalty –A strong culture can help create a loyal and stable workforce.
