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Ownership and Management

Enduring lessons

January 1, 2002

Family businesses gain the most useful and effective insights into business practices by learning from the experiences of other family businesses

My task in this article is to share some of the key lessons I have learned from my experience as educator, researcher and consultant working with family businesses around the world. I will distil the implications of these lessons for other business families and family businesses. What follows is subjective and by no means exhaustive but may serve to motivate those who lead families and their businesses.

Maximum complexity

The ‘untouchables’ – liabilities or assets for the family business

January 1, 2002

Family businesses are especially vulnerable to emotional biases that create ‘untouchables’ – people with lifetime tenure in the firm regardless of performance. No family business can eliminate emotions, but a few tips from university tenure systems can help ensure the ‘untouchables’ will be contributing to the firm’s success

Recently, my 19-year-old daughter came home from university for a visit. Over the weekend we talked about a central concern in her life – 'I need more money'– and a central concern in mine – 'how are you doing in school?' Though she got the predictable answer from me – 'No'– I got a little more than the usual – 'I'm doing OK' – from her.

Travellers in time

January 1, 2002

Barbara Murray discusses how the much-respected 3-circles model can benefit families collaborating on a brighter future in business together

What happens in a family business when a son or daughter joins the firm? How does this common event affect the lives of those who are already working there and what signal does it send to other family members who may aspire to a career in the family's business? What happens when the family business leader transfers the ownership of the business to the next generation? How does this affect the balance of power at the top, and do the new owners view their ownership as an investment to be realised or as a legacy to be preserved?

The perils of looking to the past to solve the future

January 1, 2002

Finding the right model of governance at a time of complex change requires essential re-thinking. Focusing on the potential future scenarios and being educated in the key issues are good starting points for an effective transition

Successful adaptationto the challenges of generational transitions requires a fundamental re-thinking of the governance model that may have functioned effectively in the previous generation – particularly in family companies evolving to sibling or cousin partnerships. In these cases, the structure of ownership and control that worked in the past can become more complex as a result of the transition. When a family enterprise evolves in this direction, the transition calls for a significant redistribution of power and authority among an increasingly large and diverse network of stakeholders.

How strategy is different for family businesses

January 1, 2002

Considerations for building a strategy for a family business are different to those of a non-family business. Melding the demands of the market with the values of emotionally connected owners creates superior business performance

"It's important to keep family and business separate. You don't want family circumstances to affect the business. Run the business like a business!"

This advice is frequently given to family business owners. It is quickly accepted by business leaders in the hope that the owning family will leave them alone to manage the business.

Family business in Australia

January 1, 2002

Family businesses in Australia account for 40% of Australia’s private sector output, but they are heading for a period of unprecedented change

A vast number offamily companies in Australia will have new owners or managers within a decade, This article is based on a recent study, The Australia Family and Private Business Survey 1997, conducted by myself and Claudio Romano, a fellow Director at the AXA Family Business Research Unit. Our research, which included a sample size of 1500 family firms, found that the family business sector has concerns for the future, is not planning effectively and is heading for a period of unprecedented change – namely changes in the ownership and control of family held corporations.