Publications

Family businesses are defined by three overlapping domains of influence: the family, the owners, and the business. Families spend a great deal of time and money trying to sort out questions of family governance and ownership structures. But often, managing the business gets short shrift.

Family-controlled companies surpass their peers because they focus on resilience, not short-term results. During economic booms, this approach leads them to forgo some opportunities (and hence do slightly worse than their counterparts), but it puts them in a position of strength during downturns, when they shine. The researchers identified seven specific ways in which family-run businesses build their resilience:

An emerging set of best practices can turn the age-old problem of generational succession into an opportunity to thrive.

In the 1980s, companies discovered time as a new source of competitive advantage. In the 1990s, they will learn that time is just one piece of a more far-reaching transformation in the logic of competition.

In 1983, the CEO of a paper company faced a difficult decision. His board of directors had just met to consider alternatives to filing Chapter 11 for a subsidiary, a paper mill acquired two years earlier that was losing more than $1 million a month. The acquisition had been made to grow the company, but it now confronted management with the prospect of a major write-down. The price of the company’s shares had already fallen 40%.