Family business dynamics: Turn family business dynamics into an advantage

Family business dynamics can be complicated, but when leveraged astutely, those very dynamics can also give the edge to outperform publicly held corporations.

How? Families weave together their own particular family and business values - and commit to extending these to future generations. This, along with independent ownership and long-term vision, enables family businesses to position themselves in a unique way. Executive education designed especially for family businesses can help families tap into the positive side of family business dynamics.

Family business dynamics through the generations
Family business dynamics is often described in three stages, often -unfortunately - with a somewhat negative spin. The first generation is seen as entrepreneurial; the second is seen as needing to evolve the company and manage ownership in a more complex and emotional environment; and the third generation is seen as facing very complex issues with sometimes conflicting perspectives.

In fact, there is no reason that evolving family business dynamics must be a negative thing. Family business executive leadership programs offered by business schools can help families align business, ownership and family dimensions. IMD is a good example. A top-ranked business school, IMD has some 25 years of experience working with family firms to bring them the right business leadership programs. These programs help family members to:

  • Identify the stage the business is at
  • Understand the impact of family values in their family business dynamics
  • Identify the current and desired equilibrium of business, ownership and family
  • Probe critical issues facing family businesses: growth, governance, succession and culture
  • Pinpoint those issues that are totally unique to the family
  • Mitigate potential weaknesses that arise from competing internal interests and perspectives
  • Benchmark best practices for broader understanding of how to leverage family business dynamics successfully
  • Develop solutions based on the family’s unique business culture
  • Create a plan for sustained success with a rational approach separating out business, ownership and family

Unique market positioning
Family business dynamics can help create distinctive business models - in some ways, they may even “break the rules” of conventional business wisdom and succeed. The family business may be able to exploit a special market niche, for example, or be more nimble than other businesses in an ever-changing market. Some of the features that enable successful family businesses to do this include:

  • Independent ownership
  • Having a particular skill or passion for a particular product
  • Family loyalty and shared vision - glue that enables an unconventional business model to stick and grow
  • The desire to be responsible owners and proactively anticipate future family and business needs

When a family can embrace its own business model, it can set goals more clearly to make the model work even better for them. Business management programs from good business schools support the process through a variety of means, including learning modules, leadership coaching, leadership exercises and more. With expert guidance, family members, key stakeholders and management develop a strategy and implementation plan to maximize the advantages of their own family business dynamics.

 

Strengthen your family business

Looking for high-impact family business training?
Discover how IMD’s Leading the Family Business program can strengthen your family business - download the free brochure now!

 

Master your family business dynamics at IMD, and much more: