At Gallagher, now a multinational company that began with one man in 1927 whose family has remained in leadership positions, we understand the importance of these shared influences.
Does your family enterprise have the culture for continued success?
Read more about what this looks like and why it works over generations.
What makes a family business successful?
Some of Australia’s most successful businesses are family enterprises. The transport and wine industries are dominated by families – others have climbed to the top of the ladder in media, resources and, in the case of the Irwins, wildlife tourism . The family business is a successful model.
The vast majority of these brands are multi-generational, and this is a factor in their strength. Over time these businesses gain deep knowledge of their customers, not just their histories but their evolving needs and strategic directions, and this translates into superior service because if a business can actively contribute to its clients’ wellbeing it earns their loyalty and gains reputation.
In contrast, the average lifespan of a Standard and Poor’s 500 company is now less than 20 years, and that means that long-term continuity in how a business interacts with the wider community and individual customers is limited.
Gallagher Client Manager, Corporate, Roz Shaw comes from a background of running her family’s transport business for over 30 years and knows first-hand why the family business model works. She is also a former chairperson of Family Business Queensland and a member of the Family Business Australia board.
“Family businesses outperform non-family businesses in several ways,” Shaw says. “They invest for the long term and are prepared to sacrifice short-term profits for a long-term gain which is more sustainable.
“They also have an edge over non-family businesses because they are trusted more by customers. They have skin in the game: their name is on the line so they make socially conscious decisions.”
What are the family factors for success?
Family Business Australia research has found there are identifiable characteristics shared by successful family businesses.
These include
- a mature CEO (sometimes older is just better!)
- diversity in leadership governance team
- governance mechanism that facilitate agreement and communication
- competitive focus on what is happening outside the business
- having an entrepreneurial culture
- access to financial resources to fund strategy implementation.
Succession planning is an important aspect of how family businesses transition into the future and those that seek new opportunities are more successful than others which focus on maintaining their market position.
The key to positive family business partnerships
Shared values rate high in family-run businesses and when one family company does business with another, their values match up. Integrity matters, how they treat their own and other people is important, they’re invested in their place in wider society as a business and a clan, they want to contribute to making things better for everyone, they are willing to be accountable for outcomes and they’re committed to the future.
So when it comes to your business needs, bear in mind that a supplier or service provider that has the family DNA embedded in its operations is probably far more likely to be the best match. That way you’re setting yourself up for a partnership that enables your family business to face the future with confidence.
Gallagher is a proud sponsor of Family Business Association.
To the extent that any material in this document may be considered advice, it does not take into account your objectives, needs or financial situation. You should consider whether the advice is appropriate for you and review any relevant Product Disclosure Statement and policy wording before taking out an insurance policy.
