Research
FAMILYTies After millennia spent behind the scenes, women are rising to the top of family firms in ever increasing numbers. Recent Bond research sheds new light on their experiences.
THE FAMILy business model is the oldest and biggest
a study of successful chief executive officers (CEOs) in family run firms in 2002. They identified four distinct phases in business model in the world. Since the dawn of trade, family businesses have dominated commerce. In fact until very recently, the preparation for and administration of family-business leadership: learning the business, learning our business, learning family businesses were the only kinds of businesses. The term to lead our business, and learning to let go. ‘family business’ is a modern distinction. However, the significant skew in family businesses toward When the family-owned company Kongo Gumi closed its male leaders meant the study was heavily weighted toward men. doors in 2006, it ended more than 14 centuries of continuous In fact, there was only one woman in the data set. This raised operation. The Japanese company had been in the business of the question in Barrett and Moores’ minds as to whether or not building Buddhist temples since the year 578, making it the women were afforded the same sequential preparation process oldest family-operated business in the world. as men along the road to Kongo Gumi’s final president, the top. Masakazu Kongo, was the last The resulting study was in a line of 40 family-members published late in 2009 as who led the company during its a book, Women in Family 1428-year life. Business Leadership Roles: Two generations earlier, Daughters on the Stage. By Kongo Gumi’s 38th leader was analysing 13 international cases the company’s one and only of women in family business, female president, Masakuzo’s Professors Barrett and Moores grandmother Yoshie. Yoshie began to uncover patterns in the Professor Ken Moores Kongo’s leadership was a oneway women attained leadership off departure from in their family businesses, and the traditional to learn why, in some circumstances, they failed to do so. practice of passing the reins to a male heir, and Not the least of the study’s insights was the discovery that it was born of extraordinary circumstances while the path to leadership for women was neither as strategic when her predecessor committed suicide. nor as sequential as the process identified for men, most women Yoshie Kongo’s preparation for nevertheless did manage to find their way through each of the leadership in the family firm was four phases identified in the earlier study. informal, incomplete and unexpected. And most importantly, they were equally equipped for success Nevertheless, she developed the when they reached the top. business as capably as any of its male leaders, overseeing the reconstruction of Shitennoji’s five-story pagoda after it was hit Family-owned businesses outperform their publicly-owned by a typhoon in 1934. Masakazu counterparts with higher returns on investment, better profit Kongo reportedly said of his margins, more stable earnings and better cash-flow and earnings per employee. Probably the most telling characteristic that defines a family business, and separates it out from other businesses in which family members work or even lead, is the intention to continue the business across generations. “If you or I start a business and engage members of our families, it is in one sense a family business,” Professor Moores says. “But does it really have all of the characteristics that we grandmother, “If anyone is typically associate with a family business? Has it formulated a superhero in our family, it’s her.” the intention to carry across into the next generation? I would suggest not. “So intentionality becomes a critical distinguishing feature to separate a family business from any other business.” Many family businesses are a far cry from the tiny ‘Mom According to a new publication by and Pop’ storefront operations we may often envisage. “They family-business experts Professor Ken transcend all of the size categories, from the largest firms to Moores (Director of Bond University’s indeed the smallest firms,” Professor Moores says. “More of Australian Centre for Family Business) them are small, simply because more businesses are small. But and Professor Mary Barrett (Professor of a significant percentage of family firms is owned and operated at Management at the University of Wollongong’s the top end. School of Management and Marketing), “News Corporation, the Packers, Linfox and VisiCorp: they Yoshie’s path to leadership was representative are all significant family firms, both public and private, in of the differences between men and women Australia. And of course when you take it to the world stage, when taking the helm of the family business. you’re talking about Walmart, Ford, BMW, Samsung … all of Professors Barrett and Moores conducted those are family-controlled companies.”
Families within businesses can create good, bad and even ugly business practices
Defining the family business
Autumn 2010
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Identifying the path to leadership