1. Exploiting knowledge
Because digital innovation is rapid and ongoing, digital business model transformation involves a relentless and fluid process of prototyping and roll out. This is a far cry from traditional business model transformation, and poses significant challenges for organizations, from decision making to implementation.
At the heart of any successful family business is the desire to pass on economic and social values and resources to future generations. This long-term, collaborative and trust-based approach enables a smoother transfer of knowledge and expertise than might be seen in non-family-owned companies.
2. Managing risk
Digital technologies carry novel and often unpredictable risks, from data privacy concerns and cyber-attacks to the challenges associated with relying on external partners. As such, risk management is crucial to drive digital business model transformation.
The longer-term view that underpins the archetypal family business means that careful risk management is core to success. Over time, this multi-generational “longevity” approach creates highly effective and collaborative learning and risk management processes. In turn, family business develop an advantage in the way they assess and scrutinize risks.
3. Marketing power
Successful digital business model innovation involves the ability to adapt in a nimble, informed and sensitive way to changing customer needs and market conditions. This calls for advanced marketing power.
In family business, customer and business relationships are developed with longevity, trust and stability in mind. Heavily-involved family owners are instrumental in the careful management of these relationships, including online communities. At the same time, decision-making and choices regarding new collaborations face fewer hurdles and relationships are easier to maintain.
This tuned-in, conscious approach means family businesses are better equipped to respond to the needs of the market and more focused on customer needs. This means the marketing power of family-owned enterprises is aligned to the needs of digital business model innovation.