Family ownership is often considered amongst the most sustainable ownership models. And yet, despite their many strengths, research shows that family-owned companies can struggle to find the right moment to innovate and “think out of the box”.
WIFB met with expert Marijo Bos to ask her opinion on how family businesses can address the issue of innovation and what role women play in this process.
Before Marijo became an advisor and expert on talent management she was involved with her family’s multi-generation agricultural business. Today, she is a board member in various companies and organisations and works with executives around the world to create an environment to excel and meet their goals in growth and leadership.
You are part of a multi-generation family business and also have extensive experience in advising corporations on leadership development and innovation. From your observation, what are the main strengths of family-owned companies?
Family-owned businesses typically enjoy an increased sense of ownership given success impacts everyone directly. Family co-workers also benefit from a level trust that is built into knowing one another genetically, emotionally and historically. Growing up in the family agriculture business my father always told my siblings and me “The apple doesn’t fall far from the tree”. I have always seen this aspect as strength and a weakness at the same time, especially when it comes to innovation. Another strength of the family business is efficiency, given family business leaders often are able to anticipate other family members reactions and points of view. Finally, the constant on-the-job training that takes place from a very young age can be a great competitive advantage and can instil a deep knowledge of the business. Usually, the family business talk continues outside of the office and at family get-togethers, which again can both be positive and negative as work blends into personal life.
As you mentioned before, despite their strengths, family businesses face many challenges – one challenge that can be observed is the reluctance to innovate or disrupt the business process at the right time for growth. In your experience, how do family businesses traditionally innovate and how could that model be improved upon?
I have seen family businesses innovate through allowing an outside voice to have an influence and shake things up just a bit. This outside voice is often not a blood relative but someone who knows the family really well and shares a history with them. In the case of farming and agriculture, I have seen the international machinery providers or veterinarians as a disruptive voice of change. The key to innovation is to talk openly in the family about the need to progress, stay economically competitive, and explore where a business changing idea might come from.
Innovation can also come from the next generation, who steps into a leadership position and contributes new ideas through University knowledge, exposure to new technology or from fresh, less biased curiosity. However, this can also be difficult, as the younger generation is often strongly influenced or might even be intimidated by the leading figure or patriarch of the family business. In my view, ensuring that the family business leaders are connected to and have regular dialogue with outside organizations, sitting on various boards, university alumni groups, or diverse business associations is key for generative, nonlinear thinking.
While personality types have a lot to do with risk taking or aversion, innovating or preserving the status quo, it is often the senior leaders who are less willing to experience disruptive change. I suggest that teams and families have regular interventions where they bring in “outside” facilitators to check the climate of openness and receptivity to new ideas and how the business environment and culture is being shaped to allow for this happen. Open dialogues, a suggestions box, brainstorming meetings, the “next big idea quarterly councils”, etc. are all helpful tools. I have also seen a family business invest in a non-related business, which turned out to be a great way for them to gain access to new ways of thinking and leading, to get outside of their comfort zone and successfully tap into diversity of thought.
What can business families do to encourage more “out-of-the-box” thinking? How can that thought process be captured to serve business growth? And do you see that women can play a particular role in more inclusive thinking?
There is no doubt that women add great value to nonlinear thinking. The 21st century leader must be attuned to creating collaborative partnerships, to exploring new ways of reaching customers, and to solving problems in ways that haven’t been tried in the past. While men and women often share similar leadership skills and strengths, we see that women focus on preserving relationships, are not afraid to ask the seemingly “obvious” questions and are keen to build strong methodologies to boost collaboration across gender, cultures, generations. The smart new organization is focused on reducing blind spots when it comes to cultural norms, recruiting new talent, identifying new customers, testing new product ideas and entering new markets. Blind spots are uncovered when there is a highly diverse set of eyes reviewing them. I remember a pharmaceutical executive, who once said to me, “How can I even think of not having 50% of my team be women when our customers represent much more than 50% women.”
Marijo has 24 years of experience in talent management with fast growth global and entrepreneurial organizations, Marijo also created a global network where she serves as President (http://www.pwnglobal.net/). She facilitates discovery dialogues with executive teams and presents on resilience, positive leadership practices, the science of happiness, strategic radar screen, blind spots and decision-making biases. http://www.bosadvisors.com/